A Colossal Failure of Common Sense

Oneofthebiggestquestionsofthefinancialcrisishasnotbeenanswereduntilnow.WhathappenedatLehmanBrothersandwhywasitallowedtofail,withaftershocksthatrockedtheglobaleconomy?Inthisnews-making,oftenastonishingbook,aformerLehmanBrothersVicePresidentgivesusthestraightanswers—rightfromthebellyofthebeast.InAColossalFailureofCommonSense,LarryMcDonald,aWallStreetinsider,reveals,thecultureandunspokenrulesofthegamelikenobookhaseverdone.ThebookiscouchedintheveryhumanstoryofLarryMcDonald'sHoratioAlger-likerisefromaMassachusetts"gatewaytonowhere"housingprojecttotheNewYorkheadquartersofLehmanBrothers,homeofoneoftheworld'stoughesttradingfloors.Wegetaclose-upviewoftheparticipantsintheLehmancollapse,especiallythosewhosawitcomingwithahelpless,angrycertainty.WemeettheBrahminsatthetop,whosereckless,pedal-to-the-flooraddictiontogrowthfinallydemolishedthenation'soldestinvestmentbank.TheWallStreetweencounterhereisaruthlessplace,wherebrilliance,arrogance,ambition,greed,capacityforrelentlesstoil,andotherhumantraitscombineinapotentmixthatsometimesfuelsprosperitybutoccasionallydestroysit.ThefullsignificanceofthedissolutionofLehmanBrothersremainstobemeasured.Butthismuchiscertain:itwasadevastatingblowtoAmerica's—andtheworld's—financialsystem.Anditneednothavehappened.Thisisthestoryofwhyitdid.