A Wall Street Education

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8 February 2010 New York Federal [[Reserve|Welcome]] <<include "Timer">><<include "Timer 2">>

Dartmouth right? Fantastic. Timothy Geithner directed me to you. Check this email [[out|105]] <<include "Timer">><<include "Timer 2">>

<<set $inventory1 to []>> <<set $inventory2 to []>> <<set $inventory3 to []>> <<set $evidence to []>> <<set $locker to []>> <<set $conclusion to []>> <<set $lockercount to 0>> <<set $seconds to 180>> <<set $seconds2 to 300>> <<cacheaudio "SECLehman.m4a" "SECLehman.m4a">> <<cacheaudio "DavidGoldfarbCSO.m4a" "DavidGoldfarbCSO.m4a">> <<cacheaudio "StressTestFail.m4a" "StressTestFail.m4a">> <<cacheaudio "HankGoingUnder.m4a" "HankGoingUnder.m4a">> <<cacheaudio "B&CShutdown.m4a" "B&CShutdown.m4a">>

[[Bankruptcy]] [[External Mail]] [[Library]] [[Locker]](Scroll Down) [[Lehman Internal Mail|Lehman Brothers]] [[Report]]

<<include "Timer">><<include "Timer 2">> [[Timeline]] JARGON: [[Bank Run]] [[Repurchase Agreement]] [[Tobashi Scheme]]

You have $evidence.length piece(s) of evidence. Remember to scroll down <<set $locker to $inventory1.concat($inventory2, $inventory3)>> <<for _i = 0; _i < $locker.length+1; _i++>> <<if $locker[_i] == 105>> [[105]] [[Add to Evidence][$evidence.push(105)]] [[Delete from Evidence][$evidence.delete(105)]] <</if>> <<if $locker[_i] == "Repo">> [[Repo]] [[Add to Evidence][$evidence.push("Repo")]] [[Delete from Evidence][$evidence.delete("Repo")]] <</if>> <<if $locker[_i] == "Run">> [[Run]] [[Add to Evidence][$evidence.push("Run")]] [[Delete from Evidence][$evidence.delete("Run")]] <</if>> <<if $locker[_i] == "Wheels">> [[Wheels]] [[Add to Evidence][$evidence.push("Wheels")]] [[Delete from Evidence][$evidence.delete("Wheels")]] <</if>> <<if $locker[_i] == "B&C">> [[B&C]] [[Add to Evidence][$evidence.push("B&C")]] [[Delete from Evidence][$evidence.delete("B&C")]] <</if>> <<if $locker[_i] == "B&C Recording">> [[B&C Recording]] [[Add to Evidence][$evidence.push("B&C Recording")]] [[Delete from Evidence][$evidence.delete("B&C Recording")]] <</if>> <<if $locker[_i] == "Optimistic">> [[Optimistic]] [[Add to Evidence][$evidence.push("Optimistic")]] [[Delete from Evidence][$evidence.delete("Optimistic")]] <</if>> <<if $locker[_i] == "Bad News">> [[Bad News]] [[Add to Evidence][$evidence.push("Bad News")]] [[Delete from Evidence][$evidence.delete("Bad News")]] <</if>> <<if $locker[_i] == "Fuld Testimony">> [[Fuld Testimony]] [[Add to Evidence][$evidence.push("Fuld Testimony")]] [[Delete from Evidence][$evidence.delete("Fuld Testimony")]] <</if>> <<if $locker[_i] == "Talk">> [[Talk]] [[Add to Evidence][$evidence.push("Talk")]] [[Delete from Evidence][$evidence.delete("Talk")]] <</if>> <<if $locker[_i] == "Worry">> [[Worry]] [[Add to Evidence][$evidence.push("Worry")]] [[Delete from Evidence][$evidence.delete("Worry")]] <</if>> <<if $locker[_i] == "Timeline">> [[Timeline]] [[Add to Evidence][$evidence.push("Timeline")]] [[Delete from Evidence][$evidence.delete("Timeline")]] <</if>> <<if $locker[_i] == "Tobashi Scheme">> [[Tobashi Scheme]] [[Add to Evidence][$evidence.push("Tobashi Scheme")]] [[Delete from Evidence][$evidence.delete("Tobashi Scheme")]] <</if>> <<if $locker[_i] == "Ernst">> [[Ernst]] [[Add to Evidence][$evidence.push("Ernst")]] [[Delete from Evidence][$evidence.delete("Ernst")]] <</if>> <<if $locker[_i] == "Paulson">> [[Paulson]] [[Add to Evidence][$evidence.push("Paulson")]] [[Delete from Evidence][$evidence.delete("Paulson")]] <</if>> <<if $locker[_i] == "Linklaters">> [[Linklaters]] [[Add to Evidence][$evidence.push("Linklaters")]] [[Delete from Evidence][$evidence.delete("Linklaters")]] <</if>> <<if $locker[_i] == "Paulson 2">> [[Paulson 2]] [[Add to Evidence][$evidence.push("Paulson 2")]] [[Delete from Evidence][$evidence.delete("Paulson 2")]] <</if>> <<if $locker[_i] == "Geithner">> [[Geithner]] [[Add to Evidence][$evidence.push("Geithner")]] [[Delete from Evidence][$evidence.delete("Geithner")]] <</if>> <<if $locker[_i] == "Playing">> [[Playing]] [[Add to Evidence][$evidence.push("Playing")]] [[Delete from Evidence][$evidence.delete("Playing")]] <</if>> <<if $locker[_i] == "Growth">> [[Growth]] [[Add to Evidence][$evidence.push("Growth")]] [[Delete from Evidence][$evidence.delete("Growth")]] <</if>> <<if $locker[_i] == "Stress">> [[Stress]] [[Add to Evidence][$evidence.push("Stress")]] [[Delete from Evidence][$evidence.delete("Stress")]] <</if>> <<if $locker[_i] == "Under">> [[Under]] [[Add to Evidence][$evidence.push("Under")]] [[Delete from Evidence][$evidence.delete("Under")]] <</if>> <</for>> <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> <<include "Timer">><<include "Timer 2">>

