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This week the landscape of the global financial system shifted.
As the Lehman Brothers collapsed into bankruptcy.
-- impact was immediate.
The Dow dropping over 500 point and the financial system was walked leading to other bank failures.
And then -- held today President Obama heads to Wall Street.
Where he's expected to tout positive changes in the financial industry.
And offer new rules to avoid another financial crisis to put it all in perspective I'm joined by -- Bruce Forrester.
He's a former managing director at Lehman Brothers and the current president South Beach capital markets.
Lawrence O'Donnell is a former vice president at -- he actually authored colossal failure of common sense the inside story of the collapse of Lehman Brothers.
And Bob O'Brien is the stocks comments from Barron's online good morning gentlemen good to see -- they're giving it.
Bruce let me start -- really you have some very strong opinions about this and why Lehman Brothers was allowed to fail how would change the system forever.
-- Which is I'm sorry did you address that to me yes well so why wasn't allowed to fail.
Well I think to start let's go back to march when when.
Bear Stearns was orchestrated into the arms of JPMorgan.
Shortly after that of course there were congressional hearings.
Then they had present New York fed Tim Geithner now Treasury Secretary said.
We hated to do this but we didn't have the systems in place.
To allow -- to fail we need to do that.
Fast forward those systems were still not in place when Lehman Brothers found itself with -- -- on the Sunday evening.
And the system couldn't handle it in retrospect should something have been done that's what we're here to talk about it.
-- in retrospect did the senior members of the management team internally.
In the wake of that weekend and what was happening to the capital markets did they do enough.
Well you know there -- so many mistakes made previously I mean I really wrote this book console failure of common sense to expose the few.
That hurt so many mean so many people listening to us right now.
Have been crushed by by the Lehman Brothers failure credit lines and slashed on credit cards 401 k's have been been crushed as well as small business owners especially -- really hurt.
You know things were done -- -- and Brothers in the in the years prior that really hurt the bank to put the -- and very vulnerable position we had.
-- really go across Wall Street peacetime generals at the Helms of these firms.
-- words risk takers were being silenced one by one by one the best risk takers Lehman hand.
It's at Citigroup unit but chuck prince and over at Merrill Lynch hits -- -- -- had these political operatives helped maneuvering great risk takers and that's what put us.
On really that done that the diseases disasters doorstep.
-- -- -- Yeah I -- I think the you know the two factors other really played into the collapse of the financial market.
Worthy incredible risk appetite that really -- up -- -- out 2008 and number two.
Though the leverage that was available to -- so it was sort of a perfect storm in some ways -- -- -- that now.
A year -- there.
You could argue that perhaps some of that leverage has been drained out of the system and that that kind of liquidity the easy access to liquidity.
Isn't there and that lessens the risk that we're going to revisit these crises.
However the risk appetite is clearly back in and significant way.
Which could be very dangerous it's interesting -- that you point in in some notes to an op Ed piece written in New York Times.
-- are -- wrote that op Ed piece about whether or not in fact.
Lehman had to fail in order for the system to move forward and it was going to be something what it was Lehman or somebody else.
And look we went out we rescued AIG he shortly thereafter with 85 billion dollars -- telling his double.
You'll look back on this period ended we learn our lesson.
In my view we we have not so far learned our lessons I'm told the president's gonna make a speech today.
I don't know if he's gonna address.
What do you think -- do going forward but I don't think we have.
And to my point of view.
More regulation interesting.
The business is already very heavy -- a rarity heavily regulated.
To me a hard line in the sand needs to be drawn Alexis.
And separation of consumer deposit taking.
Insurance underwriting and securities.
Underwriting must be drawn you -- -- call -- Glass-Steagall too that's OK with me.
We do not however need to be taking risk out of our marketplace that's what has distinguished it.
We need to get to where the next Lehman Brothers can fail and the government and the taxpayers.
Wherever they are do not have to step him.
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