Lehmans

blackanchorage

I posted earlier a question about whether a liquidator can cherry-pick whose salaries are paid. I resigned from Lehman in August, and finished on 25 September... and I have not been paid, unlike the people still working there. Does anybody know if this is legal?

I know it's not fair - I'd been at Lehman for 8 years, and worked my notice fully. I was also assured this month that I would be paid - otherwise I could have walked out and started my next job sooner.

Regards

blackanchorage

edwinac asks an interesting question about the Glass-Steagall act. That was originally put in place to separate retail from investment banking, I think so that the failure of the investment bank would not cause ordinary people to lose money. However, over the last few months, the market has decided that an investment bank cannot manage independently, it needs an associated retail bank to have a good capital base.

However, I don't think it's beyond the incompetence of an investment bank to really screw up, and consume all the capital available to it - in which case ordinary people WILL lose all their money. So I think the consequences of a major investment bank failure have potentially just got much worse...

Regards

GDB2222

blackanchorage wrote: »

edwinac asks an interesting question about the Glass-Steagall act. That was originally put in place to separate retail from investment banking, I think so that the failure of the investment bank would not cause ordinary people to lose money. However, over the last few months, the market has decided that an investment bank cannot manage independently, it needs an associated retail bank to have a good capital base.

However, I don't think it's beyond the incompetence of an investment bank to really screw up, and consume all the capital available to it - in which case ordinary people WILL lose all their money. So I think the consequences of a major investment bank failure have potentially just got much worse...

Regards

Can't you have common ownership of the retail and investment banking parts of the business, whilst firewalling them in separate subsidiaries?

blackanchorage

GDB2222 wrote: »

Can't you have common ownership of the retail and investment banking parts of the business, whilst firewalling them in separate subsidiaries?

Probably - from Wiki: "2. Conflicts of interest can be prevented by enforcing legislation against them, and by separating the lending and credit functions through forming distinctly separate subsidiaries of financial firms."

But does that make it completely secure? What about the pension schemes that Maxwell defrauded? Weren't they firewalled off?

Regards

sabretoothtigger

All forms of banks need tighter regulation on levels of debts they accumulate so investment banks switching to retail is a better idea allready as they will be under more regulation

Generali

blackanchorage wrote: »

Probably - from Wiki: "2. Conflicts of interest can be prevented by enforcing legislation against them, and by separating the lending and credit functions through forming distinctly separate subsidiaries of financial firms."

But does that make it completely secure? What about the pension schemes that Maxwell defrauded? Weren't they firewalled off?

Regards

AFAIK, you can have a structure where there is a holding company which holds shares in the investment bank and retail bank as separate entities. If the investment bank goes bust but the retail bank is still ok, it can be floated off or sold as a going concern.

The pension scheme trustees were strongarmed into investing a large proportion of their assets in Maxwell companies which, it transpired, weren't good for the money.

Sir_Humphrey

http://www.lehman.com/bcp.htm

Lehman's administrators perhaps should pull the plug on this part of their website.

Business Continuity Management: Business Continuity Preparedness

Best Practices
Lehman Brothers has instituted industry-leading best practices for business continuity. These best practices have been developed in conjunction with our internal audit, security, and technology groups, as well as external consultants. These best practices provide a guide for creating practical and effective business continuity plans. Lehman Brothers' processes are built with business continuity in mind, embedding the necessary resources and knowledge into our day-to-day operations.

Presumably this planning included hurricanes and terrorist attacks but not Weapons of Mass Financial Destruction!

Generali

Sir_Humphrey wrote: »

http://www.lehman.com/bcp.htm

Lehman's administrators perhaps should pull the plug on this part of their website.



Presumably this planning included hurricanes and terrorist attacks but not Weapons of Mass Financial Destruction!

I sat on the Business Continuity Committee of a Japanese bank. A bigger exercise in box ticking you will not see. The DR building was only a couple of hundred yards up the road for goodness sake. They'd have struggled with a disaster greater than a burst water main.

It was even more pointless than the -isms committees they had. We'd get solemn lectures about how we had to be inclusive and how important it was that we didn't annoy [excluded monority] whilst being expected to believe that it was mere coincidence that every single department in the bank was headed or co-headed by a middle-aged Japanese man.

sabretoothtigger

If you had purchased $1,000 of AIG stock one year ago, you would have $42 left.

With Lehman, you would have $6.60 left.

With Fannie or Freddie, you would have less than $5 left.

But if you had purchased $1,000 worth of beer one year ago, drank all of the beer, then turned in the cans for the aluminum recycling REFUND, you would have had $214.

Based on the above, the best current investment advice is to drink heavily and recycle.

It's called the 401-Keg

PasturesNew

Except we are not paid for our recycled cans.