The main topic of the interview concerned the failure of Lehman Brothers.

According to
Mr. Buffett, the government indicated they didn’t have the authority to bail out Lehman. British
authorities said that such a large transaction would have required a shareholder vote. Warren
Buffett stated that he felt that Lehman should have been transferred in a more orderly fashion. A
lot more value was lost due to the chaotic nature of the way things ended with Lehman Brothers.
If Merrill Lynch wasn’t sold, Buffett speculates that it too would have failed at the same time
and potentially even caused more chaos in the markets.

Apparently, Mr. Buffett was contacted before Lehman Brothers declared bankruptcy about a
deal. The head of Barclay’s called Mr. Buffett the weekend before with a transaction to help
them acquire Lehman. The transaction was just too complicated for him to understand. Mr.
Buffett asked for more details, but never received a fax he requested with more details regarding
the transaction. If Mr. Buffett didn’t understand it, who knows how convoluted it must have
been.

Barclays, one of the leading banks in the UK could have acted as a savior of the banking
industry if it had bought Lehman. However, the lack of involvement of the U.S. government in
the financial transaction and the reluctance of authorities in London have made the history follow
another course.

In London, the Ministry of Finance, the Bank of England and the Financial Services Authority
found out that the U.S. government will not provide guarantees Lehman.

British authorities insisted that their counterparts in Washington were made clear that Barclays
could try to save Lehman if it was supported by the U.S. government.

If at first the CEOs and VPs were considered guilty of Lehman’s bankruptcy, like Richard
Fuld, who by his blind chase after profits failed to see or did not want to accept that his
institution was facing problems, several investigations show that rival JP Morgan, Goldman
Sachs and HSBC in Europe too have played an active role in the bankruptcy of the late giant.

U.S. authorities are investigating whether Goldman Sachs, the most influential American bank, is
in part responsible for Lehman’s downfall by short selling transactions.
Second, HSBC, too has been accused in the fall. Lehman is demanding collateral security for
billions of pounds which were transferred a few days before the bankruptcy. Pellerani Carlo,
executive officer of Lehman, said then that “HSBC did not allow us to continue our business.
They have put a gun to our heads.” Of the same practices are accused and JP Morgan and
Citigroup, according to a report commissioned by the U.S. justice system.

Another point of view, this time from inside, is presented in the book “A Colossal Failure of
Common Sense”, written by a former vice president at Lehman. This book shows the pressures
within the bank several months before the collapse.

The book written by Lawrence “Larry” McDonald presents a tense episode in spring 2008, when
Paulson met with Fuld. At that meeting was concerned with the situation Paulson Lehman and
Fuld tried to convince him that it was former Secretary of Treasury control of the situation and
knew that exposed risks. Director Lehman raised its head with superior experience bank, far
more rich experience than Paulson’s leadership at Goldman Sachs. Richard Fuld was at the head
of Lehman in 1994. He said then that will do well beyond the critical period. Several months
later, Lehman was allowed to enter into bankruptcy by the U.S. authorities, led by Henry
Paulson. It was former Treasury secretary Fold drove the discussion to act in this direction,
“McDonald ask