Banksters: The Heist
The word “banksters” is thrown around a fair bit these days. But most of the time it doesn’t seem quite right: yes, bankers have gotten a lot of money from the government, but for the most part they “stole it fair and square”: their arguments were made in public, and approved by elected officials, by regulatory bureaucrats, and by most of the press. This is not gangster-like behavior. It is not bankers’ fault that too few others saw through their arguments and refuted them.
But via Matt Levine at Dealbreaker comes a different sort of story. The innocently-seeming getting into a position where backstabbing would be possible (Morgan Stanley was the “clearing bank” for Lehman Brothers, handling its transactions; despite being a Wall Street giant, Lehman somehow couldn’t perform that function for itself) … the strike right at the moment of weakness (a demand for $6 billion in collateral in Lehman’s last day of existence, when it was madly trying to juggle creditors’ demands) … the selection of the most vulnerable point (certain people within Lehman who, despite not having the formal authority to transfer money to accounts where Morgan Stanley could siphon it off, neverthelss were technically able to do so) … the ruthless lethality (the $6 billion siphoned off, Lehman was immediately finished) … these were truly banksters pulling off a heist.
Making the situation even more familiar to criminals, the law wasn’t exactly in Morgan Stanley’s favor — thus the lawsuit from which I am getting these details. As Levine says, the document is unusually readable and interesting.