Even the Titanic swerved

A former Lehman vice-president, remembers what it was like to be on Wall Street in the last, chaotic

We all knew it was coming. Most of us had known for a week, but that did not lessen the shock of the news that Lehman Brothers was no more. In the small hours of Monday 15 September, Richard S Fuld, our isolated and obdurate chairman, had filed for bankruptcy, ending 158 years of Wall Street for what was, arguably, the finest merchant bank in US history.

The shock reverberated among the 26,000 employees of Lehman, but when I use the word "we", I refer only to the men and women who strove for more than two and a half years to save the bank from the follies of the 31st floor, where King Fuld and his cohorts had resolutely steered Lehman head-on into an iceberg. It was pathetic, really. Even the Titanic swerved.

The most important players were Mike Gelband, managing director and global head of fixed income; Alex Kirk, managing director and global head of high-yield and leveraged loans; and my immediate boss and best friend, Larry McCarthy, managing director and global head of distressed bond trading. Then there was Richard Gatward, managing director and global head of convertible securities trading; Christine Daley, managing director and head of distressed debt research; Madelyn Antoncic, managing director and chief risk officer; and myself.

Most of these brave leaders implored the chairman, and our president Joe Gregory, to change course. In the end every one of us was fired, sidelined, moved away from the action or somehow got rid of. We didn't know it at the time, but we were watching the death throes of Lehman Brothers, as one by one the greatest financiers in the building went.

Throughout the long weekend before the collapse, all of us, now on the outside, were taking blow-by-blow calls as Fuld and his cronies struggled to persuade the government to save them. Monday 15 September started for us at about 5am, and my mobile never stopped ringing. Three times I had to charge the battery. Over and over we rang each other, unable to believe what had happened, that Lehman Brothers was gone. I just remember there was so much to say, and so much that would never be said.

We who had made the bank's fortune mostly sat alone in our apartments, dumbfounded by the news channels, watching our world crash around our ears. Nothing else seemed to matter. No other stories were even being covered. On every channel the bank we loved was being shown, surrounded by journalists and engulfed by a sorrow that none of them understood.

I remember there was a threat of rain in the morning - even the skies seemed to weep for Lehman Brothers - but as if to convince myself that it really had happened, I left my apartment and walked the six blocks to the old office at 745 Seventh Avenue. I pushed my way through the journalists, my mobile pressed to my ear, talking to my old boss Larry McCarthy. And I stood outside and stared up at the fourth floor - the trading floor of the great bank - where we had battled away for almost four years, shoulder to shoulder. I think I smiled to myself. For the good times.

But then I looked up to the 31st floor, where all the damage was done. And I'm not ashamed to say that my eyes welled up at the sheer stupidity of it. I walked away for the last time, the shouts of reporters ringing in my ears. "Did you work at Lehman Brothers?" "What are you feeling now?" "What's the mood like among the staff?" "Who do you blame for this?" "What are you going to do next?" I was appalled by their sense of entitlement, soundbites as the collapse of Lehman Brothers heralded the crash of the world economy. And they wondered what the bloody mood was like.

On the anniversary of that dark day, much of the financial carnage remains - the sub-prime crisis that caused it, the commercial real-estate crash that worsened it, still a billion acres of concrete unsold, unsellable, held together by government cash and promises. Great buildings remain half empty. The dust is clearing, but only slowly.

And yet I cannot avoid the feeling that even if we have not yet reached the sunlit uplands of prosperity, we are at least climbing the hill and no one is out of breath. Lehman Brothers has been largely absorbed by Barclays, though the $660bn debt may take years to unwind. My little team of people who could have saved Lehman has dispersed to smaller, more manageable and certainly more careful financial institutions. I have been given a position in a new and very conservative financial organisation. By nature, I am sometimes a bear, and I have remained sceptical about the latest bull market during which the Dow Jones Industrial Average has surged by 3,000 points. But I am optimistic that the world will recover as quickly as many are hoping.

The Lehman collapse cost me much of my savings - seven figures - but I intend to get it back. My former colleagues and I are still on the line to one another, just like the old days, still swapping information, and warnings, trying to be helpful. Just a group of old comrades who once fought together.

The 15th of September will always be a date in infamy. I try to persuade myself that the bank collapse is behind me. But it never will be, and I expect I'll stroll round to the old building some time during the day and glance up again. Just for the good times' sake.

Lawrence G McDonald is the author, with Patrick Robinson, of "A Colossal Failure of Common Sense: the Incredible Inside Story of the Collapse of Lehman Brothers", published by Ebury Press (£7.99)
www.lawrencegmcdonald.com

This article first appeared in the 14 September 2009 issue of the New Statesman, Where next?

