Sideways: Dick Fuld – my part in his downfall
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Sideways: Dick Fuld – my part in his downfall

As the 10th anniversary of the failure of Lehman Brothers arrives, I have been asked to share my reminiscences of when I realized a global credit crisis was looming and why so many senior financial figures ignored my warnings.


In the early summer of 2007 I was by the pool at the Hotel Arts in Barcelona, recovering from an all-night session at the casino after a securitization conference, when none other than JPMorgan investment bank head Bill Winters came into view.

“Bill!” I said. “What are you doing here? Surely you aren’t mixing with the nerds who put together the synthetic collateralized debt obligations that will soon undermine the global economy?”

Winters smiled ruefully. “I’m afraid so. Jamie Dimon personally told me to increase our share of CDO revenues and claims I’m spending too much time in the London office having new suits fitted,” he said. 

“Bill, old friend,” I replied. “Mark my words: 15 months from now – probably at the end of the second week of September 2008 – this whole thing will blow up. If you can get JPMorgan out of CDOs in time, Jamie Dimon will thank you in the end. Or he might not, knowing Jamie, but you should still cut your exposure.”

A young Deutsche Bank trader who had attended the conference was listening to our conversation.

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