18 March 2010
Two years ago
It was also on March 18, 2008, that Lehman Brothers put out an optimistic press release, reporting quarterly earnings of $489 million, or 81 cents per share. Investors loved that number. Lehman's shares went up $14.74 that day, to close at $46.49. Michael Hecht, an analyst with Banc of America Securities, called the quarterly results "all in all solid."
The commonality? The bad news on the Bear side was overstated (the $2 a share the Bear shareholders thought they'd be getting two years ago today was, in few days later, quintupled -- still, a devastating loss, but $10 per share was a mite better than $2.)
The good news on the Lehman side was also overstated. Indeed, "overstated" is kind. Hence the now notorious Examiner's Report to the bankruptcy court.
That's our brief anniversary lesson on the oldest of subjects: the difference between reality and appearance.
Of course, two years ago this week we were also learning -- at least New Yorkers interested in the goings-on in Albany were learning, about the world's oldest profession, at least the high-level variant of that profession patronized by the Spitzers of the world.
Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.