Mod Note (Andy): #TBT Throwback Thursday - this was originally posted on 11/25/13. Check out @DickFuld"'s current Q&A here. To see all of our top content from the past, click here.
I was like many of you at one point in my life. I was a non-target student with big dreams. Luckily, I was an extraordinary networker and worked my way into Lehman on the commercial paper desk. It was the best thing that ever happened to me. I breathed the CP market and built a reputation from an early age as someone you should not fuck with.
Fixed income was becoming the lifeblood of our firm and I was at the epicenter of it. Lew Glucksman was a God at our firm. He had his office at the center of our trading floor and used to smoke cigars in his little glass encased office. Usually only coming out to yell at someone for botching a trade. (side note: he once became so angry that he kicked a trash can during the middle of the day and shattered the glass wall of his office) Lew was determined to show these fancy investment bankers how real money was made and he did. He eventually became the CEO, which was virtually unheard of at the time. Traders didn't become CEOs, but times were changing rapidly. I wanted to be him. I bled Lehman green through and through.
I stuck through the firm through the roughest of times. The first wave of shit was when we were bought by American Express. These people really didn't know what to do with us. They sold charge cards and we made mountains of money trading bonds. It was a horrible fit and we all wanted out. We eventually got our wish and spun out in 1994 with me as the CEO. 1998 was another tough time for us...the god damned short sellers were out to get us with the LTCM debacle. We were liquid with solid financials, but they were looking to take us down, but we weathered the storm and it made us stronger. The 2001 terrorist attacks nearly ruined us again, but we pulled together as a team and our clients rewarded us again.
My goal was for Lehman to be the top investment bank in the world and in many respects, that's what we became. But, first, we had to grow and invest in the other parts of our business to give us a more balanced approach to printing money. I invested heavily in the equities business and we sat atop the Institutional Investor equity research rankings for years. I invested heavily in our banking business and we did well there too. I built up an Asset Management franchise that was capped off by our purchase of Neuberger Berman in 2003. We were a globally diversified company that could provide expertise to virtually any financial problem. Our stock outperformed all of the other investment banks and almost every financial company out there. I was named CEO of the year multiple times because of our success in providing liquidity and solutions to our clients.
As you surely know by now, not everything turned out perfectly for us. We were in a similar position to the other banks in 2007, but the world started coming apart. Politics would eventually be the end of Lehman. Hank Paulson was determined to get us, he was so envious of what we accomplished and didn't want to see us dethrone his beloved Goldman Sachs, which we were all but certain to do. We also had the brother and the cousin of the POTUS on our payroll, which didn't help. So, they made us fail.
Ultimately, do I feel responsibility for what happened? Yes, I do. I will remember what happened for as long as I'm still breathing and I'm sorry that I let down my employees (who I consider family), our clients, and our shareholders. That being said, I'll never forgive those bastards (Paulson, Geithner, Bush) for what they did to the company we all loved. Anyway, there have been a lot of negative things said about me, so I just wanted to get the truth out there.
-- Dick
(PS -- nobody ever hit me in the company locker room, that was a lie designed to sell newspapers)
Great post. I just googled you! I can not believe you went on here to share your story. BTW, it is very helpful and informative. Thz for posting. You inspired us all
10/10 Would read again
This is a really fascinating post. What was it that killed Lehman specifically? I had heard a rumor that when Lehman needed cash to pay for its debt and a couple of rival banks (I think specifically Morgan Stanley and Goldman Sachs, I've heard) were holding securities and cash that Lehman owned, but would not allow it to access them, thus forcing the firm into bankruptcy (despite solvency). Can you shed some light on this? Is it based in truth, or complete and utter bunk?
How, if you don't mind me asking, did you hedge your mortgage book? It's amazing how just a rumor of a liquidity issue can become a self fulfilling prophecy. If the government had bailed Lehman out (like BAML, Citi, JPM, etc.) do you think that the company would have survived today? Also, can you talk a little more about how the politicians managed to keep Lehman out of the proposed TARP fund?
@UFOInsider
You have no idea what you're talking about. You've never been to war like me. It's a jungle out there and people couldn't face me head on, so they played dirty. We were a group of underdogs who fought our way to the top and the ingrained players were scared shitless that we were going to eat their lunch. So, they shut us down through rumors and the government did absolutely nothing to stop it. They should be ashamed of themselves. No bank can survive the death-spiral that results from a crisis of confidence, not even the great Lehman Brothers. Freedom of speech does not mean you can yell 'fire' in a crowded room and that's exactly what happened to us.
Why is everyone acting like a regular WSO poster is actually Dick Fuld?
John Paulson? LOL. GWB's cousin didn't call Bush directly on his personal line? You're saying that Hank Paulson had more influence with George than his own cousin? I call bullshit.
