Obtained by Dealbreaker, the letter concerns McGee's son, John Edward, who attends Houston's Kinkaid School and wanted to wear cheerleader costumes with his football friends in a pep rally skit, but was barred from performing due to "negative gender stereotyping."

Entitled "The Tipping Point," McGee's letter begins with a single violin playing the world's saddest melody, Ballad of the Rich White Guy Who Takes Himself Entirely Too Seriously:

I am writing to you today with a heavy heart but also with a strong sense of obligation. I am sad that things have gotten to the point they have at Kinkaid but feel I must speak up on behalf of the "silent majority" before the situation gets to a point of no return. ... I submit to you that the values, methods, beliefs and actions of the current Administration are not in synch [sic] with those of the majority ... So this letter is about much more than a cancelled [sic] pep rally—it's about taking back control of the Kinkaid School. [emphasis mine]

What follows is a three-part, bullet-pointed explanation of the new white man's burden: getting subversives fired from your kid's prep school. His rationale includes "the parent whisper circuit," "a gay female coach," and the time a "leftist" teacher made his son cry.

In the first section, entitled "The Catalyst (see attachment 1—my email to Don North the afternoon of the pep rally)," McGee lays out the myriad wrongs associated with barring his son from performing a funny dance in a dress in front of the school. The unjust harshing of John Ed's mellow may have been part of an elaborate vendetta perpetrated by student president Andrew Edison, who "had previous issues with football players" and—J'accuse!—once distributed a video of himself in drag, too:

The real instigator, though, is "The Teacher," Ms. Leslie Lovett, who apparently led the anti-skit battle. Lovett "is regularly ranked among the least desired teachers (at least on the parent 'whisper circuit')." Her class is a "leftist invective" of anti-i-banking propaganda. Also, she hates football and doesn't know her place:

Last year, she commented to an 11th grade history class including my son
that somehow both Lehman and Barclays made a bunch of money on the Lehman
bankruptcy, and that all investment bankers were "sleazeballs" and dishonest. With tears in his eyes, John Ed called her out in front of the class and said his dad worked for Lehman Brothers and had been working around the clock trying to save 11,000 jobs and that she had absolutely no idea what she was talking about.

...Last year, Ms. Lovett suggested that Homecoming should be at a girls' field hockey game rather than at a football game. She also complained that there were no women on the football team and poked her nose into the yearbook with nonsense issues that she has no business raising.

Look, Skip: I get that you're sad about Lehman. But when everyone knows you get a 7-figure paycheck every month, maybe don't complain about how emotionally difficult it was for you to steer 11,000 people's job losses, not to mention setting off global economic freefall and bankrupting entire nations. That said, the image of a Lehman exec's teenage son blinking back tears of confused rage, shame, and filial protectiveness makes for a somewhat fascinating tableau on the concept of "inheritance."

In his "Conclusion," McGee expands his disgust with Ms. Lovett to include all teachers who care about "diversity" and are total buzz kills:

What happened to our ability to laugh at ourselves and have fun? What happened to common sense and good judgment? Why is a married, heterosexual coach considered an oddity at Kinkaid? Why is a gay female coach telling high school girls on her team that she was disappointed in them for belonging to the spirit club (SOK) and that by doing so they are just pandering to the football team?

My personal favorite part of the letter is when McGee explains that the case of the party-pooped pep rally is actually the story of America:

The number of parents who have been talking about this particular pep rally is enormous. It is not because they care about football or pep rallies, it is because they have all encountered the same issues in some form or fashion. We have lost our way.

McGee closes by reminding everyone that his eldest daughter Katie "is now a senior at Princeton," so he knows a thing or two about kids and education. Today's battle, though, is not about Katie. Nor is it about John Ed. It's about the future: little Lizzy McGee, a wee eighth grader who walks into the light of tomorrow's daybreak with heavy feet, not because of lefty teachers and the P.C. police all up in her grill—but because her father, Hugh "Skip" McGee III, is really embarrassing

Read Skip's four-page masterpiece at Dealbreaker.
[DealBreaker] [The Daily Beast]

"I think they saw that the world was about to fall off it's axis" Sorkin told Charlie Rose last night, when asked why AIG was bailed out. The amount of time to make decisions to try and pull markets from the edge of economic armageddon was less than hours, it was mere moments. Conversations in hallways between meetings that would attempt to pull a careening market from falling off a cliff. They couldn't possibly have time to weigh the consequences of their actions. They were simply in triage mode. Crack the chest of the American economic system, resuscitate, and worry about fixing the broken ribcage later.

Shotgun marriages for Goldman Sachs and Morgan Stanley were sought after Lehman Brothers collapsed. Lehman accused JP Morgan of freezing $17 billion in cash and securities that belonged to the embattled firm on the night before it's failure.

