The effusive acknowledgements at the end of Vicky Ward’s account of the final quarter-century in the 160-year history of investment bank Lehman Brothers give a pointed anecdote about the literary editor of the British newspaper on which she began her career as a cub reporter.
One day she admitted to this man that she would like to write a book. ‘Are you aware just how difficult that is?’ he asked.
At that moment, Ward made a defiant resolution: ‘I decided that by the time I was 40, I would have written a serious book on a significant subject.’
For her debut, Ward selected a particularly challenging story. The cast of characters listed, blockbuster-style, at the beginning of her text runs to seven pages. All these Harveys and Herberts, with their preppy diminutives, were players in an epic catastrophe, fuelled by greed and self-delusion, but notably lacking in the self-knowledge or retribution that provide the catharsis in classical tragedies.
The scale of Lehman’s downfall is at once gargantuan and minute.
On the one hand, the bank’s fall was both symptom and factor in the global financial crisis. On the other, the story has something of the quality of Hans Christian Andersen’s chilling fairy story about the scientist who observes a drop of water under a microscope and sees in it a myriad tiny organisms, fighting and betraying one another with all the energy their little forms can muster, unaware of the fact that they could all be swept away in an instant by a flick of a housemaid’s duster.
The story of the latter years of Lehman begins in the early 1980s with something almost like innocence – not a quality readily associated with Wall Street, but Lehman always saw itself as standing slightly apart from the common financial herd.
Protestors hold signs behind Richard Fuld, executive of Lehman Brothers Holdings
In 1984 the bank had just emerged from a vicious bout of corporate infighting. In the shake-out that followed, five men became preeminent: Dick Fuld, a foul-mouthed trader known as ‘the Gorilla’ for his sloping forehead and habit of grunting, and a quartet known as the Ponderosa Boys, in reference to the 1960s TV series Bonanza.
The Ponderosa Boys – Chris Pettit, Joe Gregory, Tommy Tucker and Stevie Lessing – were neighbours.
They drove to work together and their families socialised together. They were a band of brothers, led by Pettit, a former Marine, and they brought their ethos to the firm they ran.
Pettit was seen as ‘Messianic’. His code of personal and professional honour inspired those who worked with him and clearly enraptures Ward, who dates Lehman’s slide towards bankruptcy from the moment that Pettit lost sight of his ideals.
The death agonies of Lehman have provided rich pickings for a host of authors and film-makers, but for a reader from outside the hermetic world of high finance, the fascination of Ward’s account lies in the human stories and the quirky detail.
She excels at these: interminable accounts of meetings are lightened with vignettes: Hank Paulson’s holey socks; Henry Kissinger stirring sweetener into his iced tea with the eraser end of his pencil.
The tragic figure of Pettit, who lost his ideals, his solid family life and, soon afterward, his life in a freak snowmobile accident, haunts Ward’s pages (she even tries to contact him in a séance), and her account of the horror of being a Lehman wife is so chilling that one wishes she’d given it more than a single chapter.
One wife recalls being so desperate to avoid a corporate hike that she faked a broken leg – only for another, more ambitious, wife to turn up with a real broken leg and announce her intention of completing the hike regardless.
A worker carries a box as she walks away from the office of the U.S. investment bank Lehman Brothers in London in September 2008
Another, while nursing a child with a seizure, was still expected to join a helicopter trip to inspect the site of a vast mansion that a senior Lehman’s executive was building. The head of global securities was told he must move to Asia, despite having a child with cystic fibrosis. These were the bellwethers of the change to come.
Ward tells her gripping story with energy. her shorthand characterisation – ‘self-described intellectual’, ‘tall, dark-haired banker’ – can seem glib, and her declamatory style, with its one-sentence paragraphs, while very much the house style of Vanity Fair to which Ward is a contributing editor, can read oddly on this side of the Atlantic.
But she has written a convincing book on a significant subject, and proved that patronising literary editor resoundingly wrong.