Command Center

Interlude [[June 12 2008|Erin Fired]] <<include "Timer 2">>

Interlude [[September 7 2008|Shady Shit]]

6/05/2008 Lehman Brothers Internal Mail System FROM: REDACTED TO: REDACTED The balance sheet is looking real bad. I think we will need 105 to clean it up or the market will bury us. [[The Task][$inventory1.push(105)]] [[Remove from Locker][$inventory1.delete(105)]] <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> <<include "Timer">><<include "Timer 2">>

A tobashi scheme is a financial fraud through creative accounting where a client's losses are hidden by an investment firm by shifting them between the portfolios of other (genuine or fake) clients. Back to [[Library]] <span id="output"> Notepad <<textarea "$notes" $notes>> </span> <<include "Timer">><<include "Timer 2">>

<<set $lockercount to $lockercount+1>> There is nothing in the Library on what 105 is. I'll say start figuring out what 105 is by checking the date of the email and see if there were any others around that time. Email 105 was added to your Locker. When you are done investigating, put 3 things in evidence and make a report with one of three Conclusions: Lehman did nothing wrong Lehman were wrong but not enough to be criminals Lehman were criminals This is the Lehman Stuff: [[Get Going]] <<include "Timer">><<include "Timer 2">>

<<include "Timer">><<include "Timer 2">> Lehman Brothers 745 Seventh Avenue, New York, New York Now Located on the [[Internet|Lehman Brothers]]

<<set $lockercount to $lockercount-1>> You have removed item from locker. You now have $lockercount item(s). <<include "Timer">><<include "Timer 2">>

Emails and Memos: [[March 2008: Treasury|Paulson]] [[March 2008: Treasury 2|Paulson 2]] [[April 2008: Linklaters|Linklaters]] [[May 2008: Ernst & Young|Ernst]] <<include "Timer">><<include "Timer 2">>