A year and a half later there is not a single regulation on the books. Nothing has been done to prevent the same crooks from robbing the store, leaving markets in the same vulnerable position it was before the collapse. Sorkin describes how financial behemoths are "answering to the shareholder, not the community, and that is a huge issue. What's right for the community might not be right for the shareholder." Self regulation is still simply voluntary, and our government naive enough to think they won't try it again.

Guess what, they already are. Sorkin breaks the bad news "Many of those toxic assets are still on the market, and they're bidding them up even higher." Wonderful.

Sorkin describes "a great scene where Ben Bernake and Hank Paulson go into the White House, and President Bush tells them, at some point you're going to have to tell me how this happened."

We're still waiting.

A year later, we're looking at some of the characters of the fallen bank. And by we, it's, you know, the BBC, the New York Times, the Daily News (who has a surprisingly uplifting take), the Wall Street Journal, the Daily Telegraph, etc. But because the New York Times profile is exactly what you think it's going to be, we can go with that:

• There's Tom Ollquist, whose dreams of retiring and becoming a high school basketball coach have gone up in smoke, with the bank. "He now spends his days making cold calls and peddling bonds for a firm that few have ever heard of," the Times reports. Ollquist himself doesn't see it as so bad, as he does some serious Lady MacBeth-like handwringing:

  "I have blood on my hands," Mr. Ollquist acknowledges, fiddling with several bracelets he wears, each with its own sentimental story, before he quickly ticks off a list of other parties he thinks are even more culpable than salesmen like him for the meltdown: regulators, senior executives, rival firms and traders who believed that their elaborate computer algorithms insulated them from risk.

  
  

• Then there are the assholes who survived because they were smart enough to stash their cash in a mattress and leave it there: "The luckiest, like Ken Linton, a former Lehman trader, made enough money during the boom years to avoid having to think about their next paychecks. He spends his time flying jets."
  
  
• Women, of course, are screwed, or the Times lets the one post-Lehman interviewee they have project the idea as such: "...There are those like Leslee Gelber, who is out of work, professionally adrift, and fearful that Wall Street will bounce back without her."
  
  
• And then there's the fall-from-grace-into-blue-collar-America story we know all too well: "Jeff Schaefer, a former managing director, for instance, now owns a car wash and gas station in Florida." Oh, and this, the ultimate buck-passing of culpability: we did it due to the demand of our services. Which is akin to smoking crack because it needs to be smoked.

  "How do you blame us? A lot of what we did from an origination standpoint was based on investors' appetite," he says. "Do you think we would just go out and say, ‘I think we're going to do $100 million in no-doc loans?'"

So, people who've fallen from opulence into the struggles of your average American. They're sad in only one regard: the loss effect of someone who goes from having potentially tens of millions of dollars to millions of dollars carries a heavier psychological weight than the person who has nothing but money problems their entire life. Then again, not to throw populism in the mix, but (A) they're not in Darfur and (B) why isn't the Times profiling the janitors at Lehman who smiled at the assholes that would walk in every day, who proceeded to destroy a pension they worked double-digit years earning?

We know these stories, we've heard them too many times before, and they've been told in far more interesting ways already. There's one part of the Times piece that's particularly poignant, however, where the future of America's banking fuckups are found.

There's this:

He says he will steer his oldest son, who just left for college, away from a Wall Street career. The Street, he says, no longer offers the opportunities it once did.

and this:

He also still encourages his college-age son's goal of becoming a trader, a dream hatched in visits with his father to Lehman's mortgage desk in New York.

Guess which quote belongs to who: the guy who passes the buck doing the moral hand-wringing, or the guy just passing the buck, writing off his experiences as a result of the demand. No, really: just guess.

[Why not use our amazing new gallery format to gaze upon this real estate wonder? Try it. You'll like it. Or not. But either way, all our galleries are going to look like this starting tomorrow.]

Well, OK. These pictures aren't what the 16-room, 6,200 square foot, full-floor mansion (that Dick and his secret-shopping wife Kathy bought for $21 million back in 2007) looks like right now. Rather they are, as Curbed notes, pictures from high-toned broker Stribling, taken before the fabulous Fulds moved on up.

So gawp and be amazed at what financial chicanery and ineptitude on a magnitude rarely seen can afford you. For, you know, about two years.

And they didn't have any! But Dick Fuld could apparently be trusted with the stuff. The bankrupt investment bank owns enough yellowcake uranium to build a nuclear bomb.

Lehman acquired a total of 500,000 pounds of uranium before it went under, and it's been sitting on it ever since, waiting for uranium prices to go up before it can sell it off:

A supply of 500,000 pounds of yellowcake is just "slightly" less than the amount needed to make one bomb, or fuel one nuclear power reactor for a year, if the latest enrichment technologies are used, said Gennady Pshakin, an Obninsk, Russia-based nonproliferation expert.

