Just three years ago Lawrence McDonald found himself at the epicenter of a global financial crisis. As vice president of distressed debt and convertible securities at Lehman Brothers Holdings, he was on hand during the collapse of the firm, its markets and the global economy. McDonald — out of work and reeling from the loss of much personal wealth tied to the firm — turned to writing. The result was A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers. He’s now president of asset manager LGM Group and senior director of corporate credit sales at Newedge, the brokerage formed by Société Générale and Crédit Agricole.

McDonald, 46, sees more than a few similarities between the summer of ’08, just before the collapse of Lehman, and the current economic and financial environment. He spoke with Institutional Investor Contributing Writer Steve Rosenbush about those similarities — and why this time the situation is even more serious. Here are highlights of their conversations.

Institutional Investor: Why do today’s financial markets remind you of the situation in the summer of 2008?

McDonald: The situation that we now face is very similar to the summer of ’08, very similar to the early stages of the credit crisis, before Lehman. Banks are just not lending to one another. There are many disturbing indicators. The Euribor-OIS spread, a measure of banks’ willingness to lend to one another, was just a few basis points from 2003 to 2007. Now it has widened to levels last seen during the credit crisis — 80 or more basis points. That is just crazy. That is huge.

The TED spread, a measure of what banks charge to lend to one another, is the highest it has been in more than a year. The same is true for the dollar LIBOR-OIS spread, a sign that banks are unwilling to lend. The CDX index that measures corporate credit risk is rising. And CDS on five-year Italian debt is blowing out. I think that is very, very important.

Here are other distressing signs. IPOs such as Facebook are getting delayed or pulled. High-yield debt issuance is very low. It’s also troubling that the credit markets have not been able to keep up with the equity markets. Since August 1 stocks have made huge moves of 6 or 7 percent or more, from peak to trough and back up. But the credit markets have not bounced back from waves of selling to the same extent. That is because the credit markets are so much bigger. It’s like turning an aircraft carrier. You don’t buy unless the conviction is really there. And it’s not.