Too Big to Fail [14]
Since it was founded in 1850, Lehman Brothers has been a banker to an outsized share of twentieth-century business icons. Emanuel Lehman, who with his brothers, Henry and Mayer, emigrated from Bavaria in southern Germany just years earlier, had originally gone into business in Montgomery, Alabama, where they traded cotton, the country’s cash crop before the Civil War. Twenty years later the three brothers set up shop in Manhattan, where they helped establish the New York Cotton Exchange. In New York, Lehman quickly morphed from a trading house to an investment bank, helping finance start-ups such as Sears, Woolworth, Macy’s, and RCA. (The rough equivalent today would be the bank behind Apple, Google, Microsoft, and Intel, if such a bank existed.)
Fuld’s first year at the firm coincided with the death of its legendary senior partner, Emanuel’s grandson, Robert Lehman, who had seen it through the crash of 1929 and turned it into a financial powerhouse in post-Depression America. The aristocratic, Yale-educated Lehman had reigned during the firm’s glory years and was a banker to some of the biggest and most important U.S. corporations early in the American Century.
By the 1960s the firm’s advisory banking business was second only to that of Goldman Sachs. But because Robert Lehman and the other partners hated the fact that corporate clients would have to go to Goldman for their financing needs, Lehman decided to start its own commercial paper-trading operation, hiring Lewis Glucksman from the powerful Wall Street investment bank of A. G. Becker to run it.
When Fuld came on board, Glucksman’s trading operation was beginning to account for a majority of the profits at Lehman. The trading space was noisy and chaotic, with overflowing ashtrays, cups of tepid coffee, and papers piled on the tops of terminals and under the telephones. Glucksman had the windows blacked out in a bid to re-create a Las Vegas casino atmosphere, with traders focused only on the Quotron and Telerate machines that were standard-issue on Wall Street then. Phones were thrown; wastebaskets were kicked. And as in a Vegas casino, a miasma of cigarette smoke hung everywhere. It was a galaxy away from the genteel world of the bankers, but it was increasingly what Lehman Brothers was all about.
Although Fuld stands no more than five feet ten inches tall, he has an intimidating presence, a definite asset in the kill-or-be-killed environment that Glucksman fostered. He has jet-black hair and a broad, dramatically angular forehead that hoods dark, deep-set, almost morose eyes,. A fitness buff and a weightlifter, Fuld looked like someone you didn’t want to take on in a fight, and he had the intensity to match. With his gaze fixed on the green early-generation computer screens in front of him, he would grunt out his trades in staccato, rapid-fire succession.
Within Lehman, Fuld earned a reputation as a single-minded trader who took guff from no one. One day he approached the desk of the floor’s supervisor, Allan S. Kaplan (who would later become Lehman’s vice chairman), to have him sign a trade, which was then a responsibility of supervisors. A round-faced man, cigar always in hand, Kaplan was on the phone when Fuld appeared and deliberately ignored him. Fuld hovered, furrowing his remarkable brow and waving his trade in the air, signaling loudly that he was ready for Kaplan to do his bidding.
Kaplan, cupping the receiver with his hand, turned to the young trader, exasperated. “You always think you’re the most important,” he exploded. “That nothing else matters but your trades. I’m not going to sign your fucking trades until every paper is off my desk!”
“You promise?” Fuld said, tauntingly.
“Yes,” Kaplan said. “Then I’ll get to it.”
Leaning over, Fuld swept his arm across Kaplan’s desk with a violent twist, sending dozens of papers flying across the office. Before some of them even landed, Fuld said, firmly but not loudly: “Will you sign it now?”
By this time, Fuld was known within the firm—and increasingly outside of it—as “The Gorilla,”