Reading this article titled "How Lehman Brothers got it's real estate fix", one gets a clearer sense of how companies can be caught up in the thrill of a chase, just like people. The New York Times piece chronicles the up and down cycle of Lehman's real estate infatuation, lead by 49-year old Mark Walsh:
It was wildly overleveraged. And the federal government made the fateful decision not to rescue Lehman from its mistakes. But when real estate overheated in the years before Lehman’s implosion, Mr. Walsh made billions of dollars in loans and equity investments that also ultimately helped bring down the bank."
There are compelling anecdotes that make up the story, including how premier Manhattan buildings like the Chrysler building were bought and sold at ever increasing prices. The whole piece needs to be read to get the full impact, but here's one that hits home:
"Developers also loved the fact that Mr. Walsh was willing to lend them enormous sums. In 1997, Barry Sternlicht, then the chief executive of Starwood Hotels and Resorts, needed $7 billion to buy ITT.
“I called up Mark and Goldman Sachs and said, ‘Would you be interested?’ ” he recalls. “Goldman said they were. They came to see us. But we needed to get it done really quickly. Mark said, ‘Yeah, we’ll do it.’ I said, ‘Really? You are going to do it yourselves?’ He said, ‘Yup.’ ”
“We paid a $20 million fee. I was never so happy paying a fee.” Mr. Fuld declined to be interviewed for this article."
And then one much later:
That's going to make one heck of an ending scene in the movie.
Fade to black.