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How Lehman Brothers Got Its Real Estate Fix
May 3, 2009 6:15 AM   Subscribe

How Lehman Brothers Got Its Real Estate Fix. A great article in the NYTimes describes some of the details of commercial real estate lending in its heyday, with a focus on one of Lehman's biggest dealmakers.
posted by SeizeTheDay (7 comments total) 5 users marked this as a favorite

 
Mr. Walsh, the subject of this article, declined to be interviewed for this article.
Mr. Fuld, his boss, declined to be interviewed for this article.
Mr. Smith, Walsh's lawyer, declined to comment for this article.

Walsh's underlings, the former members of his unit, requested anonymity because they were concerned about being swept up in lawsuits and investigations surrounding Lehman’s collapse.
Two former members of his team also requested anonymity because of confidentiality agreements they had signed with Lehman.

A former Lehman executive who asked not to be identified because of his confidentiality agreements with the firm.
And another former Lehman executive, declined to be identified because he wasn’t authorized to speak publicly about his time at the firm.
A third former executive who declined to be identified because he wasn’t authorized to speak publicly about his time at the firm, that must be some contract.
And more former Lehman executives who requested anonymity because of confidentially agreements, although it hard to keep track if these are separate people.

One of the firm’s bankers who declined to be identified because he wasn’t authorized to speak publicly about his time at Lehman.

A former real estate banker at a competing Wall Street firm, requested anonymity because of confidentially agreements he had signed with the bank.
Mr. Speyer, declined to comment for this article, and Mr. Elieff did not return calls seeking comment, both were "investors."
posted by zenon at 7:26 AM on May 3, 2009 [1 favorite]


That's not really surprising, is it? Companies get real heavy-handed with the lawyers when you talk about them in the press, and the contracts you sign are pretty vicious. The only person who benefits from you talking publicly to the press is the reporter. Anonymous is the way to go.
posted by leotrotsky at 7:49 AM on May 3, 2009


That syringe is pretty cool.
posted by srboisvert at 9:12 AM on May 3, 2009


Surprising - no, not really. I imagine (hope) that many involved are concerned with having their name in the paper, losing their fine things and going to jail. I suppose it serves to demonstrate how serious the issue is, but it still reeks of inside baseball and at some point names should named. It's not like Welsh did it all himself.
posted by zenon at 9:20 AM on May 3, 2009


It all started innocently enough-- meet up after school, smoke a few split-levels. When my buddies offered up a few lines of row houses, I didn't think anything of trying it. I was young, curious.

Before I knew what happened, I was mainlining monuments. I remember freebasing pure Birj Dubai in a burger king parking lot and thinking I saw Gods face. It got so bad that I'd do just about anything for any dirty architect who came along offering a fix, usually some half-cut modernist hackery that had me out turning tricks to chase the dragon an hour later.
posted by ScotchRox at 10:18 AM on May 3, 2009 [2 favorites]


Can anyone understand this enivironment? I can't see where people fancy this guy as an "absolute whiz" in real estate and the art of buying and selling and that he'll actually be back!

It still boils to: real estate went up so crazy high from 1996 till the crash so as to fathom and dwarf all that came before it. His bets were based upon such prices continuing to rise -- all which came from the fact that the entire financial system was overleveraged to the point that no amount of actual wealth could back it up. As long as he was making money, no one could question it.

It's another case point in how it was a couple individuals doing stupid things and making money that shut up the naysayers and were able to topple things like Lehman.

One thing that needs more flushing out -- it's striking that he supposedly lived a normal existence, etc. What was his drive? If all he wanted to do was fish and live in Rye, NY he could have did it without contributing to the real estate bubble.
posted by skepticallypleased at 10:28 AM on May 3, 2009


CRE could be hosed...
posted by kliuless at 12:34 PM on May 3, 2009


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