Lehman, before filing for bankruptcy protection in September, actively traded commodities in the broker-dealer market and on exchanges such as the London Metal Exchange and the New York Mercantile Exchange. After filing, it began unloading holdings of everything, including greenhouse-gas credits, traders said. Uncertainty about the bank's plans for its uranium is helping to depress prices, Wong said.

The nuclear material, which is stored safely in Canada, is worth about $20 million at current prices. Lehman still has about $200 billion in unsecured liabilities left to pay, so selling it off would only net a drop in the bucket compared to the company's debts.

Which is why Dick Fuld is going to return to the company, build a bomb, hold a mid-size American city ransom, and play the comic-book villain he was born to be.

A background on the science: Men typically have longer ring fingers than index fingers, while women's fingers are even. But excess testosterone in utero has been found to lengthen ring fingers (and turn women lesbian). The ring-finger characteristic, in turn, has been linked to traits like success in hypercompetitive fields like Wall Street and professional sports. As you study the finger length of Washington's moneymen, new and old, the question to ask: Having gotten into this mess by people taking outsized risks, do we really want a bunch of damn-the-torpedoes macho men fixing it?

The old team:

Bush Treasury Secretary Hank Paulson's ring finger is freakishly long, which could explain his impulsive behavior with the government's bailout money.

Federal Reserve chair Ben Bernanke's ring finger is cocked here, but extended, he seems to fit the profile.

Neel Kashkari, the Ferrari-loving head of the Treasury bailout program, has a relatively normal hand.

The new team:
President-elect Barack Obama's index finger is almost as long as his ring finger, which fits with his reputation as a cool cat, but not his reputation as a studmuffin.

Paulson's replacement at Treasury, Tim Geithner, is an eerie match for his spidery fingers.

As Harvard's president, Obama economic advisor Larry Summers got in trouble for suggesting women were no good at science. But did his critics take into consideration his womanly hands?

The villain:
Called to account for the collapse of his firm, Lehman Brothers CEO Dick Fuld could invoke a novel defense: With that stubby ring finger, how could he possibly be a wild and crazy type who'd risk his entire company on bad mortgage-bond bets?

John Paulson
A hedge-fund manager who made $3.7 billion — yes, with a b — in 2008 by betting against the subprime mortgage market and the investment banks, like Lehman Brothers, that had profited from it. No relation to Treasury Secretary Hank Paulson. (PIty. Wouldn't it be juicy if he were?)

Peter Kraus
An investment banker who worked only a few days at Merrill Lynch before Bank of America bought the troubled brokerage house, but walked away with a $25 million bonus — at a time when the government was propping up Merrill and Bank of America with a taxpayer-funded bailout. He then bought a $37 million Park Avenue apartment we dubbed "the People's Palace." At his new job as CEO of AllianceBernstein, he's due for a $6 million bonus this year and $50 million in stock over five years.

Hugh "Skip" McGee III
McGee, the head of U.S. banking for Lehman, helped negotiate the sale in bankruptcy of Lehman's U.S. operations to Barclay's the British bank. In the process, he argued the place would fall apart without him, and scored a two-year, $50 million contract, even as Lehman laid off thousands. “I’m feeling nauseous right now even thinking about McGee’s deal," one fomer Lehman banker told the Daily Beast. Update: Peter Truell, Barclays' director of corporate communication, called to say the Beast's figure was "categorically false," but wouldn't tell me what McGee's actual compensation was. Could be higher, could be lower! Anyone care to fill us in?

Nauseous, or envious? These three are clearly brilliant bankers. Anyone who could make so much money in a dissolving marketplace probably deserves outsized pay. Which is why it's so funny to see Wall Street pinstripes complaining about their success. Their only sin: reserving their skills for their own pocketbooks.

Panic, by its nature, is an unreasonable fear that seizes one suddenly. But it comes after a series of shocks that drain confidence and stoke worries. Such was the Panic of '08: a torrent of news, bad turning to worse, which by its very ceaselessness made the hardiest souls cringe.

One can point fingers, document the bonus-driven greed of bankers, explain the overly complex financial vehicles which spun out of control. But trying to explain it all away misses the point — that sheer chaos overtook the world of money.

March

Bear Stearns reveals massive losses in two in-house hedge funds from securities linked to subprime mortgages. CNBC stock shouter Jim Cramer insists the company is fine. Six days later, JPMorgan Chase agrees to buy it for $2 a share, with the government guaranteeing $30 billion in losses.

July

Treasury Secretary Hank Paulson, in an effort to bolster the stock price of mortgage lenders Fannie Mae and Freddie Mac, gives their debt an explicit guarantee. His move backfired: Shareholders, seeing the prospect of a government takeover which would wipe them out, sell their shares.

