Comments on: IN MY OPINION - September 5th, 2009 http://www.lawrencegmcdonald.com/2009/09/in-my-opinion-september-5th-2009/ This is the official website for the best selling author of "A Colossal Failure of Common Sense." Fri, 30 Jul 2010 08:46:58 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: Lyle http://www.lawrencegmcdonald.com/2009/09/in-my-opinion-september-5th-2009/comment-page-1/#comment-1153 Lyle Sat, 12 Dec 2009 22:01:17 +0000 http://www.lawrencegmcdonald.com/?p=848#comment-1153 I am curious about the data sets used to predict the no house price decline over 5% nationwide, did that mean that there would be at least one market where the price would not decline, or that the median price nationwide would not decline more than 5%? Second did the data sets include the Great Depression, or was that thought to be such a unique event that it could be explained out of the data set (i.e. it needed a fudge factor to correct)? Also it was noted that house prices move in cycles in different parts of the country, and that these prices had different periods. Did no one think that the cycles could line up and all hit at the sametime, had no one been to the beach? (Watch the waves every so often a big one comes in as waves add up). I am curious about the data sets used to predict the no house price decline over 5% nationwide, did that mean that there would be at least one market where the price would not decline, or that the median price nationwide would not decline more than 5%? Second did the data sets include the Great Depression, or was that thought to be such a unique event that it could be explained out of the data set (i.e. it needed a fudge factor to correct)?
Also it was noted that house prices move in cycles in different parts of the country, and that these prices had different periods. Did no one think that the cycles could line up and all hit at the sametime, had no one been to the beach? (Watch the waves every so often a big one comes in as waves add up).

]]> By: Katherine http://www.lawrencegmcdonald.com/2009/09/in-my-opinion-september-5th-2009/comment-page-1/#comment-1106 Katherine Tue, 24 Nov 2009 22:56:54 +0000 http://www.lawrencegmcdonald.com/?p=848#comment-1106 Stephen, Well said- ultimate power often ultimately corrupts. Katherine Stephen,

Well said- ultimate power often ultimately corrupts. Katherine

]]> By: Helene http://www.lawrencegmcdonald.com/2009/09/in-my-opinion-september-5th-2009/comment-page-1/#comment-889 Helene Mon, 21 Sep 2009 17:33:50 +0000 http://www.lawrencegmcdonald.com/?p=848#comment-889 Mr. MacDonald, Great book -- interesting, engaging, clear, and personal -- exciting for those of us not on the Street. But sounds like your theme is how all these brilliant, hardworking, dedicated people at Lehman were let down by Fuld and Paulson. I think not. Smart and educated, but driven by the culture of money and profit. Short-term results, end-of-year bonuses. Most of the country thinks Wall Streeters are much like your California body builders (hysterical descriptions, right-on), perhaps a bit less crass, but arrogant, self-involved, and looking for their next toy. I have no gripe against profits or individuals getting rich -- even very rich. But is there NO responsibility that goes with the dough? What of the national economy? The world economy? How about earning the money instead of winning it, or creating something with inherent value? A new book, maybe about the people across the country without a Cape retreat or Soho condo to sell, who themselves continue to pack their desks in tears, might be called for. Then again, maybe not. Those of us on Main Street knows that story all too well. Mr. MacDonald,

Great book — interesting, engaging, clear, and personal — exciting for those of us not on the Street.

But sounds like your theme is how all these brilliant, hardworking, dedicated people at Lehman were let down by Fuld and Paulson. I think not. Smart and educated, but driven by the culture of money and profit. Short-term results, end-of-year bonuses. Most of the country thinks Wall Streeters are much like your California body builders (hysterical descriptions, right-on), perhaps a bit less crass, but arrogant, self-involved, and looking for their next toy.

I have no gripe against profits or individuals getting rich — even very rich. But is there NO responsibility that goes with the dough? What of the national economy? The world economy? How about earning the money instead of winning it, or creating something with inherent value?

A new book, maybe about the people across the country without a Cape retreat or Soho condo to sell, who themselves continue to pack their desks in tears, might be called for. Then again, maybe not. Those of us on Main Street knows that story all too well.

