How do you think former Lehman Brothers executives felt about the recently released report on the firm's failure that reveals, among other things, the firm used a weird accounting practice known as "Repo 105" to move $50 billion of toxic mortgage assets off its books in order to make its balance sheet look healthier? Embarrassed? Regretful? Are they thinking to themselves Wow, in retrospect, that does look pretty bad. What were we thinking? Not really, no. This morning's Post reports that former CEO Richard Fuld feels "vindicated" by the report, since Repo 105 is not illegal, but merely kind of skeazy. Others apparently feel the same way: "I'm like, whatever," a former managing director of Lehman London tells the Observer. "When I read this, I giggle a little bit, because $50 billion is a drop in the ocean."

The "yappers" who are shocked by it, he said, are merely unsophisticated "nonprofessionals" who are just looking for someone to point the finger at for the near-collapse of the financial system. But as amusing as it is, it's also kind of sad, really, said another executive, that people are just so stupid. They're like a bunch of animals. Like wild, ignorant bulls, starved into rage, stupidly crashing around and driving their horns into things just because they don't know what else to do.

"They just want to be mad and don’t know what they’re talking about and want to be outraged.” After an interview, that executive sent a follow-up email comparing the widespread furor over Lehman Brothers to the groupthink that sent America into Iraq after Sept. 11.

Only a few people are smart enough to understand *the truth* of the matter, which is that ultimately bankers are smarter and better than everyone else, always have been always will be. Not that it's fun to have this knowledge! Quite frankly, it is a terrible burden, because no matter how much you say it and how true it is, no one wants to believe you.

“It would be like telling people in 2005 that real estate prices are going to collapse,” the second said. “People wouldn’t believe you, no matter what you said.”

All they have is each other.

The Repo Men’s New Lehman Shrug [NYO]
Hope in the Fuld [NYP]