Where's your common sense?

Surely many people heard about Lehman Brothers, how this financial powerhouse fell from grace. But how did it happen? How did one of the top institutions, with abundant talents under its disposal, left its name in infamy?

The inside story came from none other than author Lawrence McDonald, Lehman Brothers’ vice-president of distressed-debt and convertible securities trading. He recounted how he entered the prestigious institution filled with pride but left with disappointment and shame.

The story started with how McDonald started in the field of trading and realized his dream of joining Lehman Brothers. Here, the author met with many skilled and talented traders that he happily called and friends and colleagues. Such group has brought the company numerous successes and wealth, and should have no problem rising to the top of its field.

However, things didn’t work out as it should be. While McDonald and the others discovered the problems raised from the subprime mortgage market early on and sounded their warnings, neither the mortgage and real estate department nor the company’s chairman Richard Fuld and president Joseph Gregory heeded. All efforts made by McDonald and others to save the company from the mortgage bubble failed in the end, no thanks, according to the author, Fuld and Gregory.

Reading this book has shed lights on a lot of details on how everything happened, how everything went wrong, how all of it could have been avoided but failed because of the chase of enormous wealth and prestige and lack of common sense.

I was really amazed at how something as trivial as common sense brought down one of the largest trading companies in the US, and how its collapse affected the global economy. I guessed it shouldn’t come as a surprise how wealth and ignorance can cloud one’s judgment.