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When heritage becomes hate: why my home town of Charlottesville needs to address its complex past

After an invasion of white supremacists, we need to see what our history means today.

Watching a tragedy happening in slow motion, without any way to stop it - that’s how it has felt to be from Charlottesville, Virginia in the summer of 2017. A city that used to always get voted “happiest town in the USA” when I was growing up was the target this weekend of an ugly white supremacist movement whose roots spread far from the city.

It was a huge surprise when we won the lottery of Nazi flags, with our stupid old statues that have become icons of international fascism, with a park named after a distantly forgotten old man becoming a site of struggle for an attempted racist coup of the United States. Our first reaction is: they aren´t from here. Our second: make them go away. Our third: a realisation we need to examine the way that our own ways of life, which we thought so harmless, have inspired such horrible feelings in strangers.

Maybe for my African-American classmates at high school the statue of Confederate general Robert E Lee, and the park when it was still named after him rather than Emancipation Park, always meant violence. Pulling the statue down says no more about the historical Lee than tearing down Lenin in '89 says about socialism. We've been invaded by people pretending to protect us from invasion, and the symbols of our past will never matter as much as living people do.

***

The invaders picked our town, probably, because Virginia was a confederate state, and was in fact where the southern gentry used to live. Lee exemplified this tradition. He was son of Lighthorse Harry Lee, a hero of the revolutionary war and governor of Virginia, and is a descendant of one of “Virginia’s first families,” the aristocratic Englishmen who emigrated to Virginia when it was a British colony. He is part of Charlottesville's heritage, and perhaps not even all that shameful a part. He opposed the secession of the confederacy, supported the reconstruction after the war, including giving rights to recently freed slaves. Not exactly woke, but for a confederate general, not as bad as some.

We were taught at Venable Elementary School that he fought only reluctantly, to defend his land, not slavery. In the version we learned, one would imagine Lee being very opposed to people from the Midwest coming to Virginia in cars with Ohio license plates to murder Virginians. Many non-racist Virginians, including quite a few friends, respect Lee deeply - the same is true in towns like New Orleans where other Lee statues are being taken down. Yet if once we could fool ourselves into thinking that the statue didn't represent hatred and racial hierarchies, we can't anymore. The discussion of local history has turned into one of national identity. The statue should be gone by Christmas. 

***

The real hero of Charlottesville is the town’s founder, Thomas Jefferson, who was among the most enigmatic of the founding fathers, idealistic and hypocritical - a real American, in other words. His idea of the gentleman farmer is also part of our heritage. It was an alternative to Hamiltonian industrial capitalism, but lost out in the tustle to shape American history. Much like English contemporaries such as William Cobbett, Jefferson believed in a rural ideal, reading poetry by morning, farming by afternoon, playing the harpsichord by night. His thought is also present in our beautiful "academical village" of the University of Virginia which he also founded. It is one of UNESCO’s few world heritage sites in the United States, so I guess it is part fo the globe's heritage as well, and it is also where the white supremacists stomped around with their tiki torches.

It’s time for us to stop being romantic about Jefferson, too. The statue in our minds needs to come down. We can recognize the great parts of his work, of his thought, in Charlottesville today, but we can also recognise that he allowed himself to use violence to dominate others, that he owned slaves and raped them. And we can recognise that equivalent scenarios continue to play out today, and will continue to play out until we are willing to face the truth.

There can be no more excuses. It’s not about Jefferson, or Lee, after all. We use monuments, statues, heroes, to inspire ourselves. In the end, the “truth” about Jefferson or Lee is a matter of trivia and history. Today, for every white male in America, we need to deconstruct the parts of our identity built on the graves of others. It’s not easy.

***

Jefferson's gentleman farmer was the forerunner of the people who populate the gentrified Charlottesville that exists today of expensive coffee-shops and celebrity-filled suburbs. This romantic idea, much like the lifestyles of the American and English elite today, seems to engender a lot of resentment from those who can only watch helplessly, and are often gentrified out. It’s not only immigrants or, in the United States, African-Americans, who are denied access to America's Williamsburgs and Charlottesvilles, London's Shoreditches and Oxfords. In Charlottesville, descendants of white sharecroppers and black slaves alike are unable to afford $15 glasses of local Virginia wine.

The paradox implicit in Jefferson’s beautiful idea is that in the end, it’s impossible to sustain this chilled-out and happy lifestyle without the labor being done by others, be they slaves, sharecroppers, or factory workers in China. If America is in trouble now, the conflict comes precisely from the fact that our universalist ideas of freedom, equality, and liberty correspond to an economy that is anything but universal. We actually did it, keep doing it, and unless we can use these ridiculous men dancing through our streets iin Halloween costumes as a funhouse mirror to make us see ourselves as we are, we’ll probably keep doing it.

