Lehman Brothers, the Wall Street investment bank, is toast -- and the financial press thinks it is the apocalypse. "Through all the financial catastrophes of the past 160 years, Lehman Brothers survived and thrived," writes business guy Derek deClouet in the Report on Business today.
Actually, not quite 160 years. Journalist Ken Auletta wrote a terrific business history called Greed and Glory on Wall Street: The Fall of the House of Lehman, all about Lehman Brothers' financial collapse and forced sale to American Express in 1984. At that time the takeover was said to mark the end of independent investment banks. But in 1994 American Express lost interest in banking and brokerage, and it revived the Lehman Brothers label and spun it off very profitably as an independent enterprise.
The firm that died on Sunday was actually, ah, all of fourteen years old.
The financial commentators are once more talking about the end of independent investment banks. But the Lehman Brothers and Merrill Lynch brands could well be revived in the next spurt of irrational exuberance, as Lehman Brothers was in 1994.
Still, the Lehman brothers who founded the original firm in 1850 were kind of interesting. They were a couple of little Jewish immigrant guys, Emmanuel and Mayer, who began as cotton brokers in the Confederate South and then prospered on Wall Street, doing innovative financial deals with similar guys with names like Goldman and Sachs and Loeb.
Not the sort of thing that ever happened on Bay Street.
