Suddenly I realized something: in spirit, I was very much like my father. By inclination I was not a true perma-bear, but I was nonetheless a bear. Or perhaps I was a vulture; that’s a slightly different breed, but much the same, one of God’s creatures that can smell death when it’s in the air.

One truism that drives me up the wall, is the oft-repeated claim that no one saw the GFC coming. No one knew that it was a bubble. No one could foresee that unregulated banking and trading of bonds could go wrong.

What absolute bunkum. My favourite story is Queen Elizabeth’s visit to the London School of Economics in November 2008, when she demanded to know how the crash could have happened? A panel of economists responded with a letter that admitted many had seen the crisis on the horizon, but they had been ignored.

A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers by the company‘s vice president Lawrence G. McDonald and Patrick Robinson offers an inside perspective of the events that led to this global firm’s Chapter 11 filing. Lehman’s is another phantom of the GFC, whose collapse much like that of Enron and Worldcom, represented very visible signs of the tenuousness of the market.

McDonald discusses his own life before Lehman’s at length. A product of a broken home, his dad was himself a successful businessman who chose golf over his wife and five children. McDonald credits his own success to an aptitude for hard graft, determination and having not been inculcated by the Ivy League business school mentality. At one point he favorably quotes similar sentiments from Michael Douglas’ character in Wall Street.

The book also discusses the dotcom bubble which preceded the turn of the century. McDonald was one of the founders of ConvertBond.com, which purported to represent the future of business trading – entirely online, with a far more accurate, up to the minute assessments of bonds. He claims his partner Steve Seefeld had a greater understanding of computer programming than anyone in the United States, with the exception of Bill Gates. The two were young turks on the business scene, intimidating the established business experts with their new-fangled approach to trading and aided in their promotional blitz by the recruiting of reporter Kate Bohner.

McDonald eventually made his way to Lehman’s after ConvertBond.com was bought out by Morgan Stanley. He takes the opportunity to discuss the Enron scandal briefly, before discussing the regime at his new firm, identifying CEO Richard S. Fuld as an ivory tower figure, supported by a patsy Chief Operating Officer Joseph M. Gregory. Their blinkered perspective, as well as the signing of a repeal of Glass-Steagall by President Clinton, combined to end the reign of Lehman’s on Wall Street.

The subtitle The Inside Story of the Collapse of Lehman Brothers should be understood as a very literal description of the book. Readers expecting an objective assessment of the economic crash should look elsewhere. This topic needs a Rajiv Chandrasekaran to give a proper account of what happened. Instead of addressing the realities of the GFC for ordinary people, McDonald indulges in long-form autobiography. The brief asides on the extent of the crash feel insincere. There is also an overreliance on military metaphors, perhaps a holdover from co-writer Patrick Robinson’s naval fiction.

What emerges from this account is an unintended vision of a Wall Street enclave of self-mythologizing traders, which explains how the scope of greed revealed became so staggering. It occured to me that what precipitated the Global Financial Crisis should not be referred to as ‘white-collar crime’, despite the embezzling, fraud and theft. ‘Crime’, presumes the possibility of being caught.

This is a dull, long-winded and disappointing reflection on one of the most devastating events in economic history.

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