Mike Mayo Said to Buy Lehman Brothers Back in 2007

Nov 1, 2011
J. Webster
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This one kind of sticks out doesn’t it? Lehman Brothers a buy? Ouch. We can’t get them all right but wow, this one has to hurt, even now. I’m betting he tries to keep that on the down low.

Mike Mayo, the bank analyst at Credit Agricole Securities, and the man who said he was blocked from a Bank of America conference call when he ended up having the wrong number, has written a book, “Exile on Wall Street: One Analyst’s Fight to Save the Big Banks From Themselves.”

The book is about how the incentives are out of whack for bankers – they can nearly toppled the entire stock market and still end up getting bonuses. And huge bonuses at that. So yeah, he’s right on that one, but the call he made on Lehman Brothers in 2007 doesn’t look good at all. Why did they have to even bring it up…I’m trying to promote my book for goodness sake. I thought this interview wasn’t going to go into that…hold up, wait, don’t say it. Please. I’m begging you not to mention the Lehman call.

Though he was right many times, Mayo was criticized for missing one big call. He told investors to buy Lehman Brothers in 2007 and didn’t change his recommendation until the stock lost 70 percent of its value. Soon thereafter Lehman filed for bankruptcy. That led to a freeze in global lending and brought on the worst phase of the 2008 financial crisis.

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