Free The Devil's Casino by Vicky Ward Page A

Fannie Mae and Freddie Mac—and Steven Carlson, a managing director, to Fuld’s ninth-floor office. They had to explain why Lehman needed to buy mortgage assets from government-owned asset management company Resolution Trust Corporation ( RTC ) stock, which was responsible for liquidating the assets of insolvent savings and loans (S&Ls) in the 1980s crisis. According to someone in the room, Carlson said to Fuld: “We’ve got to get staff on this. We’ve got to get full-time coverage on this. You’ve got to spend some money to make money that is going to become available, in terms of cheap assets to buy.” He felt it would be the buying opportunity of the decade because these assets were going to be dumped on the market and be cheap.
    Fuld’s response was typically curt: “How much money do I need to spend?”
    “We think it’s three or four million dollars for these kinds of things,” Carlson said.
    Fuld rushed to the point: “How much money are we going to get?”
    Carlson and Dorfman just looked at each other. “A lot. You know,
lots
, ” which wasn’t specific enough for Fuld, who said again, “How much money are you going to make?”
    “Dick, it’s an opportunity—lots.”
    Fuld just growled, “Get the fuck out of my office.” And before they could say anything else, he shouted: “Get the fuck out!”
    The next day they came back, and Fuld didn’t even look up from his desk. “How much money are we going to make?”
    “Fifteen million.”
    “Okay,” Fuld said. “Spend the money.”
    Fuld was a classic capital markets thinker in that he valued a simple figure over detailed explanations. He wanted things easy. He didn’t want to be bogged down with the minutiae of data reasoning; that was a job for other people, Pettit for instance. Pettit was there to corral the staff, to keep it in line, to do whatever he could to inspire them to do whatever they had to do to get Fuld the number he wanted. Fuld was there for the big decisions. In his mind, this didn’t make him a tyrant; rather, it made him efficient. And while Pettit was his deputy, he didn’t need to evolve because Pettit had his back on the small stuff.
    But Fuld also knew that if the grand plans for LCPI were to become real, then he’d have to change. He’d have to be a better manager. He’d have to learn to delegate; to be a people person. He couldn’t really be “the gorilla.”
    He’ d been given the nickname because of his habit of grunting, his prominent forehead, and his fondness for expletives. To further the myth, he kept a stuffed toy gorilla in his office on top of a basketball hoop, but it was all theater to mask his social anxieties.
    He secretly started working on his weaknesses.
    He was inarticulate and introverted. He was a solid trader, but knew next to nothing about investment banking, despite having put himself through New York University’s prestigious Stern School of Business at night during his early years at Lehman.
    So he began to carefully study the men around him, as he had with Glucksman, who had qualities he admired but had also lacked qualities Fuld lacked.
    For example, Fuld was nowhere near as good a negotiator as 64-year-old Ronald L. Gallatin, an intellectually nimble partner who created many of Lehman’s financial products during the years of Slamex. Gallatin was once described as a “man who could juggle so many balls that only he could keep track of them all.” Fuld paid close attention to what made him effective. “Dick listened carefully to everything Gallatin said. In fact, he listened carefully to everything everyone said. He absorbed far more than people realized,” said someone familiar with the situation.
    Fuld got a brutally blunt reminder of how much he still had to learn when he was joined at the helm by the man appointed in 1990 to run Shearson Lehman’s investment banking division while Fuld ran fixed income. That man was J. Tomlinson Hill—otherwise known as Tom