I resent Jefferson for his hypocrisy, because in truth, I would love it if America looked more like Charlottesville than the industrialized and nasty-looking Interstate 95 highway that leads up the East Coast, the aftermath of Hamiltonian industrial-revolution factory America. The New Jersey towns, the gas stations, what we contemptuously call “McMansions,” suburban Northern Virginia... none of it is really authentic enough. Parallel to the rich and ugly suburbs, are poor and ugly towns, the sort of places with unemployment and discounts on cereal that tastes like sugary trash in the supermarket.

The residents of these towns don’t hate the residents of more gentrified towns for our organic granola, they hate the world for the structures of oppression that they can’t escape, even as an international class, an educated class, a well-meaning class, escapes without even needing to. We coexisted in the same place but not the same set of opportunities, and we glided on to new and bigger worlds of possibility, ones denied to those of different class backgrounds, regardless of their ethnicity.

***

Some of my African-American classmates at Charlottesville High School were likely descendants of Jefferson’s slaves, coming from poorer neighbourhoods and housing projects and taking "standard" level classes, with honors and AP classes for students whose parents worked in the University (very liberal, of course), a genteel place where every year, some kid wears blackface or a Nazi outfit to a party - as a joke, of course. While my classmates in AP and Honors classes got help from our teachers in applying to Ivy League schools, the general level classes saw black and white students who shared poorer backgrounds acting out to get attention from harried teachers. This was public school, but Charlottesville’s many excellent private schools, of course, didn’t even have the general level students at all.

Despite some southerners such as Lee supporting the post-war “reconstruction,” white resistance to racial equality led to a Jim Crow system that wasn’t much better than slavery, and an American South which dozed in sweaty decline while the rest of the country industrialised and modernized. From 1865 to 1965, not much happened in the South. True, there were intellectual movements like the Agrarians, whose 1920s manifesto “I’ll Take My Stand” I found one high school afternoon in the local bookstore, we had our Faulkners, our occasional geniuses. But as a society, it was stagnant. 

It was only when the civil rights movement began that the south began to actually rise again. UVa went from being a minor regional school to being a world-class one. Charlottesville went from being a mediocre gentleman’s club to a place that people of all backgrounds could make lives for themselves in the public service. And we, the public, gained so much - that’s why my family chose to live there.

I remember as a child strolling the beautiful downtown mall to go to dinner al fresco with my parents, my father pointed out a man in a turban; it was Satyendra Huja, a Sikh professor at the university who had planned the downtown mall, and made a useless street into one of the nicest places to congregate in town. In 2012, Huja became the mayor. I guess the former mayor of Charlottesville who single-handedly made Charlottesville one of the most charming towns in the country often gets told to “go home,” as if that's somewhere else.

Martin Luther King Jr.’s birthday is a national holiday in the United States, but in Virginia it used to be “Lee/King/Jackson” day, with two confederate officers added in just as a reminder. That’s not really our heritage, and as students, we were grateful for the day but always laughed at how immature it was that the powers that be needed to block out Dr. King’s achievements so much.

***

Charlottesville is a southern town true to and even obsessed with our heritage - a place filled with museums, historians, bookstores - which wants to dissect that heritage to remove the parts of our forefathers (and mothers) lives that we can’t accept, like a sandwich that you open up, take the pickles out of, and then keep on eating. We love our heritage in Virginia. We read about it, celebrate it, live it every day. But heritage isn’t a static thing, fixed in time, and the walls between myth and history are thin. In fact, perhaps knowing about your heritage is the ultimate form of privilege. I doubt that either the descendants of slaves I went to high school  with, or the “redneck” (so-called because they got sunburned by working in the fields - “redneck” is a class slur) descendants of the illiterate sharecroppers of rural Maryland, do. 

What happened this weekend to Charlottesville could happen to any town as long as we those who are deprived of their history and who don’t feel at home in their hometown. But the Charlottesville I remember, and the one it is now, proves that you can go from war and conflict and institutionalised racism to one where people of all races and identities can coexist, for the most part, peacefully and happily. We can, if we try, honor Jefferson for his achievements without forgetting the slaves his beautiful buildings were built by. A “Memorial to Enslaved Laborers” is being built on the campus he founded.

For the first time, every one of my old friends is thinking about racism, white privilege, the origins of violence, and what we can do about it. We can honor Jefferson and General Lee’s memory best by trying to learn from their mistakes. Maybe, if it seems like we are able to solve these problems, I’ll have a child myself. I hope she goes to Venable Elementary School, and I’ll take her to Emancipation Park afterwards.

This article first appeared in the 14 September 2009 issue of the New Statesman, Where next?