Monday, December 14, 2009
Was the Great Contraction caused by Warren Buffett not liking to use a cell phone?
The bankruptcy of Lehman Brothers is considered by many to have been the trigger of the world-wide economic collapse a year ago. The Wall Street Journal tells part of the story...
... Mr. Buffett flew to Edmonton, Canada, for a charity concert, headlined by Seal and Paul Anka, for families with children who need organ transplants.Messages delivered: Always check back to be sure all important messages left have been received. In our ever-changing world, don't rely on one generation using the next generation's technology -- if a doddering old multi-billionaire wants a fax, send a fax.
At about 6 p.m., he got a call at his hotel from Barclays PLC President Robert Diamond Jr. and an adviser, former Citigroup Inc. banker Michael Klein. The bankers were trying to broker a last-minute deal for Barclays to buy Lehman, which was facing bankruptcy.
U.K. regulators wouldn't approve such a large deal without shareholder approval, they told Mr. Buffett, which could take several days or even weeks. Regulators were worried that Lehman's trading partners would panic, refusing to do any more business with the bank. Would Mr. Buffett, for a fee, guarantee Lehman's trading positions until a shareholder vote?
Mr. Buffett needed to leave for the concert. He asked the bankers to send him a fax laying out deal terms. When he returned to his hotel around midnight, he didn't find any fax, so the deal went nowhere.
Mr. Klein had left a message on Mr. Buffett's cellphone. But Mr. Buffett says he doesn't use cellphones much, so he didn't even realize the message was there. He says he didn't get it until 10 months later, when his daughter, Susan Buffett, discovered it.
He declines to discuss what Mr. Klein's message was...
