Monday, September 15, 2008

The Duffle Bag March

Paul Krugman highlights this from a Reuters report:

OK, this is weird:

At Lehman’s headquarters in midtown Manhattan, employees were coming and going throughout the day.

Some entered with what looked like empty duffel bags and gym bags and emerged an hour or so later with full bags
During the weekend of the Bear Stearns collapse, I was outside Bear Stearns headquarters and the same thing occurred there. It's brokers and traders fearing that they will be locked out of their offices, so they grab their client books and list of trading positions, so that when they move on to a new firm they have contact and portfolio information immediately at hand.

I'm not sure this isn't breaking some kind of NASDAQ or SEC regulation, but it is being done in full view of the regulators, especially in the Bear case, since SEC officials were part of the group meeting with Bears Stearns in the same offices!!

There are some individual brokers that have a long standing habit of putting erroneous phone numbers (or at least the worst number to reach a client at) on computer data, so that if they ever leave, it will be difficult for the old broker's firm to easily contact the client, while the broker sets operations at a new firm and transfers the client account over. It's the hand written contact info in the black books that are being hauled out that has the important contact info.  

-Robert Wenzel

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