September

Paulson announces that the government is taking over Fannie Mae and Freddie Mac. Lehman Brothers, unable to find a merger partner or negotiate a government bailout, files for bankruptcy. As laid-off Lehman employees walk out of the office with their possessions boxed up, two men make out in front of a CNN reporter's live camera.

AIG, which had guaranteed billions of dollars in financial contracts linked to subprime mortgages, teeters on the verge of bankruptcy before getting an $85 billion infusion from the government.

Merrill Lynch sells itself to Bank of America. Goldman Sachs and Morgan Stanley convert themselves into commercial banks. With that shift, there are no more investment banks left on Wall Street.

Banks stop lending to each other. Stocks plunge. Even the price of oil drops below $100 a barrel. Washington Mutual is seized by regulators and sold to JPMorgan Chase.

October

Congress passes a $700 billion rescue plan. Stocks continue to drop as economic figures show the economy was faltering even before Wall Street's collapse. Ferrari-loving ex-Goldman Sachs banker Neel Kashkari is hired to oversee it. The former rocket scientist rapidly proves too geeky for the job. The Dow falls below 10,000, then 9,000. Citigroup tries to buy Wachovia and fails; Wells Fargo buys Wachovia instead.

Layoff fears hit Silicon Valley: Partners at Sequoia Capital, the venture-capital firm which backed Apple, Google, Cisco, and Yahoo, among others, urge their companies to cut costs quickly. Dozens follow suit in pink-slipping employees.

November

The contagion spreads to Detroit: U.S.-based automakers report dreadful third-quarter sales. The chiefs of GM, Ford, and Chrysler fly to Washington to ask for a bailout — in private jets.

Government bailout genius Neel Kashkari appears to be stress eating.

Citigroup stock drops 60 percent in a week, prompting the government to invest $20 billion and guarantee a $306 billion portfolio of securities against losses.

The S&P 500 drops to 1997 levels, wiping out a decade-plus of gains.

On Black Friday, a group of shoppers break into a Wal-Mart before it opens and trample a worker. Holiday sales prove dismal.

December

Post-Thanksgiving layoffs sweep the New York media. Yahoo throws a series of holiday parties, and then lays off 1,500 employees. Bank of America CEO Ken Lewis suggests only idiots actually lend people money. Everyone resolves to pretty much give up until Barack Obama's inauguration.

In September, Lehman reported a $4 billion loss; JPMorgan Chase, its largest trading partner, demanded it put up $5 billion in collateral, and its stock started to tumble. Fuld had sworn to colleagues that he wouldn't sell the company. In a way, he got his wish. Having started sales talks far too late to save Lehman, Fuld found himself shut out of the endgame that saw Lehman file for bankruptcy. The Wall Street Journal has the details:

Desperate to avoid steering his 25,000-person company into bankruptcy proceedings, Mr. Fuld dialed the Charlotte, N.C., home of Bank of America Chairman Kenneth D. Lewis. His calls so far that weekend had gone unreturned. This time, Mr. Lewis's wife, Donna, again picked up, and told the boss of Lehman Brothers: If Mr. Lewis wanted to call back, he would call back.

Mr. Fuld paused, then apologized for bothering her. "I am so sorry," he said.

Ken Lewis never called him back, because he was in the midst of negotiating a $50 billion purchase of Lehman rival Merrill Lynch.

Executives at the British bank Barclays, another potential suitor, were talking about an acquisition with their counterparts at Lehman at the behest of U.S. officials. But Fuld was not welcome:

Lehman's talks with Barclays, meanwhile, were moving forward at the New York Fed, under the eye of government officials. "Shouldn't I be there?" Mr. Fuld said to Lehman President Mr. McDade and to attorney Rodgin Cohen of Sullivan & Cromwell LLP, a longtime adviser.

What Mr. Fuld appeared not to know was that some top government officials had instructed key Lehman representatives at the Fed building to keep Mr. Fuld away that weekend. The federal officials had explained that Mr. Fuld — not only Wall Street's longest-serving boss, but a director of the New York Fed — could be an unnecessary distraction and a lightning rod for criticism.

Late Sunday night, as Lehman's board met to debate whether the company should file for bankruptcy, SEC chairman Christopher Cox called in, but he had no helpful advice for Fuld or his fellow directors:

One of Mr. Fuld's assistants broke in to hand him a note: The SEC chairman wanted to address Lehman's board by speakerphone.

Mr. Cox, criticized for his allegedly minor role in the government's bailout of Bear Stearns, had been reluctant to call Lehman. The SEC chief finally called from the New York Fed, surrounded by several staffers, at the urging of Mr. Paulson, the Treasury secretary.

