Fifth Estate - Lehman and the Canadian Connection

This story is compelling from a number of perspectives. The fact that an institution, having survived some many other calamitous events throughout its history might be the most profound. But in this view, the Canadian connection and the timing of that event is even more ruinous to my view of the management of our financial system. Brian Chisick, a Vancouver Canadian was at the core of the start to this road to ruin. His company, First Alliance Mortgage was already in court over their involvement in 1992. Many years before the ultimate failure of the idea of subprime mortgages. Sure he was supposedly ruined in the process, but in my view, not nearly enough to account for the real damage and mayhem that were inflicted and experienced by the countless thousands that followed. And the plan that Mr. Chizek put together included a 27 page manual for their sales force. It was a careful orchestration, a highly refined con game. Certainly there are many other involved in this subprime debacle, Dick Fuld and his troops, Angelo Mozillo and the Countrywide crew, and Washington Mutual, and the list could go on and on. This program of CBC's Fifth Estate is a very worthwhile watch.

House of Cards

JANUARY 15, 2010

The collapse of a financial giant and its Canadian connection.
When Lehman Brothers collapsed in September 2008, heralding the onset of the latest recession, the focus was on the greed and vanity of the Americans who ran the doomed investment giant. But, the fifth estate has uncovered the Canadian connection to that collapse, in House of Cards. 
His name: Brian Chisick. A Grade 10 dropout from Vancouver who moved to California, Chisick pioneered a predatory type of lending there. He made his first fortune preying on borrowers with hidden upfront fees and sky-high interest rates. Wall Street behemoths like Lehman Brothers bankrolled Chisick and learned that they could sell bad loans to millions of people. This inspired a pandemic of self-delusion and excess that brought on an economic crisis unmatched since the Great Depression, 80 years ago.
House of Cards is also the story of one of Wall Street’s “masters of the universe”, Lehman Brothers’ chairman and CEO Richard Fuld. Once an icon of rugged capitalism, Fuld eventually became a symbol of vanity and greed. His company’s lending practices would eventually cause the collapse of the storied financial institution Lehman Brothers. In its ruins lay the reputations of the proud and powerful and, more significantly, the lives of millions of ordinary people who put their trust, and their life savings, in Lehman Brothers.
About the collapse of Lehman Brothers, one interview subject says: “They’ll be talking about it for a hundred years. It was the day capitalism changed.”