So – now we know. The whole global financial crisis could have been averted. It was all down to one guy who doesn’t like using voicemail.
The general consensus, with a certain degree of hindsight, is that whilst the world’s financial powerhouses were in a pretty ropy state, they were scraping by. Indeed, most of them were making huge profits and were able to offset much of the so called bad NINJA loans with these profits and by making provisions in their balance sheets.
But then Lehman Bros, a huge American Investment Bank (i.e. it does not deal with the general public), found that it had overstretched itself and approached the American administration for help. The Government touted various bits of the bank around the global financial community having said that it would not put any US taxpayer’s money in itself. Barclays, the UK bank, were quite interested and were prepared to buy Lehman’s but wanted the US Government to guarantee some of its loans. The Government were prepared to discuss the situation, but as always, when lots of US money is involved, Warren Buffet, the billionaire investor was called in to try and broker a deal.
He had a few calls with Bob Diamond of Barclays and the situation reached the weekend. A few more calls between Diamond and Buffet would probably have resolved the outstanding issues. As the last call before the weekend came to an end, Buffet just happened to mention that if somebody wanted to contact him, they shouldn’t use his voicemail, they should persevere until they got him, but his remark went unheard. Over the weekend, Barclays tried to get Buffet several times but had to leave messages on his voicemail.
Needless to say, Buffet never picked up his voicemail, Barclays thought the deal was dead and Lehmans went belly up. The rest is history - with Lehmans going to the wall, every bank globally was at risk as they had some $800 billion of open transactions out in the market and if Lehmans couldn't close its positions, some banks would go bust.
Now I have known senior managers and directors who have refused to use voicemail and indeed have had their secretaries print off all of their e-mails because they refused to use a computer, but whilst missing a customer call or a client e-mail might be unprofessional, it didn’t have the lasting and dramatic effect of Mr Buffet’s refusal to dial a three-digit code on his mobile phone and pick up his messages.