"A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers."

On January 20th , I attended a speech from Lawrence McDonald, former Vice-President of Distressed Debt and Convertible Securities Trading at Lehman Brothers. He stopped by to discuss his most recent book, “A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers.” Unfortunately, I was unable to stay for the entire presentation, however, he did not waist time to get to his point across. He felt that it was important for him to share his experience and help the younger audience, who are in the pursuit of a career similar to his, to be knowledgeable in finance. Furthermore, to be able to make ethical decisions based off what he saw going on inside the company's “walls.”

Prior to Lehman Brothers file for Bankruptcy in September of '09, McDonald explains the reasons leading to the company's fall. He begins his story by mentioning the idea of always having a solution to a problem. He states that “when you get into an investment your most fundamental idea while doing this is to have an exit strategy” The Lehman Brothers did not have this. He described the company being runned as a “reckless monarchy” headed by Dick Fuld, Chairman and CEO of the company since 1994. Chief risk officers were “silenced” or fired for their awareness of the problems that company will soon face. This included ultra-liquid AAA-rated securities that went from investment grade to junk overnight. In addition, McDonald states, “ how to never fund long-term investments with short-term money. Besides the fact that people were being fired by top authorities, there was a growing disconnect from traders, bankers and management.

One of the biggest problems, was that “top management did not have any knowledge on finance and banking” and that they were unfamiliar with 21st Century financial problems. The company began taking on more risks and the leverage was at 44:1. While all this was going on, no one did anything about it! One of his last statement he made before my departure was “There will be more abuse in power if they happen to be in power for too long.”

I was moved by his presentation providing me with essential information that I would have never thought before. As well, he gave me very useful advice as to how I should go about opening my own doors to success. He mentioned that we should put ourselves in the positions where we can be inside of the company, even if it requires to “finding a back door.” He stressed out internships should be a college students biggest concern in order to pursue a career in corporate world. I look forward to reading his book one day.

Locke in the News

The New York Times posted an article written by Hiroko Tabuchi called "IPad? That's So 2002, Fujitsu Says." Mr. Tabuchi talks about after the much anticipated release of Apple's IPad, the company may potentially be in a trademark dispute with Fujitsu, a Japan based company claiming the naming rights of “IPad” several years ago. The technology from Fujitsu, is a mobile, touchscreen device which allows shopping clerks to check prices, the status of current inventory information and closing sales. In addition, there are features similar to Apple's IPad such as wi-fi and telephone usage over the Internet.

However, Apple will have until next month before it decides to go against Fujitsu in the naming rights of "IPad." Basically, Apple would need to prove that their IPad won't be confused with Fujitsu's IPad. If so, they would have to get rid of the IPad name or have to "buy out the rights of the IPad name." It is said that other international companies used the same name for their own products, such as one Canadian lingerie company which markets ipadded bras.

So where does John Locke stand according to this article? I believe this argument can go both ways. According to Locke, his idea of Natural Law of Property is, "an individual owns their own body, we therefore own our own labor. Therefore whoever instills their labor into this property has rightful ownership." Since, Fujitsu claimed to have naming rights of the name "IPad" since 2003, it would make sense that they're are entitle to it. In this case, it goes to show that any corporation, such as Apple can just steal a registered trademark from another company and then buy out the rights of the name from them. But let's say, Apple actually didn't TRY to steal someone else's name, couldn't they have every right to claim it as their own "IPad" in Locke's perspective? Once again, Locke does say, "whoever instills their labor into this property has rightful ownership." Apple did not replicate the device Fujitsu has.They made their own unique computer-tablet with more unique and different features from that of Fujitsu's. Could this just be a way for Fujitsu to make some money off of this? It's just a thought. But if so, I think this raises another concern, which is anyone can just go about registering trademark names and then selling them to someone in order to make a profit.

Aristotle in the News.

On December 22nd, the Washington Post published an article about how one politcial figure, Republican National Committee chairman Michael Steele, has been said to have been collecting money by making appearences and giving speeches. Throughout his career, he's been on all corners of the country from coporate boards to colleges, giving paid speeches. In addition to charging for a speech, he also collects a yearly salary of more than 220K. In one interview from Richard Bond, former chairman of the party in the early 90's stated that during his time as chairman, he "didn't take a dime." In the light of this controversey, former chairman, Jim Gilman, has came to Mr. Steele's defense stating that "it's not uncommon for people to have outside employment as well as being paid as national chairman."

From time and time again, we have become more aware of political figures who are just as bad as any CEO in a company. Their means; make more money.
He is “improperly” using his time for giving speeches, which are suppose to be free, not paid. Although one may argue, that this is a means of getting extra income on the side. However, the guy makes more then enough to be satisfied. Addition to that, dont forget, he is the Republican National Committee chairman!

Now, Aristotle's theory on the Art of Acquisition is to acquire as much income as needed in order to acquire the Good life. To be focus on collecting as much money as possible isnt the way, but instead to acquire what is neccesary and needed to live wealthy. For Mr. Steele in this situation, to me, he is being greedy and inconderate. In the article, it says that Mr. Steele makes a little over 220K a year in salary. In additon to that, he charges $8,000 to give his speeches. The guy clearly makes enough money to live the GOOD LIFE. But no, instead, he rather focus on making more money to what he already has obtained.