Who's baulking now?

September has been a very dark month for financial markets. The collapse of the US investment bank Lehman Brothers, a 158-year-old institution is, in Alan Greenspan’s words, a "once-in-a-century" type of financial crisis.

Just a year ago, the bank was valued at nearly $50 billion and was the largest trader on the London Stock Exchange. The fall was brutally fast.

The Fed came to the rescue of Bear Stearns earlier this year, but has decided not to help out Lehman Brothers. Bear Stearns was simply too big to fail, we were told. But isn't — wasn't — Lehman a bigger bank than Bear Stearns? If it had been the first bank to go belly up, it might have been saved. But there's probably a limit on how much a government can set asidefor such rescues — especially in an election year.

Lehman Brothers, like many investment banks, had a bonus culture that encouraged traders to focus on short-term profits, and is most definitely partly to blame for the current financial crisis. There are a lot of people carrying cardboard boxes out of Lehman Brother's offices this week. (Possibly 5,000 in London alone.) Many of them are pointing an accusatory finger at their CEO, Richard Fuld.

Fuld, some claim, could have sold assets in the bank, even as recently as this month. Fuld baulked at such offers to buy the bank, saying they were too low. In the end, the investors are now baulking at Lehman Brothers.

Wise Words: baulk at something

If you baulk at something, you don't want to accept it. The verb baulk (US: balk) is also used to describe how a horse stubbornly refuses to move where you want it to, so, when I use baulk to talk about a person, I often think of that person as a stubborn horse.

Who do you know who's baulked at an opportunity or good idea?