"This is serious," said Mr. Cox. "The board has a grave matter before it," he said.

John D. McComber, a former president of the Export-Import Bank and a Lehman director for 14 years, asked: "Are you directing us to authorize" a bankruptcy filing?

The SEC chief muted his phone. A minute later, he came back on the line. "You have a grave responsibility and you need to act accordingly," he replied.

As the meeting wrapped up around 10 p.m., Mr. Fuld, his suit jacket now off, leaned back in his chair. "I guess this is goodbye," he said. Lehman would file about four hours later.

(Photo by Karen Bleier/AFP/Getty Images)

Well, not really quiet, exactly. But these days Fuld, wife of villainous Lehman Brothers CEO Dick, does request a little white bag in which to carry her $2,225 cashmere throws out of the store, rather than the traditional look-at-me orange sacks the store is so known for. How demure! (Or, you know, shameful.) This is a whole new trend, The Daily Beast reports, with rich ladies all over town opting to, oh mercy God yes, still spend the money, but also to be classy about it and not flaunt they shit. It's called "secret shopping"! (And strangely, this report doesn't carry a byline, which means someone at TDB wants to keep their investigation a secret, too.)

"People are feeling guilty and they’re feeling confused and they’re feeling like they didn’t earn their money, especially within the financial community," said somebody from a marketing research house called the Luxury Institute. Aww, sad and confused and guilty, but not sad, confused, or guilty enough to stop spending money. It's like taking the hood ornament off your Mercedes and being proud of yourself.

It's too bad there isn't some way for Kathy Fuld, whose hubby did a really good job of putting many, many people out of work, to like, you know, give back or something. Someone should set up organizations through which people with money, especially folks who don't deserve it, like the Fulds, can give some of that money to people who need it more. Since nothing like that exists though, she'll just have to bury her sad guilty feelings under a mountain of three thousand dollar scarves and white paper bags.

1. "Profit" is kind of a scam.

Profit, as they say in the business, is the "bottom line."* But when every financial institution in America can follow a decade of unprecedented "profits" with the threat of Universal Abject Ruin, you have to conclude the whole damn "bottom line" is bullshit. Yesterday the NYT ran a story about an obscure unit of the insurance company AIG that generated shitloads of profits in the boom years. It generated shitloads of profits because it sold "credit default swaps." Credit-default swaps protect the principal paid on a bond in the case of a default. AIG made shitloads selling them in the boom years because a lot of other guys on Wall Street were making shitloads of money rolling up mortgages into bonds, and a guy from Morgan Stanley called up a guy at AIG named Joseph Cassano, told him about these rolled-up mortgage security deals, and asked if AIG would be interested in getting into the business of insuring these mortgages in much the same way AIG insured the houses said mortgages had been taken out to buy. Because Morgan Stanley would totally buy that insurance! Goldman Sachs would also be interested. A few crafty hedge fund guys were interested too. Later that "interest" would yield a profit bonanza for the guys who were smart enough to load up on them!

But first the profit bonanza's was AIG's. By 2005, this unit of AIG generated three and a quarter billion dollars revenue. And you know what the operating profit margin on that revenue was? Fucking 83%. Eighty-three percent. That is after they paid everyone's salary and Blackberry bills and sleeper-class airfares and five-star hotel rooms and for all their office supplies. AIG shared the wealth with employees more, of course. At the end of the day people who worked in that unit brought home between a third and 44% of revenue. Forty-four percent!!! That is literally unreal. Isn't the whole point of having an "insurance" company that you save money like that to have on hand for disaster? What sort of insurance company makes an record-breaking profit the same year they're on the hook over a billion dollars for a record-breaking natural disaster? (An insurance company with a freakishly profitable near-impossible-to-understand unit that does not report to any insurance regulators, for one!)

Well anyway, Goldman ended up putting as much as twenty billion dollars "on the line" with AIG's CDS-es. Twenty billion dollars is just over a billion dollars less than Goldman gave out in Christmas bonuses last year because, in stark contrast to most other banks on Wall Street, Goldman had been so smart and prudent and visionary and bought CDS-es early and booked record profits. In any case, now Goldman was worried about AIG. Goldman stock could plummet if AIG went under! And Goldman CEO Lloyd Blankfein must have told his old boss Hank Paulson that, because Hank invited Lloyd to be the only investment banker in attendance at a special meeting two weeks ago about the fate of AIG. Hank saved the insurer, and while they were at it they made some sort of arrangement for Goldman and Morgan — the guys who hatched this whole plan in AIG's head to begin with! — to become "holding companies" that would be protected by the FDIC. This effectively eliminated investment banking, and one hopes, some of the heady profit margins with which it was once synonymous.

