And, here it is....
Feel free to leave your best guess(es) in the comments along with your reasoning. We have our own, but will wait to disclose so as not to corrupt the noodling process.
On another note, doesn't this pretty much destroy the systemic risk argument that was used to justify the sweeping changes to the bankruptcy code in 2005, which grants exemptions for derivatives and repos from automatic stay? In other words, if all the counterparties to a bankrupt entity can liquidate the counterparty's collateral they're holding for repos and derivative trades, doesn't that fuel the "wave of selling unlike any we have seen before"?
Thank you ISDA.
John Mack
ReplyDeleteSheila Bair? (11 spaces)
ReplyDeleteIt must be someone who would state with conviction that TBTF is insanity and be in a position to imply power to "end" it, so gov rather than dealer. FDIC could have had some trivial exposure to demand deposit accounts.
Hank Paulson would also fit on size but Treasury would not have had "exposure" to Lehman and he did not want to end TBTF.
Alexander Hamilton's ghost
ReplyDeleteColor me insane, but I'm going with Blankfein.
ReplyDeleteI agree with Ellis' analysis about it not being a dealer. Paulson is in bed with TBTF and hedge funds; Geithner is a weasel, but a good possibility. Bair may be the correct guess, so I'll take someone like Daniel Mudd or Richard Syron.
ReplyDeleteNO way did Blankfein or John Mack author that email, the mere suggestion of which is wildly wrong, since they & the other TBTF firms have always opposed centralized clearing.
ReplyDeleteSheila Bair is an inspired guess.
OK, that's long enough...who?
ReplyDeleteI will post some thoughts tomorrow :->
ReplyDeleteAlan Greenspan!
ReplyDeleteI'm hedging. Bill Gross (10 spaces) also fits, also could have been "exposed" also would use the phrase "end the insanity of TBTF," though more in the context of toady, would know and be able to inductively reason the mechanisms and responses which favored his book, would have a deep interest in functioing markets, "wave of selling WE have seen" makes more sense in the second person, where Bair would be less likely to say "we" w/r/t "selling waves," Gross would be expected to pen an urgent missive in non-governmental format (no numbered paragraphs, no boilerplate intro/sig, no letterhead imprimatur), Gross is known to use net-based comms, the writer is curiously sanguine on systemic risk which Bair would be expected to be preoccupied with, Gross is wired into FED mechanics and operations, and Bair would not have asked for a phone call instead of a reply email.
ReplyDeleteSecond draft thought.
Dick Fisher
ReplyDeleteI will agree with the Alan Greenspan vote. I think he was working for John Paulson at the time.
ReplyDeleteMy intial guess: Lloyd C. Blankfein. Goldman Sachs had pushed for investment bank dergulation around that point in time. They quickly transformed into bank holding companies so that they could qualify for Federal Reserve loans and government bailout money.
ReplyDeleteBut, on reading the email again, then again, I'm going to go with CHRISTOPHER COX, head of the SEC at the time - because of his expressed concern for other industries aspects, what should happen in conjunction w/the failure and because the SEC had been investigating Lehman for very skanky trading activities. The SEC had exposure for failing to regulate (what else is new). They were sitting on a mountain of info and did nothing.
What are your thoughts on this?
ReplyDeleteSorry, this will have to wait. Got a few new ideas based on some private communications.
ReplyDelete