Lehman

This in no way diminishes the pain that employees and stockholders are experiencing, but it's an interesting piece of perspective, courtesy of NY Mag, meant to dispel the notion that a venerable 158-year-old institution has collapsed and nothing will ever be the same. The current incarnation of LB dates back to 1994.

The original great Jewish bank on Wall Street was Kuhn Loeb, founded in 1867. Together with J.P. Morgan, it was a major conduit between European capital and American industry at the turn of the century. When railroad baron E. H. Harriman went up against Morgan (a man whose control of U.S. banking no one has come close to matching), it was Kuhn Loeb’s Jacob Schiff whom he turned to. Kuhn Loeb was also John D. Rockefeller’s banker. After World War II, the conventional list of the top Wall Street banks consisted of Morgan Stanley, Kuhn Loeb, and Dillon Read.

But not for long. Dillon Read shrank until it was eventually swallowed up by SG Warburg, which itself was consumed by the Swiss giant UBS. And Kuhn Loeb merged with a smaller firm called … Lehman Brothers in 1977. Together, they formed Lehman Brothers Kuhn Loeb.

Lehman Brothers Kuhn Loeb had a run of about seven years before it blew up in a tornado of internal rivalry. Its top bankers, Pete Peterson and Stephen Schwarzman, quit to form the mega private-equity fund Blackstone Group, and what was left of the once great Lehman Brothers Kuhn Loeb, short of capital, was sold for a song to American Express in 1984. American Express merged Lehman Brothers with two other brokerages it had acquired to form Shearson Lehman Hutton. (E.F. Hutton, another venerable Wall Street firm, got scooped up after a scandal, involving the interest on brokerage deposits, so tawdry that it makes the Superman III plot of stealing leftover parts of pennies look like true financial genius.) Then American Express changed direction, decided that credit cards weren’t such a bad business after all, sold off pieces of its mini-empire, and in 1994 spun off what was left into a new Lehman Brothers under the current CEO, Richard Fuld.