Wall Streetwalkers: The Sleazy Lehman Brothers Subsidiary - A MUST Read

[keep_it_real]

"Lehman was very early in getting this deal machine into place," he says. "With one hand, they loaned the money to the mortgage lender to allow them to originate loans to home buyers. With the other hand, they ostensibly bought the loans originated with their line of credit, and resold them as securities to investors."

The scheme worked like this: Homeowners signed mortgages with loan companies. Lehman bought those mortgages and bundled them into "tranches," which they then sold to investors—often large pension funds and other financial institutions.

The subprime-mortgage market grew from $40 billion in 1994 to $600 billion in 2005. On the plus side, the securities offered rich and institutional investors a steady rate of return. That was true, of course, only if the mortgages were solid.

Lehman's boss, Fuld . . . became very rich. In testimony last month, he told the House Oversight Committee that he had made $60 million, plus another $240 million in stock that he sold. He owns a $21 million apartment in New York City, a $14 million home in Florida, a summer home in Idaho, and millions in artwork.

http://www.villagevoice.com/content/printVersion/725636

[Double T]

1. Yep, free market capitalism works real well.............

if you're a GD full fledged criminal. Fuld is the kind of guy many americans idolize and wish they could become; no wonder we are in this disaster.

[malaise]

2. He should be in jail

:puke:

[psychmommy]

3. i think our state pension system was heavily invested in lehman's

we know for fact that $50 million was invested and lost as last as may or june of this year. the guy that runs our pension system said"you're bound to take some loss. that $50 mil was a not very large percentage of our pension investments". what has really frightened me is that gov corzine has been all over the talking head shows discussing our economic downturn. in new contract negotiations-the new hires are paying more and will be penalized for retiring before 67 or 70 (i can't remember). we were able to take out pension loans at a low interest rate. now we if we take a pension loan it is apr and it has to be paid within 5 years. i do believe we are in trouble. i hope when i retire in 10-15 years things will be ok.

[Kansas Wyatt]

4. The only justice would be for Lehman's CEO to be stripped everything...

And tossed out on the street without a dime to his name.

[bluesmail]

5. The Village Voice article got me thinking about

the other truly gigantic scams we deal with daily, like BigOil. BigPharma. BigHealthCare. Now here's a new one. Big, fat, ruthless and no conscience, Sub-Prime. (They're probably all related). Great Article. This I am bookmarking.

[Octafish]

6. Operation GOLDMINE

From the article:

“Lehman was involved at all ends of this dirty business, so deeply involved that it set up shop at every single money-making stage,” Ackelsberg says. “Basically, it was just a gold rush: a huge wealth transfer from middle-class families to Wall Street.”


And that has been the whole point of Reaganomics and whatever Voodoo Poppy's Wall Street crew from Capitalism's Invisible Army could conjure.

Perhaps we won't have to build more federal penitentiaries to handle the incoming populace. We could send them to Abu Ghraib.

[BrklynLiberal]

7. There should be a govt lein on all his property. It should be sold and

the profits dispersed among all those who lost money due to his incompetence.

And what about this story that Rachel Maddow told on her show the other night...The guy in charge of Risk Management at Lehman Bros is being tapped to work at the FED!!! This is the guy who got Lehman involved in the high risk mortgages that led to their demise!!

What the f**k is going on here???!!!