Video: Munger on Goldman and Lehman Brothers

In a taped interview today with CNBC's Becky Quick, Munger says Lehman's Richard Fuld was guilty of "megalomania" and "isolation." Lehman's spectacular collapse in September of 2008 helped deepen the credit crisis.

Transcript below in case CNBC removes this video at some point in the future.



Munger: Dick Flud would not be, for me, an exemplar of the best that can exist in investment banking. I would say that of all the investment banks, of size, that was the one where the behavior was the worst and it came right from the top.

Quick: Worse than Bear Stearns?

Munger: Yes

Quick: Why?

Munger: Megalomania, envy driven, poor cognition, isolation and of course its an interesting example of corporate governance, because you didn't have to be very wise to see the place had the wrong leaders and they had a board that did exactly nothing to fix their problem.

Quick: Do you think there is any chance that Flud didn't know what repo 105 was?

Munger: I have no way of judging that. But there was so much he didn't know or deliberately ignored that... there is enough sin and folly there already you don't have to find the last item.

Quick: Is Loyd Blankenfeld an example of the most ethical standards on Wall Street?

Munger: You know, i don't personally know Loyd the way Warren does but i am favorably impressed with him. And, that is not to say that Goldman didn't participate with its industry in urging permissive rules for investment banking that I think were socially undesirable. It's just human nature to do that. But with that one qualification, yes, I admire Loyd Blankenfeld