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)

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

Show Hide image

An English hero for the ages: Ian Botham at 60

Botham blends his sportsmanship and deep-seated passion for cricket with a lust for life.

Begging W H Auden’s pardon, it is possible both to honour and to value the vertical man, and in the case of Ian Botham, who turned 60 on 24 November, it is our bounden duty. No sportsman has given Britons so much to enjoy in the past half-century and no sportsman is loved more. Two decades after he retired from first-class cricket, his reputation as one of life’s champions remains unassailable.

No mere cricketer is he, either. Botham is a philanthropist, having raised more than £12m for various charities, notably Leukaemia and Lymphoma Research. In December, 30 years after his first walk from John o’Groats to Land’s End, he will set off again, in South Africa, where England are on tour. And he really does walk, too, not amble. As somebody who accompanied him on one of his dozen walks said: “You can’t keep up with him. The man is a phenomenon.”

Of all postwar sportsmen, only Bobby Charlton and, at a pinch, Henry Cooper come close to matching Botham’s enduring popularity. But Charlton, a shy man who was scarred by the Munich plane crash of 1958 (and may never have recovered from its emotional effects), has never comfortably occupied a public stage; and Cooper, being a boxer, had a solitary role. Botham, by contrast, spoke for England. Whenever he picked up his bat, or had a ball in his hand, he left spectators in no doubt.

Others have also spoken for England. Bobby Moore and Martin Johnson, captains respectively of England’s World Cup-winning football and rugby teams, were great players but did not reach out to people as naturally as Botham. Nick Faldo, Lester Piggott, Sebastian Coe and, to bring us up to date, Lewis Hamilton have beaten the best in the world, but they lacked those qualities that Botham displayed so freely. That is not to mark them down. They were, and are, champions. But Botham was born under a different star.

It was John Arlott, the great cricket commentator, who first spotted his uniqueness. Covering a match at Taunton in 1974, he asked the young colt to carry his bags up the rickety staircase to the press box, where Arlott, wearing his oenophile’s hat, pulled out a bottle of red wine and invited Botham to drink. Forty years later Botham is a discriminating wine drinker – and maker. Along with his friend and fellow England great Bob Willis, and their Australian wine­making pal Geoff Merrill, he has put his name to a notable Shiraz, “BMW”.

Arlott, with his nose for talent and good company, saw something in the young Botham that Brian Close, his captain at Somerset, was beginning to bring out. Later, Mike Brearley, as England captain, drew out something even more remarkable. As Rodgers and Hammerstein wrote, you’ve got to be carefully taught. And Botham, a fine team man as well as a supreme individual performer, has never withheld praise from those who enabled him to find his voice.

If sport reveals character, then cricket is the game that reveals it most clearly. In no other sport is the individual performance rooted so firmly in a team context. Every over brings a contest of skill and intelligence between batsman and bowler but only a team can win the match. “A cricketer,” as Arlott said, “is showing you something of himself all the time.”

Cricket also reveals national character more than any other sport. Football may be the most popular game in the world but cricket, and cricketers, tell us far more about England and Englishness. It is instructive, in this regard, to hear what Philippe Auclair, a French journalist and author long resident in London, has to say about Botham: “He is essentially an 18th-century Englishman.” In one! It’s not difficult to sense a kinship with Tom Jones, Fielding’s embodiment of 18th-century life, who began his journey, as readers may recall, in Somerset.

A country boy who played for Worcestershire after leaving Somerset, and who lives by choice in North Yorkshire, Botham is an old-fashioned Englishman. Although nobody has yet found him listening to the parson’s sermon, he is conservative with a small and upper-case C, a robust monarchist, handy with rod and gun, and happiest with a beaker in front of him. He represents (though he would never claim to be a representative) all those people who understand instinctively what England means, not in a narrow way, but through something that is in the blood.

Above all, he will be remembered for ever as the hero of 1981. Even now it takes some believing that Botham bowled and batted with such striking success that the Australians, who were one up after two Tests, were crushed. Some of us who were actually at Headingley for the famous third Test – thousands who claim to have been there were not – recall the odds of 500-1 on an England victory going up on the electronic scoreboard that Saturday evening.

Botham made 149 not out as England, following on, beat the Aussies by 18 runs. For three hours the country seemed to stop. In the next Test, at Edgbaston, Botham took five wickets for one run as Australia fell under his spell. Then, at Old Trafford, on a dank Saturday afternoon, he played the most memorable innings of his life and one of the greatest innings ever played by an Englishman: 118 magnificent, joyful runs. Joy: that’s the word. Botham brought joy into people’s lives.

Yet it was the final Test at the Oval, which ended in a draw, that brought from him a performance no less remarkable than those from before. He bowled 89 overs in that match, flat out, continuing to run in when others withdrew with injury. That was the team man coming to the fore. Little wonder his comrades thought the world of him.

Modest, loyal, respectful to opponents, grateful to all who have lent him a hand, and supported throughout a turbulent life by Kath, his rock of a wife, and their three children, this is a cricketing hero to rank with W G Grace, Jack Hobbs, Wally Hammond and Fred Trueman. A feature in the lives of all who saw him, and a very English hero. 

This article first appeared in the 26 November 2015 issue of the New Statesman, Terror vs the State