I have not yet finished David Wessel's In Fed We Trust: Ben Bernanke's War on the Great Panic -- mostly because -- full disclosure -- I'm scribbling away on my own book: The Great Mistake: The Fall of Lehman Brothers and the Weekend That Changed The World for John F Wiley & Sons, due this Winter.
However, there are things expressed in the review of Wessel's book by Robert Teitelbaum that, I know from my own research into the reasons why Lehman fell, need to be addressed -- fast, before they seep into the consciousness of the reading public as fact.Both Wessel's book and the far more risible account of Lehman's demise by Lawrence McDonald, which is a misleading-bordering-on-hallucinatory account of what happened, contain certain key errors.
- Hank Paulson did not dislike Dick Fuld. Quite the contrary.
- Teitelbaum's take on Wessel: "When Paulson finally decides the government can't save Lehman, the decision remains opaque. He mentions politics and Moral Hazard. But Wessel has already slyly suggest that perhaps his disdain for Lehman fed the decision."
- This is also not true. Nobody tried harder to save Lehman Brothers than Hank Paulson and his team at Treasury.
- Hank Paulson did not, as Teitlelbaum summarizes Wessel, "fail to understand the implications of Lehman's failure." Possibly, other people did. Read my book to see who.
- Dick Fuld was not uninvolved in Lehman's negotiations with KDB, the Korean bank. Anyone who knows the slightest thing about Dick Fuld's character would know that he would never let Lehman engage in major merger talks without inserting himself into the process.