@ Dick - I never heard you just acknowledge that your firm took too much risk and left their position vulnerable. I never heard you acknowledge on any level that some of that may have been your fault. You can't say you feel responsible without actually taking responsibility. All you've done is try to save face...and that's your problem. Despite what the twits in Washington think, risk taing is actually acceptable in this business, so I wouldn't fault you. None of us would.
Here's what's bothering me: you've done everything you can to make everything everyone else's fault after your company was weakened. THAT's why I'm annoyed with you. If you could man up and just say "hey, I screwed up, I thought our risk profile was ok" or "Hey, I knew we were taking too much risk but I figured we could exit the market in time" or even "yeah, I got totally blindsided", then I could respect you. Instead, all you do is talk about how everyone reacted after things started going bad. You hide behind politics, and you're not even that good at it.
This is about redemption and of course it's uncomfortable, but until you confront this no one will believe you. It's not about a crisis of confidence in the company at this point, it's about a lack of confidence in YOU. You're not a bogeyman to me, I understand full well that things were fucked in 2007. Actually, I think you're a victim on several levels, legitimately. One, you were a victim to making mistakes as a CEO. Two, a victim to everyone else in finance who pounced on LEH. And Three, a victim of Washington. You've discussed the second and third point but you can not come to terms with point one and that is the root of the rage against you. So be it. And so be it if you're "done with me". It really makes no difference at this point.
Until you deal with that first point though: Wall Street is done with you.
Go ahead and live in your little bubble and denounce people who actually played the game. We were in a similar risk position to every other investment bank out there at the time. You need to feed at the trough when the getting is good otherwise you're out the door. We did what we had to do to stay competitive and increase our market share. You would have done the same thing, but you wouldn't have executed as well as I did. All the people that want to demonize me are the same ones that called me CEO of the year just a couple of years earlier. It's just people who have no idea what they're talking about trying to sell papers. And it works. But, it doesn't mean they're right. Even after all the shit I went through, I'm still a wealthy man, I couldn't care less if Wall Street is done with me or not. I wouldn't work there in this overworked and underpaid environment anyway. I mean, there are no bulge bracket investment banks even left, they're all commercial banks. Bobby Lehman would have rather seen us perish than become a commercial bank.
Troll post from fake Dick Fuld successful.
Putting this on the FP was an important component to the troll.
I have no idea how this got to the FP.
Coming up next, a two parts series exclusively for WSO readers:
Part 1) Success Story: How I leveraged my Vietnam military experience to gain admission to a top MBA finance program
And part 2) Ask Me Anything: Post-MBA star bond trader at BB taking questions on S&T, exit opportunities and beyond
By Jon Stevens Corzine
"troll" There is nothing trollish about this. "trolling: submit a deliberately provocative posting to an online message board with the aim of inciting an angry response." Unless you are a fuking moron, no one in their right mind will believe that Dick Fuld has decided to come on an anonymous message board to talk about his life.
I despair at the state of our education, and the lack of critical thinking. If this post is any representation of the future candidate pool of analysts I am going to have to pick from, I might as well just give up and do all the shit work myself.
Unthinking real!
Well, well... Glass house, buddy. You seem to have had trouble correctly defining "troll" just today so I wouldn't go throwing stones, chief.
[disclosure: I, in fact, do not believe that "DickFuld" is Richard Fuld, former CEO of Lehman Brothers.]
Cool story, bro.
First, you have to keep in mind that I was networking for a job in the late 1960's, so not everyone was as obsessed with Ivy League degrees the way they are now. My advice may need to be modified somewhat for current times. But, the important thing is you need to build a personal connection before asking for a job. Don't say things like 'Can I network with you?' or 'I AM interested in a job at your company' to people you've never met before. Try to learn anything you may have in common with your targeted person, whether it's growing up in the same town, attending the same school, you both play squash, whatever. Your goal should be to meet as many people as you can and to try to figure out some way you can be helpful to them. I know many of you will say 'but, I'm just a college student, I have nothing to offer'. Well, pardon my French, but that's just feel sorry for yourself bullshit. Maybe you can recommend a goo restaurant, maybe you know a good dentist in the town they just moved to, it doesn't have to be a big thing. If you try to connect people and help them, it will pay off in spades.
If you have any family or friend connections, do not be afraid to use them. You need to come across as someone that people like and someone who gets things done. If people perceive you this way, they will want to hire you. If you lack confidence or you don't follow-up, you will be leaving potential offers on the table. Go get your piece of the pie, because nobody is going to serve it to you.
Post of the year. I have a deliverable due in 2 hours and I stopped all work to read this in its entirity. thank you