Lehman Brothers: The $639 Billion Fall Shook the Global Economy скачать в хорошем качестве

Lehman Brothers: The $639 Billion Fall Shook the Global Economy

September 15, 2008. 1:45 AM. Lehman Brothers files for bankruptcy. $639 billion in assets. $619 billion in debt. The largest bankruptcy in American history. Within hours, the global financial system begins to unravel. This is the story of how a 158-year-old institution — one that survived the Civil War, two World Wars, and the Great Depression — destroyed itself in less than a year and nearly took the world economy with it. THE RISE: Founded in 1850 by three German immigrant brothers in Alabama as cotton merchants, Lehman Brothers moved to New York after the Civil War and became an investment bank. By 2000, it was the fourth-largest investment bank in America, employing 25,000 people across 40 countries. THE FATAL DECISION: After the dot-com crash, Lehman shifted from traditional investment banking to mortgage lending and mortgage-backed securities. By 2006, it had become one of the largest players in subprime mortgages. THE HOUSE OF CARDS: → $85 billion in mortgage-backed securities and CDOs by 2007 → Leverage ratio: 25:1 (for every $1 equity, $25 borrowed) → Mortgages included NINJA loans (No Income, No Job, No Assets) → Rating agencies gave AAA ratings to subprime garbage → When housing prices peaked in 2006 and started falling, the system began to collapse THE WARNINGS IGNORED: → Feb 2007: HSBC reports massive subprime losses → Apr 2007: New Century Financial, major subprime lender, bankrupts → Aug 2007: Bear Stearns hedge funds collapse → Late 2007: Lehman’s Chief Risk Officer warns exposure is too high — she is removed → Lehman reports record $4.2B profit in 2007 while hiding massive losses THE FALL: March 14, 2008: Bear Stearns rescued by Fed, $30B loan, JPMorgan buys for $10/share → Dick Fuld assumes Lehman will also be saved June 2008: Lehman announces $2.8B loss Sept 9, 2008: Lehman reports $3.9B loss, stock crashes 45% to $7.79 THE FINAL WEEKEND (Sept 12-15, 2008): Friday: Treasury Secretary Hank Paulson summons Wall Street CEOs. Message: “Government will NOT provide money. Wall Street must save Lehman.” Saturday: Bank of America walks away, buys Merrill Lynch instead. Barclays wants Lehman, but UK regulators refuse without government guarantee. Paulson refuses. Sunday: Lehman board votes for bankruptcy Monday 1:45 AM: Bankruptcy filed THE CONSEQUENCES: → Stock markets crash (Dow falls 504 points Monday, 1,000+ for the week) → Credit markets freeze completely → Sept 16: AIG rescued with $85B (government saves AIG but lets Lehman fail) → Money market funds break the buck, $300B withdrawn in days → Sept 18: Paulson/Bernanke request $700B TARP bailout from Congress → Great Recession begins: 8.7M jobs lost, unemployment hits 10%, $16T in household wealth destroyed THE AFTERMATH: → Dick Fuld earned $480M (2000–2008) and kept it while 25,000 employees lost jobs → Zero major bank executives went to prison → Surviving banks get bigger through acquisitions → JP Morgan, Bank of America, Wells Fargo, Citi now control $10T (40% of US bank assets) → Too-big-to-fail problem worse today than in 2008 WHY IT MATTERS TODAY: The system wasn’t fixed — it was rescued and made bigger. → Commercial real estate crisis now: $1.5T in loans maturing through 2026 → Leverage returning → Post-2008 regulations being weakened → Banks larger and more interconnected than ever Lehman Brothers wasn’t sacrificed to save the system. It was sacrificed to make a political point about moral hazard — and then the government spent $700B bailing out everyone else. The conditions that destroyed Lehman still exist. The next financial crisis is coming. Are we ready for it?