]]> By: Stephen Hanson http://www.lawrencegmcdonald.com/2009/09/in-my-opinion-september-5th-2009/comment-page-1/#comment-830 Stephen Hanson Fri, 18 Sep 2009 04:05:54 +0000 http://www.lawrencegmcdonald.com/?p=848#comment-830 Hi Larry My compliments to you and Patrick Robinson on the book which is exceptionally well written. I have been in the money management business for thirty years so I fully appreciate the significance of your experiences both before and during Lehman. I have to say that I was impressed by your modesty and high praise for your colleagues. This gave your story enhanced credibility. I worry for you however as to what King Richard might do in response and I hope you and your publishers have taken good legal advice. My question is what you see as the moral of this story? The problem with capitalism is whilst its success depends on the human desire to accumulate wealth, the boundaries where such desire becomes socially unacceptable are ill-defined. Had you been unsuccessful as a trader you would have lost your job. Dick Fuld was eventually unsuccessful as CEO and lost his. The difference is he took 25,000 people down with him. Ideally, listed corporations should be structured so that unbridled and unfettered power cannot be vested in one person. Unfortunately, history shows us that Lehman is unlikely to be the last casualty of such power and its ever-attendant companion - avarice. Good luck with your career from here on. Regards Stephen Hi Larry

My compliments to you and Patrick Robinson on the book which is exceptionally well written. I have been in the money management business for thirty years so I fully appreciate the significance of your experiences both before and during Lehman. I have to say that I was impressed by your modesty and high praise for your colleagues. This gave your story enhanced credibility. I worry for you however as to what King Richard might do in response and I hope you and your publishers have taken good legal advice.

My question is what you see as the moral of this story? The problem with capitalism is whilst its success depends on the human desire to accumulate wealth, the boundaries where such desire becomes socially unacceptable are ill-defined. Had you been unsuccessful as a trader you would have lost your job. Dick Fuld was eventually unsuccessful as CEO and lost his. The difference is he took 25,000 people down with him.

Ideally, listed corporations should be structured so that unbridled and unfettered power cannot be vested in one person. Unfortunately, history shows us that Lehman is unlikely to be the last casualty of such power and its ever-attendant companion - avarice.

Good luck with your career from here on.

Regards
Stephen

]]> By: Stephen Burns http://www.lawrencegmcdonald.com/2009/09/in-my-opinion-september-5th-2009/comment-page-1/#comment-822 Stephen Burns Thu, 17 Sep 2009 19:22:49 +0000 http://www.lawrencegmcdonald.com/?p=848#comment-822 Lawrence - I just finished your book and it was well done. I think it explains a lot of what happened on Wall Street that affected main street America. I just have on word to say as to why - GREED! Absolute greed gives way to any rational thinking at all levels. The greed on Wall Street was in the mortgage companies and in the irrational thinking of consumers who thought they could buy a home 5 times what they earned with no money down and be able to pay for it. I was in the mortgage business from 2001-2003 with a bank in Colorado and we saw what Aurora Loan Services offered. We DID NOT do interest only loans or much ALT A loans but we sure had a lot of offers. If we (in the mortgage business) could see the impending disaster of the mortgage business in 2004 why couldn't all the big players, or were they too blinded to care. By the way I went to the University of Colorado at the time Dick Fuld was there. I didn't hang with his crowd but I must say he will become one of our most dubious and infamous graduates ever and that is a shame. Thank you for bringing this book out for all to understand. Lawrence - I just finished your book and it was well done. I think it explains a lot of what happened on Wall Street that affected main street America. I just have on word to say as to why - GREED! Absolute greed gives way to any rational thinking at all levels. The greed on Wall Street was in the mortgage companies and in the irrational thinking of consumers who thought they could buy a home 5 times what they earned with no money down and be able to pay for it. I was in the mortgage business from 2001-2003 with a bank in Colorado and we saw what Aurora Loan Services offered. We DID NOT do interest only loans or much ALT A loans but we sure had a lot of offers. If we (in the mortgage business) could see the impending disaster of the mortgage business in 2004 why couldn’t all the big players, or were they too blinded to care. By the way I went to the University of Colorado at the time Dick Fuld was there. I didn’t hang with his crowd but I must say he will become one of our most dubious and infamous graduates ever and that is a shame. Thank you for bringing this book out for all to understand.

