Two Wall Street Titans on the Meltdown

Two of Wall Street’s surviving CEOs—Stephen Schwarzman of The Blackstone Group and Bruce Wasserstein of Lazard—met for a breakfast panel hosted by Fortune this morning and offered some valuable insight into the economic crisis. Among the conversation’s gems was a debate over the value of mark-to-market accounting, the process by which assets are assigned values based on the market price. Schwarzmann argued that banks’ current troubles are rooted in their inability to sell complicated securities, which forces them to mark their assets at low prices and therefore exacerbate losses. Wasserstein, however, said the alternative was “fiction writing,” and that many of these assets were not going to recover anyway. Also mentioned was Schwarzman’s lavish birthday party that featured Rod Stewart and Patti LaBelle and was considered by many as symbolic of Wall Street excess. “It was a great party,” Wasserstein said.