Mo Haghbin, the head of strategic ETFs at ProShares, said he was managing the trading operations desk for the fixed-income hedge fund at Barclays Global Investors in 2008. He oversaw margin movement, and Lehman Brothers was one of his counterparties.
One day, payments from Lehman stopped coming in.
“Leading up to the weekend when Lehman collapsed, margin calls from our side weren’t being answered. We would send money out. We would ask for money in, and we wouldn’t get it,” he said. “I thought it must be an administrative error. But as we all know, it’s because there was a liquidity issue and they didn’t have the cash to deliver.”
Within a week, chaos broke out at Barclays and across the rest of Wall Street as Lehman Brothers went under.
“That weekend when everything happened, we were in the office at 4 am,” Haghbin said. “They had these ‘war rooms’ — really crisis rooms. We spent days in that room. People were buying extra shirts and clothes rather than going home. Everyone was working 24 hours a day.”
One thing in particular that Haghbin remembers about that time is how the corporate hierarchy broke down.
“It’s amazing how things change in terms of visibility and seniority. There was no junior person, senior person — everybody was working on things. Managing directors working with analysts to solve problems. Titles were out the door, hierarchy out the door, everyone just trying to solve a problem.”