2. Because the system — like CNBC itself! — is rigged to reward fear of commitment.

On CNBC this announcement was met with a lot of talk about how investment bank stocks would no longer "justify" their huge price-earnings ratios because, as real banks instead of specialized "investment" banks, they wouldn't be able to continue to take such big risks and generate the same grotesquely large profit margins they once did. There is something seriously warped about that mentality, though. If you watch CNBC you probably buy into the notion that profits are somehow "the bottom line," that the pursuit of profit makes everything more efficient, that profits create jobs and therefore salaries should more closely track the "bottom line," and if everything ran more "like a business" then employees would be more "accountable." Maybe you buy into this notion because it seems rational; maybe you buy into this notion because it takes so goddamn long at the DMV, but whatever the case, if you are watching CNBC now, it might dawn on you that they are too panicked trying to relay to you all this pressing urgent information to give you the real story, which is that all those assumptions about profits and the bottom line and accountability get turned completely on their heads when it you impose upon them the term limits of the fiscal year and everyone gets to cash out. Nowhere is our national fear of commitment more readily apparent than our willingness to allow Hank Paulson to pay no taxes on a half billion dollars in Goldman stock options to take a government job for three years because we are so wary of investing such faith in an entrenched bureaucrat, only to have him hit us up for a line of credit when all that fear of commitment results in a whopping expression of our collective fear of commitment.

3. "Demand" is also a construct.

A corollary to the "profit" construct is the "demand" construct. A story: the other day my friend the NYSE trader was ruminating on the absurdity that the defining buzzword of the subprime mortgage crisis was "tranche." Yeah, why does everyone pronounce it funny? I wondered. Because it means 'slice' in French, he told me. When you are selling bonds assembled from the foggy promises of ignorant unskilled people to pay ever-increasing fees to ensure their continued residences in shitty overpriced tract homes in eastern San Diego for thirty fucking years — unskilled people who at best work themselves in real estate — it helps to pretty up the sales pitch with pretty French verbiage.

On the front of today's Wall Street Journal "Marketplace" section are two stories on top of one another that form a neat little parable about the nature of demand. One is about how fast food chains like McDonald's and Panera Bread are worried about the credit crisis because Bank of America and other banks have suddenly tightened lending to people whose plan to make money depends on opening evermore McDonald's and Panera Bread locations. Just below this story is another story about how food makers like Campbell's, Kellogg and Kraft are excited about the credit crunch, because it enables them to make the pitch to American consumers to spend more money on "value" foodstuffs such as Frosted Flakes and condensed soup, and those kinds of foods have huge profit margins because of course they are actually a terrible value to consumers, but that doesn't matter as long as some ad agency is being paid eight figures to come up with a folksy campaign reminding Americans what great "value" they're getting. Whatever the outcome of the credit crunch, the only logical takeaway of the two stories goes, Americans will continue eating junk.

Which reminds me: I could go for a tranche of pizza right now!

But the point is, demand is highly manipulable, and we are the masters of manipulation. We've convinced ourselves that if a lower-profit margin-generating division of a company is sold to a Japanese company or simply discontinued it is because that division — and thus the country — is "moving up the value ladder." In the market's ceaseless quest to ascend the value ladder America has, of course, left behind such resilient, and also arguably valuable, industries as the manufacture of sophisticated computer chips and the construction of half-billion dollar oil tankers and probably soon car manufacture, for Asians to occupy themselves working on.

4. Good people will be punished. Good people are always punished. Just ask the Jews.

The Asian countries, of course, are concerned about this. Just because they work six day weeks in sweltering assembly lines doesn't mean they aren't addicted to our demand. China keeps living standards artificially low to maintain high employment, and they build up excess reserves they have to invest it in our iffy financial system, and Chinese people are aware of this, which is why the government faces angry internet retaliation back home when those investments suffer, as they did when Blackstone stock started crashing a few months back.

Which brings me to the Jews. As any Chinese person could tell you, the Jews have long been associated with a knack for making money. But many Jews also pursue relatively unprofitable jobs, like running for Congress. Much has been made of the need for Congress to vote on a bailout package before the Jewish holidays, because there are 43 Jews in Congress, almost all of them Democrats, and as Barney Frank so wryly noted last week "It's a well-known rule; God will only hear your prayers if you're in your congressional district." Barney can say that because he is of course himself Jewish. Anyway, this morning on CNBC Charlie Gasparino was trying desperately to hammer home to viewers that Barney Frank was largely to credit for getting the bailout package done in time to save Wall Street. (Uh, or not!?!) Other anchors kept cutting Charlie off. As Frank himself just told the Washington Post, "You don't get credit for a disaster averted." You also don't get credit for holding your nose and doing the politically unpopular thing and trying to avert disaster if you did not have the votes to avert disaster because everyone hates everyone. However, Barney Frank does get credit for being funny just now. Sigh.