March 2007 - Lehman announces record profits April 2007 - The first bankruptcies in Wall Street. August 2007 - Lehman fires 1200 employees. Shuts down BNC Mortgage. September 2007 - Lehman reports first loss in 5 years. May 2008 - More jobs slashed June 2008 - Lehman has first loss in over a decade September 10 2008 - Lehman announces record loss September 15 2008 - Lehman files for Bankruptcy [[Add to Locker][$inventory3.push(Timeline)]] [[Remove from Locker][$inventory3.delete(Timeline)]] Back to [[Library]] <span id="output"> Notepad <<textarea "$notes" $notes>> </span> <<include "Timer">><<include "Timer 2">>

<<set $lockercount to $lockercount+1>> You have added item to locker. You now have $lockercount item(s). <<include "Timer">><<include "Timer 2">>

- - - - - - - - - -Transcript 11/12/2008 (Date to be Verified)- - - - - - - - - BE: Are you sure? TG: It is without a doubt in my head that they were lying about the value of some of the assets on their financial statements. Or atleast inflating the value. BE.... Editor's Notes: BE - Bankruptcy Examiner TG - Timothy Geithner (NY Fed and then Treasury Secretary) <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory1.push("Geithner")]] [[Remove from Locker][$inventory1.delete("Geithner")]] <<include "Timer">><<include "Timer 2">>

Playing audio... <<audio "SECLehman.m4a" play>> <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory1.push("Playing")]] [[Remove from Locker][$inventory1.delete("Playing")]] <<include "Timer">><<include "Timer 2">>

Playing audio... <<audio "DavidGoldfarbCSO.m4a" play>> <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory3.push("Growth")]] [[Remove from Locker][$inventory3.delete("Growth")]] <<include "Timer">><<include "Timer 2">>

Playing audio... <<audio "StressTestFail.m4a" play>> <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory2.push("Stress")]] [[Remove from Locker][$inventory2.delete("Stress")]] <<include "Timer">><<include "Timer 2">>

Lehman Bankruptcy Depositions: [[What Fuld wanted|Under]] <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> <<include "Timer">><<include "Timer 2">> Back to [[Page 1|Bankruptcy]]

Playing audio... <<audio "HankGoingUnder.m4a" play>> <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory2.push("Under")]] [[Remove from Locker][$inventory2.delete("Under")]] <<include "Timer">><<include "Timer 2">>

3/23/2008 Treasury Department Mail System FROM: Hank Paulson, Secretary of the Treasury TO: REDACTED Where the fuck is Fuld? What is he doing? He should be trying to find a buyer for Lehman. Lehman collapsing won't just fuck his shareholders, it will fuck the whole economy. If he expects a bailout, he should keep dreaming. Hank <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory3.push("Paulson")]] [[Remove from Locker][$inventory3.delete("Paulson")]] <<include "Timer">><<include "Timer 2">>

3/31/2008 Treasury Department Mail System FROM: Hank Paulson, Secretary of the Treasury TO: REDACTED Does Fuld think that rasing $4 billion is enough? We need him to raise more. Can someone please get through to him. Hank <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory2.push("Paulson 2")]] [[Remove from Locker][$inventory2.delete("Paulson 2")]] <<include "Timer">><<include "Timer 2">>

1/30/2008 Linklaters FROM: Head of Client Relations TO: Managing Partner They are calling it Repo 105. None of the US law firms wanted to review them so they are askin us. Think we should go ahead? Stephen <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory1.push("Linklaters")]] [[Remove from Locker][$inventory1.delete("Linklaters")]] <<include "Timer">><<include "Timer 2">>

To get money for day to day funding, Banks take very short term loans by selling Repurchase Agreements, or Repos, to investors. These are very risky because the investor can cash, so to say, early and take their interest. They are also risky because the Bank may be unable to pay back. Repos can help hide problems in a company. <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> <<include "Timer">><<include "Timer 2">>

