Lehman's Fuld Testifies

You are very naive. There's a lot of fraud. You need a motive to go dig it out.

All of America wants Wall St. to hang. It is politically advantageous. Therefore, they'll look extra hard.

 

Lying to the investing public is fraud. Do you suppose Fuld lied to his investors to the extent of fraud?

Actually, has he said anything that was a lie which propped up the share price?

 

I would enjoy seeing Fuld BBQ'd.

I admit it.

Does that make me naive, jealous, wrong, misplaced in my anger (a combination of or all of the above)?

 

They keep very detailed records. Up to now, nobody has requested any of them. We showed you the SEC was sitting on mob related money laudering stuff, until someone got discovery. They would have let them sit six years, and then , bye bye.

The difference is motivation.

 

Some of his testimony (think we're serious about this?). Before you go bullshit bashing me, remember, this is under oath to Congress. The downside to lying is about to be felt by the Dir of Enf and some other SEC staffers.

The second issue I want to discuss is naked short selling, which I believe

contributed to both the collapse of Bear Stearns and Lehman Brothers. Short selling by

itself can be employed as a legitimate hedge against risk. Naked short selling, on the

other hand, is an invitation to market manipulation. Naked short selling is the practice of

selling shares short without first borrowing or arranging to borrow those shares in time to

make delivery to the buyer within the settlement period – in essence, selling something

you do not own and might not ultimately deliver to the buyer.



Naked short selling, followed by false rumors, dealt a critical, if not fatal

blow to Bear Stearns. Many knowledgeable participants in our financial markets are

convinced that naked short sellers spread rumors and false information regarding the

liquidity of Bear Stearns, and simultaneously pulled business or encouraged others to pull

business from Bear Stearns, creating an atmosphere of fear which then led to a self-fulfilling

prophecy of a run on the bank. The naked shorts and rumor mongers succeeded

in bringing down Bear Stearns. And I believe that unsubstantiated rumors in the

marketplace caused significant harm to Lehman Brothers. In our case, false rumors were

so rampant for so long that major institutions issued public statements denying the

rumors.



Following the Bear Stearns run on the bank, we and many others called on

regulators to immediately clamp down on naked short selling. The SEC issued a

temporary order that went into effect on July 21 prohibiting “naked” short selling of

certain financial firms, including Lehman, Merrill Lynch, Fannie Mae and Freddie Mac.

This measure stabilized the share prices of Lehman Brothers and the other firms.

However, this restriction was temporary, and on August 13 it expired after 17 trading

days. History has already shown how wrong and ill-advised it is to allow naked short

selling.



Many of the firms that have recently collapsed or have been forced into

emergency mergers, takeovers, or government bailouts – Bear Stearns, Lehman Brothers,

Merrill Lynch, Fannie Mae, Freddie Mac, AIG – did so during the gaps of time in which

there was no meaningful regulation of naked short selling. On September 15, when the

market opened after the collapse of Lehman, naked shorts appeared to turn their attention

to Morgan Stanley and Goldman Sachs. In the three days between the announcement of

Lehman Brothers’ bankruptcy and the SEC instituting an emergency ban on short selling,

Goldman Sachs’ and Morgan Stanley’s share prices fell 30% and 39% respectively.

None of this was a coincidence.



After seeing this stock price reaction in the week following Lehman

Brothers’ bankruptcy, the SEC, like the Federal Reserve, took immediate action to

stabilize the system. On September 18, following the decision of the Financial Services

Authority in the United Kingdom a day earlier, the SEC instituted an emergency ban and

other restrictions on short selling financial institutions. In taking these steps, Chairman

Cox explained: “Given the importance of confidence in our financial markets as a whole,

we have become concerned about the sudden and unexplained declines in the prices of

securities. Such price declines can give rise to questions about the underlying financial

condition of an issuer, which in turn can create a crisis of confidence without a

fundamental underlying basis. The crisis of confidence can impair the liquidity and

ultimate viability of an issuer, with potentially broad market consequences.” These new

restrictions are set to expire no later than October 17. Permanent regulation of naked

short selling is needed to prevent a similar demise for the firms that survived with the

government’s help.

 

"Al Gore’s carbon trading business GIM was banked with Lehman Bros. It will be interesting to see how this will play in the future but I suspect that this increases the risk of participating in Carbon trading. Merrill Lynch was also deeply involved in this business.

Last year Lehman Brothers released a long and highly publicized report about climate change in which they preached about decarbonization, trying to make their investors keep getting high profits from the Kyoto carbon trade scheme and the support of huge public subventions. All that, of course, with the applause of the usual choir of politicians, the entire media and the Greens.


A year ago they couldn’t predict their bankruptcy but were predicting the climate 100 years ahead. Thousands of green militants have been using the Lehman report as a proof of global warming and impending chaos. Lehman Bros said it! sacred words! Its scientific advisor is James Hansen! The report is the basis for policies on climate change in Spain, Argentina and several other countries playing the progress game; it is used by economy professors playing the climatologists; by newspapers editorials, and even by a State Secretary: Lehman Bros, said it!

Lehman Brothers spoke in his report about the climate in 2100 and its economic and financial projections, about climate change costs several decades away. They dared to recommend their investors what they considered a central value of the carbon ton in 50 years from now. Their sources and support references were taken from the IPCC AR4, AR3, and so on. Really impressive.

But even with their high ability to peek into the future, they couldn’t predict their demise one year ahead though there were many people that had been warning about this present crash for years. But Lehman Bros were recommending investments 30, 50, 100 years ahead. Some days, reality imitates fiction. Who was Lehman Bros’ ‘scientific’ adviser on climate? You guessed it, James Hansen, the same guy that wants to drive the world to bankruptcy as he did with Lehman’s Bros.

But the story has some connections with Hansen being the ‘scientific’ adviser to Al Gore, who’s the Chairman of the Board of the Alliance for Climate Protection. As seen in Alliance’s website, the managing Director is none less than: Theodore Roosevelt IV. Managing Director, Lehman Brothers, Chair of the Pew Center for Global Climate Change.

Theodore Roosevelt IV is Managing Director at Lehman Brothers and a member of the Firm’s senior client coverage group, which oversees the Firms client and customer relationships. Mr. Roosevelt is an active conservationist. He is Chair of the Pew Center for Global Climate Change, Vice Chair of the Wilderness Society, and a Trustee for the American Museum of Natural History, The World Resources Institute, the Institute for Environment and Natural Resources at the University of Wyoming, and a Trustee of Trout Unlimited.

The Lehman reports in two parts can be found on this site ‘Intellectual Capital’. In “The Business of Climate Change ll”, the following acknowledgement is made: “On the scientific side, we are grateful to Dr. James Hansen, Director of the NASA Goddard Institute for Space Studies, who, at the end of a particularly informative dinner hosted by Ben Cotton of the Man Group, gave generously of his time to clear up a number of scientific questions that had been niggling us. Dr. Peter Collins and Richard Heap of the Royal Society provided valuable input and brought us up to date on the more controversial areas of scientific developments in the domain of global climate change.” H/T Eduardo Ferreyra originally posted to Climate Sceptics Internet discussion group.

Lehman’s failure provides a preview of our future if more companies bank their future on the speculative advice of these advocacy scientists, politicians and environmental groups, while ignoring short term realities."

 

Maybe global warmimg isn't all that great for the economy. Let Lehman go down and global warming crisis is over. Problem solved.