5. And despite the protestations of contrarian pundits it is hard to believe some sort of disaster was/is not at hand.

Because in a story on the Lehman bankruptcy today, the Wall Street Journal noted that the Tuesday morning following the announcement the London Interbank offered rate, the interest rate at which banks offer one another overnight loans, the interest rate to which some $300 trillion in contracts are anchored, rose from 3.11% the day before to 6.44% and "even at those rates, banks were balking at lending to one another." The two guys who actually calculate the Libor have not been on CNBC to my knowledge, but I bet I can tell you what they were thinking when they went through their spreadsheets that day: "Holy Fuck." (And maybe also: "Why again do we securitize mortgages?
Isn't the one book read by everyone in the entire finance industry sort of about how that was a bad idea?) In any case, nothing on CNBC managed to be quite so startling as this story. Maybe because they've desensitized everyone with their incessant re-loop of Jim Cramer's prescient freakout clip.

*Oh, a lot of finance guys will distract you by calling other metrics the "bottom line" — EBITDA or profit "from continuing operations" or during the internet era ha ha, blah blah "eyeballs" — but all that is accounting bullshit, and the whole system is accounting bullshit.

On Saturday, September 13, the Trader took his 8-year-old son to his first Yankees game, against Tampa Bay. “My 8-year-old is asking me questions about the economy. And I’m thinking, You should really think about baseball,” the Trader said.

The Trader paid for great seats. They sat fieldside in the languid summer afternoon, six rows from the Yankees dugout. When the Yankees took the field, the Trader’s son erupted in cheers.

“Jeter! Jeter! Jeter!” he yelled, but the players jogged out to the field, with scarcely a glance toward the stands.

“Daddy, why doesn’t he answer?” the son asked.

And suddenly, the Trader boiled with anger. He had done his part, put in the sixteen-hour days to buy his kid the best seats in the stadium. Lehman, and the career he signed up for, was disappearing in front of his eyes. Yet the Yankees were losing, and Derek Jeter was still going to take home his $21 million, and he couldn’t even bother to show some gratitude. It was a fantasy world, out of touch.

“Those guys have the easiest job,” the Trader thought, “when it’s clear they don’t care. Fuck, in my next life I want to be a baseball player.”

Um, sorry, Trader, I think in the next life people like you get born in Yemen or something! Also, some professional athletes are trying to bail out the likes of your troubled financial systems, God knows why, you ungrateful ungrateful asshole.

The New York Times reports that between shots of hard liquor at the office yesterday, one Lehman employee shouted: “Are they going to take my BlackBerry? Come on, come get it.” Oh, they will. Research in Motion's BlackBerry sales were already disappointing in August. With Lehman expected to lay off most of its 29,000 Lehman employees, Merill Lynch and Bank of America expected to cut some 20,000, and plenty of Bear Stearns bankers still unemployed, September could be worse. Their ex-employers may not repossess the hardware, but RIM makes its steadiest profits from the recurring monthly service fees paid by businesses to push corporate email to the devices.

New York's most successful tech company is financial information provider Bloomberg, which somehow manages to charge companies thousands of dollars a year per subscription for access to the terminals that every Wall Street trader has on his or her desk. But with Lehman cutting 29,000 and Bank of America cutting another 20,000, Bloomberg's already low-volume business just got smaller at a time when it is facing redoubled competition from Thomson Reuters.

The benefit of a merger between the likes of Bank of America and Merrill Lynch is that the new company can combine their infrastructures and cut redundant costs. Unfortunately for IP telephony provider Cisco, it's one of those redundant costs. After flirting with Avaya for a couple of years, Merrill Lynch returned as a Cisco client in 2005. Last May, Cisco announced it would deploy 100,000 phones to Bank of America. When clients combine, vendors lose.

On February 27, 2007, Salesforce.com announced its largest deal ever, signing Merrill Lynch as a client and adding 25,000 new subscribers. How will Salesforce.com fare now Merrill and those 25,000 accounts are moving to Bank of America? At worst, Bank of America will insist Merill's brokers and their assistants use the Soffront CRM software the bank signed up for in March. At best, Salesforce.com will lose several thousand accounts as the new company seeks to reduce reduncancies and lays off as many as 20,000.

Investment bank Marlin and Associates helped Rupert Murdoch and News Corp's subsidiary Fox Interactive find MySpace, but otherwise it's been Lehman Brothers advisers bringing their favorite startup clients to the Murdoch empire. IGN Entertainment hired Lehman in the summer of 2005 and sold to Fox Interactive in the fall. Then in April 2007, photo-sharing site Photobucket hired the investment bank only to sell to Fox in May of the same year. Without Lehman Brothers, how will News Corp. grow on the Web?