3/26/2007 Lehman Brothers Internal Mail System FROM: Eric Felder, Head of Global Credit TO: Bart McDale, Head of Equity I'm scared our repo is going to pull away. The reality of our problem lies in our dependence on repo. Investors find out, and we are fucked. Editor's Note: Find out about Repurchase Agreements (Repos) in the Library. <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory1.push("Repo")]] [[Remove from Locker][$inventory1.delete("Repo")]] <<include "Timer">><<include "Timer 2">>

3/26/2007 Lehman Brothers Internal Mail System FROM: Ian Lowitt TO: Eric Felder, Head of Global Credit (I) Agree there will be another run. I beleive it will be industry wide and not Lehman specific. <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory3.push("Run")]] [[Remove from Locker][$inventory3.delete("Run")]] <<include "Timer">><<include "Timer 2">>

11/24/2007 Lehman Brothers Mail System FROM: Deepali Advani TO: A Couple of Friends The wheels on the bus are falling off, falling off, falling off...The wheels of the bus are falling off, all over Wall Street. Check [[Reply|Optimistic]] <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory3.push("Wheels")]] [[Remove from Locker][$inventory3.delete("Wheels")]] <<include "Timer">><<include "Timer 2">>

6/6/2008 Lehman Brothers Mail System FROM: Dick Fuld TO: C-Suite Bankers have been calling me in the last few days...Mood is awfull(sic) and for the first time I am worried it might all unravel. Can't continue to say we are great. <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory2.push("Worry")]] [[Remove from Locker][$inventory2.delete("Worry")]] <<include "Timer">><<include "Timer 2">>

Emails and Memos: [[June 2008: Fuld worry|Worry]] [[August 2008: Watercooler Talk|Talk]] Transcripts: [[October 2008: Dick Fuld on Capitol Hill|Fuld Testimony]] [[Page 1|Lehman Brothers]] <<include "Timer">><<include "Timer 2">>

- - - - - - - - - - - - - - -Transcript 10/08/2008- - - - - - - - - - - - - - - DF: Nobody, including me, anticipated how the problems that started in the mortgage markets would spread to our credit markets and our banking system, and now threaten our entire financial system and our country... I take full responsibility for the decisions that I made...I believed at the time they were prudent. Notes: DF - Dick Fuld jr. CEO of Lehman Brothers This excerpt comes from testimony made by Fuld as a part of a congressional investigation on how the financial crisis America had suddenly found itself in started. <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory3.push("Fuld Testimony")]] [[Remove from Locker][$inventory1.delete("Fuld Testimony")]] <<include "Timer">><<include "Timer 2">>

11/25/2007 Lehman Brothers Mail System FROM: William May TO: Deepali Advani I think he is too optimistic. <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> Check [[Reply|Bad News]] <<include "Timer">><<include "Timer 2">>

11/24/2007 Lehman Brothers Mail System FROM: Deepali Advani TO: William May We are dying a slow death. <span id="output"> Notepad <<textarea "$notes" $notes>>> </span>

5/17/2008 Linklaters FROM: Head of Client Relations TO: Managing Partner Their lawyers say the 105s and 108s are good. I personally don't like them but I think they can move. What do you say? Roger <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory1.push("Ernst")]] [[Remove from Locker][$inventory1.delete("Ernst")]] <<include "Timer">><<include "Timer 2">>

11/25/2007 Lehman Brothers Mail System FROM: REDACTED TO: REDACTED Well, they used the 105s and 108s to move bad assets away temporarily. But now, noone wants them because they don't think Lehman can buy them back. I am already job hunting. <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory1.push("Talk")]] [[Remove from Locker][$inventory1.delete("Talk")]] <<include "Timer">><<include "Timer 2">>

8/15/2007 Lehman Brothers Internal Mail System FROM: CFO TO: Dick Fuld, CEO I know this hurts Dick but we are going to have to shut down B&C. Only 1200 will be cut and we will save money which can keep us going. We are bleeding and we need something soon. [[Listen to anouncement|B&C Recording]] Editor's Note BNC Mortgage was a subprime lender they owned. <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory2.push("B&C")]] [[Remove from Locker][$inventory2.delete("B&C")]] <<include "Timer">><<include "Timer 2">>

