Bowyer: How Spitzer Lobotomized Lehman

Lehman Brothers, Bear Stearns, UBS, Merrill Lynch – what do these firms have in common? Yes, they have all weathered substantial turmoil due to the popping of the credit bubble. The woes range from accounting write-downs to management shake-ups and in one case annihilation.

But they have something else in common too. Each of these firms was forced by then Attorney General Eliot Spitzer to separate its research division from its trading ops.

In other words, Spitzer severed the connection between the brain stem and the hands and feet of some of our largest financial institutions. Would you be surprised to learn that this settlement, implemented in the beginning of 2003, coincides perfectly with the bubble, the bursting of which has led to such havoc? Me neither…

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Jerry Bowyer is chief economist at Benchmark Financial Network and makes regular appearances on CNBC. He also writes extensively on finance and history for the National Review, The Pittsburgh Post Gazette,, and The New York Sun. He can be emailed at