Curiouser and curiouser grows the looking-glass world of finance. How quickly superlatives are superseded. Just when it seems that we have seen the strangest, most amazing occurrences, the weekend comes along, we enjoy a brief respite, then the following week brings us stranger and yet more amazing events.
Did anyone seriously expect to see the august Morgan Stanley so twisted in knots because of internecine combat that seems a cross between the Lehman Brothers blood feud of the mid-1980s
and the spontaneous popular uprising that toppled the Philippines’ Ferdinand Marcos in 1986? Or expect to see the New York Stock Exchange launch a bold bid to break free from its floor-based trading by purchasing Archipelago Holdings, only to have a group led by financier Ken Langone try to stymie the deal? (Langone being the fellow who, while chairing the Big Board’s compensation committee, approved former NYSE chairman Dick Grasso’s big payday.) Finally, we wake one morning to read that Hank Greenberg, the former CEO of AIG, is threatening to sue the company to retrieve withheld files, antiques and mementos. According to the Wall Street Journal, these include letters his mother sent him during his wartime service, his underwear and his Water Pik.
High finance; low farce. At times it feels as though, to switch literary metaphors, we are wandering about in a cloud of drizzly unknowing, an ass’s head substituted for our own, waiting for the enchantment to be lifted. For many bystanders there is no end of pleasure to all of this: the joy of watching the great humbled. But the schadenfreude soon wanes, leaving us with a bewildering disarray that unsettles our expectations of service and security.
Not all companies or executives have fallen victim to the casual comedy, of course. One notable exception is the subject of this month’s cover story: Lehman Brothers. As revealed by Senior Editor Justin Schack in “Restoring the House of Lehman,” page 24, the firm, under the hard-nosed direction of CEO Richard Fuld, has rebounded from its days as the laughingstock of Wall Street -- and rumored takeover bait for just about every big foreign bank -- to recapture much of its former glory. Rivals would do well to study how Lehman became, once again, a serious player.