A run on a bank is when people, or investors, decide to withdraw all their money from that bank when they think that the bank is liable to shut down. By law, bankrupt banks pay their debts long before savings. <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> <<include "Timer">><<include "Timer 2">>

Playing audio... <<audio "B&CShutdown.m4a" play>> <span id="output"> Notepad <<textarea "$notes" $notes>>> </span> [[Add to Locker][$inventory2.push("B&C Recording")]] [[Remove from Locker][$inventory2.delete("B&C Recording")]] <<include "Timer">><<include "Timer 2">>

06/12/2008 Breaking News: Lehman Brothers has just fired its CFO Erin Callan, who has been CFO for just 6 months, has been fired by Lehman Brothers. This seems like a move by the firm to appease the market gods. Lehman brothers is teetering on the edge with its peer Bear Sterns having already fallen over by getting itself sold. Standby for more info. <<include "Timer 2">>

06/12/2009 Breaking News: Author and former Wall Street banker says some "Shady Shit was going on at Lehman. The author says that Lehman collapsed too quickly and must have been hiding some of their losses elsewhere during the build up. He says he has some ideas but isn't going to make them public yet.

Piece has been added to evidence You have $evidence.length piece(s) of evidence. Maximum 3 pieces. Back to [[Locker]] Go to [[Report]] <<include "Timer">><<include "Timer 2">>

Piece has been removed from evidence. You have $evidence.length piece(s) of evidence. Maximum 3 pieces. Back to [[Locker]] Go to [[Report]] <<include "Timer">><<include "Timer 2">>

<<if $evidence.length < 3>> You don't have enough evidence. Return to [[Locker]] <<elseif $evidence.length > 3>> You have to much evidence. Return to [[Locker]] <<else>> [["Lehman executives knowingly misled their investors and the public on the state of their business"]] [["Lehman executives were just dillusional and any public signalling was a result of this"]] [["No crime was committed unless you count crimes against common sense"]] <</if>>

<<for _i = 0; _i < $evidence.length; _i++>> <<for _j = 0; _j < $inventory1.length; _j++>> <<if $evidence[_i]== $inventory1[_j]>> <<set $conclusion to $conclusion.concat($evidence[_i])>> <</if>> <</for>> <</for>> <<if $conclusion.length < 1>> You evidence doesn't seem to support your claims very[[well.|Epilogue 2]] <<else>> You did a pretty good [[job.|Epilogue]] <</if>>

<<for _i = 0; _i < $evidence.length; _i++>> <<for _j = 0; _j < $inventory3.length; _j++>> <<if $evidence[_i]== $inventory3[_j]>> <<set $conclusion to $conclusion.concat($evidence[_i])>> <</if>> <</for>> <</for>> <<if $conclusion.length > 1>> You evidence doesn't seem to support your claims very[[well.|Epilogue 2]] <<else>> Great Job! The Court Examiner was also able to corroborate and found that Lehman did some serious fraud. They will be paying fines all throughout their bankruptcy! You did a great [[job.|Epilogue]] <</if>>

<<for _i = 0; _i < $evidence.length; _i++>> <<for _j = 0; _j < $inventory1.length; _j++>> <<if $evidence[_i]== $inventory1[_j]>> <<set $conclusion to $conclusion.concat($evidence[_i])>> <</if>> <</for>> <</for>> <<if $conclusion.length > 1>> I find that hard to believe with the evidence you have just [[presented.|Epilogue 2]] <<else>> [[Epilogue|Epilogue 3]] <</if>>

Epilogue 18 Months [[Later|Bad Performance]]

Epilogue 18 Months [[Later|Great]]

Epilogue 18 Months [[Later|Not Great]]

Well, you weren't as good as we hoped. The court examiner was able to find that Lehman did do some playing with financial statements. Oh well.

Your evidence didn't match your accusation. The report was therefore thrown out. This makes me wonder if you were the right hire.

12/12/2010 Breaking News: New York Attorney General Files Charges against Lehman Brothers and Ernst & Young