What We Learned From Lehman Brothers

" this week the landscape of the global financial system shifted. As the Lehman Brothers collapsed into bankruptcy. -- impact was immediate. The Dow dropping over 500 points and the financial system was rocked leading to other bank failures. And then bail -- today President Obama heads to Wall Street. Where he's expected to tout positive changes in the financial industry. And offer new rules to avoid another financial crisis to put it all in perspective I'm joined by trees Bruce Forrester. He's a former managing director at Lehman Brothers and the current president south beach capital markets. Lawrence O'Donnell is a former vice president of Lehman he actually authored colossal failure of common sense the inside story of the collapse of Lehman Brothers. And Bob O'Brien is the stocks comments from Barron's online good morning gentlemen good to see Obama giving it. Bruce let me start with -- you have some very strong opinions about this and why Lehman Brothers was allowed to fail how would change the system forever. --"

" Which is I'm sorry that you addressed that to me yes so why aren't allowed to fail. Well I think to start let's go back to march when when. Bear Stearns was orchestrated into the arms of JPMorgan. Shortly after that of course there were congressional hearings. Then they had present New York fed Tim Geithner now Treasury Secretary said. We hated to do this but we didn't have the systems in place. To allow bear to fail we need to do that. Fast forward those systems were still not in place when Lehman Brothers found itself -- those Souter on the Sunday evening. And the system couldn't handle that in retrospect should something have been done and that's what we're here to talk about today."

" Aren't -- but did -- senior members of the management team internally. In the wake of that weekend and what was happening to the capital markets that they do enough."

" Well you know there was so many mistakes made previously I mean I really wrote this book cost a thing of common sense to expose the few. That hurt so many mean so many people listening to us right now. Have been crushed by by the Lehman brothers' failure credit lines and slashed on credit cards 401 k's have been been crushed as well as small business owners especially been really hurt. And down. You know things were done at Lehman Brothers in the in the years prior that really hurt the bank that put the bank in a very vulnerable position we had. -- really go across Wall Street peacetime generals that the Helms of these firms. And other words risk takers were being silenced one by one by one the best risk takers Lehman hand. It also. It's at Citigroup unit but chuck prince and over at Merrill Lynch NT O'Neil C had these political operatives -- maneuvering great risk takers and that's what put us. On really that done that the diseases disasters doorstep. Obviously."

" Yeah ideal I think the -- you know the two factors other really played into the collapse of the financial market. Worthy incredible risk appetite that really -- dumped around 2008 and number two. Though the leverage that was available to it so sort of a perfect storm in some ways the creative that now. A year later. You could argue that perhaps some of that leverage has been drained out of the system and that that kind of liquidity the easy access to liquidity. Isn't there -- it lessens the risk that we're going to revisit these crises. However the risk appetite is clearly back in and significant way."

" Which could be very dangerous it's interesting -- that you point in in some notes to an Op Ed piece written in New York Times. Agendas are -- wrote that op Op Ed piece about whether or not in fact. Lehman had to fail to order for the system to move forward it was going to be something what it was Lehman or somebody else. And look we went out we rescued AIG he shortly thereafter with 85 billion dollars that tallying double. -- look back on this period ended we've learned our lesson."

" In my view we we have not so far learned our lessons I'm told the president's going to make a speech today. I don't know if he's going to address. What do you think through -- do going forward but I don't think we have. And to my point of view. More regulation interesting. The business is already very heavy -- rarity heavily regulated. To me a hard line in the sand these to be drawn Alexis. And separation of consumer deposit taking. Insurance underwriting and securities. Underwriting must be drawn you want to call -- glass -- that's okay with me. We do not however need to be taking -- risk out of our marketplace. That's what has distinguished it. We need to get to where the next Lehman Brothers can fail the government and the taxpayers. Wherever they are do not have to step it."