On the financial crisis, from my time at Lehman and in China

It didn’t really hit me that this financial crisis was bad until I got an email from the president of ING Direct, where I have an online savings account, telling me not to panic.  I’m still digesting the news, the policies, the politics, and the implications, but in the meantime, I thought I’d share my perspective from the two places I’ve been which are relevant to this story:  the trading floor of Lehman Brothers, where I sold derivates several years ago to US corporations looking to manage currency risk from 2002 to 2006, and China, where I spent a year in Chengdu, China’s equivilant of middle America, before coming to Beijing where I am now a business strategy consultant for US multinationals.   The story I lay out below is based on my personal experience, and obviously misses a lot of pieces of this immensly complex puzzle. 
But from where I sit now and where I’ve sat, I see two fundamental reasons for why the financial world has unravelled:  (a) that banks and the financial markets are run by actual human beings, and (b) that Chinese people don’t have the financial protection that would allow them to feel comfortable spending their savings.  If I’m right, this mess may self-correct itself as talented financial managers leave the rubble of New York to help build up China’s consumer financial network — but before we get there, first here’s how we got here.
Disclaimer:  I haven’t worked at Lehman Brothers in several years, was never involved in management or oversight, and cannot in any way comment on the financial strength of that company.  In no way, shape or form should this Aabservation be seen as any sort of investment recommendation.

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(Repost) Bullet Points on Working in Lehman Brothers FX

The following is a “dispatch” I wrote for my friend Catherine Price’s e-zine, Salt, back in 2004, after having worked at Lehman Brothers on the Corporate Foreign Exchange (FX) desk for 2 years.  It gives a brief sense of what it’s like to work there, and thougt you might be interested: 

Originally posted in August 2004 on Saltmag:
With apologies that my reflecting pool is never still enough to see
clearly what we look like on the trading floor, I am sending you a
dispatch written in the only language that can survive the choppy
waters of short-attention-spanned corporate America — bullet points:

* My job at my investment bank (the “Firm”) is to help multinational
corporations manage their foreign currency risks Continue reading

24 Questions

This week the Beijing 2008 Olympics-Paralympics period ended, and my
former employer, Lehman Brothers, filed for bankruptcy.  The
historical implications of these two events will no doubt be written
up in history books — but they are topics for a separate

More importantly, when I look over the top of the newspapers, I see a
lot of you going through significant personal change right now, in
jobs, geography, love and life.  So here are 24 questions which I once
drummed up for a friend who was trying to figure out what to do next
as well.  Thought it might be helpful:
24 Questions

1) What will I regret not doing right now?
2) What can I only do now and no other time?
3) A well-respected investor once said his secret to success was
following a simple rule: “when something is working, do more of it;
when it stops working, stop.”  So: is this working?
4) Where have you been where you liked yourself the most?  Where you
liked who [your name here] represented?
5) What would you do for fun; what do you get sucked into?
6) What opportunities have crossed your path that you have overlooked
in the past few months?
7) Who are you mentors?
8) A friend once said, “Liz, my goal in life is to be an interesting
person.”  Is being interesting important to you?
9) Are achievements important to you? (Honestly, now…)
10) Whom do you love?
11) Who brings out the best in you?
12) When things or people felt wrong in the past, or feel wrong now,
what about it feels wrong?
13) Are you ambitious?
14) Do you care what other people think about you?
15) If so, whose opinion do you care about, and how can you please them?
16) What skills or talents do you have that you would definitely want
to use in whatever job etc you’d be doing next?
17) What skills and talents do you wish you could develop?
18) What jobs etc use and develop those skills/talents?
19) Do you want to make money?
20) How much? Yes, in dollars (or renminbi, pounds or whatever)
21) Whom do you admire?  What about that person do you admire?
22) How did that person (or I guess people) get to where they are,
become the people they became?
23) What are you favorite foods?  (I’m serious, I simply couldn’t live
in a place without ready access to bananas.)
24) Do you want to settle down, or uproot? (Actually maybe that’s the
first question to ask?)

Safe travels, and drop me a line to let me know how and where you are.

Yours, Liz