"The financial services sector is the bellwether sector for the IT industry because of its amount of spend on IT," she said. "The demise of banks such as Lehman creates a sudden, very large reduction in revenue for the IT sector."

Which is terrible news for companies like Dell, which is already seeing "conservatism in IT spending in the U.S., which had extended into Western Europe and several countries in Asia." Could be good news for eBay, though, if equipment needs to be auctioned to cover some of those billions in write-downs. (Photo by AP/Mary Altaffer)

Also it is shaped like a penis. [Bloomberg]

it doesn't happen if your company has a sane and convincing leader who can go on CNBC and say, "here, look at our books! Our firm has such robust ratios of cash and hard tangible assets to covenants and other accounts payable that it really doesn't matter what our stock price does because, familiar as we are with the pussy nature of Wall Street confidence and the easily-distracted myopic ephemera-addled lemmings who govern such day-to-day fluctuations, we've seen to it to inoculate our business from such attacks by stockpiling enough hard currency and solid — but also liquid! — financial instruments that we can weather a crisis of confidence without having to undermine our case by begging them for money!" Lehman had no such leader. And it had no such assets!

One of the less-noted upshots of this whole Lehman mess is that maybe the Fed didn't give it the proverbial "Bear Hug" because it seemed like less of a victim of "scurrilous malicious rumors" than Bear Stearns did. And Bear had that pothead CEO! But Lehman seemed to have a victim complex about the rumors, as Andrew Ross Sorkin noted in July:

“I will hurt the shorts, and that is my goal,” Richard S. Fuld Jr. fumed.

It was April, and Mr. Fuld was blaming short sellers, one of the most maligned tribes on Wall Street, for spreading rumors about Lehman Brothers, the troubled investment bank he runs. Shorts bet against stocks, and Lehman, they were whispering, looked like the next Bear Stearns.

A Wall Street Journal story the next week portrayed him — as Cramer did the same week — as more concerned with shaming promulgators of bad rumors than figuring out the extent to which they were true:

Lehman Brothers Holdings Inc. CEO Richard Fuld Jr., whose firm's shares also have been battered, also has contacted Mr. Blankfein. "You're not going to like this conversation," Mr. Fuld told Mr. Blankfein, according to people familiar with their talk, but he was hearing "a lot of noise" about Goldman traders who allegedly spread negative rumors about Lehman. In recent months, Mr. Fuld has contacted traders he felt may have been bad-mouthing his stock, according to someone familiar with the matter. Spreading rumors one knows to be false with the intention of manipulating a public company's price is illegal.

The thing is, while Lehman seemed to have an army of friends willing to discredit the rumors at the risk of looking totally fucking ridiculous:

Absurd rumors can have legs, like the Lehman-Barclays one, which Richard Bove, an analyst at Ladenburg Thalmann, said “ranks up there with the moon is made out of green cheese in terms of its validity.”

(The specific rumor in question, and the subject of the Sorkin piece, was that Lehman might be acquired by Barclay's in a "take-under" whereby the British bank paid a discount to Lehman's stock price. Barclay's is currently in talks to do essentially that, with a whole lot less headache!)

But here's the big thing: Lehman had the nicest, most polite short-seller in David Einhorn. He made his short position public, for god sakes.

Very few people publicize their shorts, and when Einhorn did, it got Lehman’s attention. The conversation with Callan was to give her a chance to explain discrepancies he had uncovered between the firm’s latest financial filing and what had been discussed during its conference call about that filing… She was evidently not prepared for the complexity of Einhorn’s questions and tried to bluff her way through. “The conversation was reminiscent of the ones I had with Allied,” says Einhorn. “We had our questions, we were organized, but she was evasive, dishonest. Their explanations didn’t make any sense.”

Dear Lehman, Sarah Palin can do this because she is talking to people who don't have money. (And will have even less when she is through with them!) (Related: someone could use a better shade of lipstick!) In the meantime, the shorts and their self-hastening prophecies perform some of the last remaining regulatory functions on Wall Street, and in the aftermath of Enron I will never understand why they are so maligned. Doesn't Wall Street, like the post-9/11 Justice Department, need someone to poke away at its hubris, its secrecy and its destructive tendency to act as if it can impose its will all the time with impunity? Which is to say, the rumormongering shorts are so widely detested because they are like the media, only with money.

Short Interest Data: Lehman, AIG, Merrill [Seeking Alpha]
Pssst! Hear The Rumor Of The Day? [NYT]
Why Did David Einhorn Publicly Attack Lehman Brothers? [NYM]
Fear, Rumors Touched Off Fatal Run On Bear Stearns [WSJ]
The Man Comes Down On Rumormongering [Daily Intel]
Goldman Sachs Accused Of Rumormongering [NYM]