]]> By: L. Deady http://www.lawrencegmcdonald.com/2009/09/in-my-opinion-september-5th-2009/comment-page-1/#comment-746 L. Deady Sun, 13 Sep 2009 23:59:08 +0000 http://www.lawrencegmcdonald.com/?p=848#comment-746 I just finished reading the book. I was rivited most of the time and could not put the book down. I was confused about some of the early history. Why did you not take the series 7 course when you first wanted to become a trader? Running around sending out so many resumes etc. just did not make sense? Also, why did your parents not realize how dangerous life would be for you and your siblings in the ghetto? Did your Mom just not want to fight for the standard of living that both your Dad and Mom should have provided? I began to think this drama was just filler to keep the reader interested? I do know that divorce can be upsetting to normal thinking processes. Also, I wondered why, with all your experience at short selling you did not sell Lehman stock short after your layoff to cover your retirement shares? Did you sign a contract promising not to sell short as part of an employment agreement? I remember back in 1979 I was working for International Harvester as a line foreman. We had a chairman named Archy McCardel who reminds me of Fuld. He walked away with millions when IH started downsizing and thousands of people lost jobs. Today IH is still in business making trucks but much smaller with work performed overseas. IH did not hire many new employees for decades while honoring UAW union contracts. I just finished reading the book. I was rivited most of the time and could not put the book down.

I was confused about some of the early history. Why did you not take the series 7 course when you first wanted to become a trader?
Running around sending out so many resumes etc. just did not make sense?

Also, why did your parents not realize how dangerous life would be for you and your siblings in the ghetto? Did your Mom just not want to fight for the standard of living that both your Dad and Mom should have provided? I began to think this drama was just filler to keep the reader interested? I do know that divorce can be upsetting to normal thinking processes.

Also, I wondered why, with all your experience at short selling you did not sell Lehman stock short after your layoff to cover your
retirement shares? Did you sign a contract promising not to sell short as part of an employment agreement?

I remember back in 1979 I was working for International Harvester as a line foreman. We had a chairman named Archy McCardel who reminds me of Fuld. He walked away with millions when IH started downsizing and thousands of people lost jobs. Today IH is still in business making trucks but much smaller with work performed overseas. IH did not hire many new employees for decades while honoring UAW union contracts.

]]> By: Greg http://www.lawrencegmcdonald.com/2009/09/in-my-opinion-september-5th-2009/comment-page-1/#comment-728 Greg Sun, 13 Sep 2009 00:25:33 +0000 http://www.lawrencegmcdonald.com/?p=848#comment-728 Hi - I'm reading your book, enjoying it immensly however some questions / points : - on the day Delta when bankrupt why weren't you as a desk massively short, you said you ended the day long, why not flat or still short on the basis it was predicted by Jane? - Why did yr boss get so angry on the Beazer position which was wrong to the tune of only $4m? That's a tiny position. Also - just one pedantic point, when you talk about the difference between eq and bonds you said bond-holders have the power to change mgmt at the Co. Thats not true - only in the event of default to bondholders have any influence on mgmt. Equity investors however OWN the co. and have way more levarage over CEO's/the board. Don't you agree? Thanks Hi - I’m reading your book, enjoying it immensly however some questions / points :

- on the day Delta when bankrupt why weren’t you as a desk massively short, you said you ended the day long, why not flat or still short on the basis it was predicted by Jane?
- Why did yr boss get so angry on the Beazer position which was wrong to the tune of only $4m? That’s a tiny position.

Also - just one pedantic point, when you talk about the difference between eq and bonds you said bond-holders have the power to change mgmt at the Co. Thats not true - only in the event of default to bondholders have any influence on mgmt. Equity investors however OWN the co. and have way more levarage over CEO’s/the board. Don’t you agree?

Thanks

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