Wednesday 16 November 2016

Lehman Brother‘s failure

By watching the last days of Lehman Brothers, the film is about the “last days of Lehman Brothers” for three days from Friday, September 12 to Sunday, September 14, 2008. The main story is that US treasury Secretary Hank Paulson called several of America’s largest investment bank CEOs to come up with an idea to save Lehman Brothers in three days. While the Lehman Brothers CEO Dick Fuld was dying to try to keep the bank, however, Lehman Brothers was unable to escape the fate of collapse.

Facing the company’s risk in 2007 and 2008, this is really bad enough that Fuld and his flattering colleagues face repeated warnings, but always been blinded by his arrogance eyes. The reason for the outbreak of the crisis is the Wall Street investment bankers every day rash behavior. But we will find it very strange, why the Fed and the Ministry of Finance does not save Lehman Brothers, when Lehman Brothers was in a crisis, due to their company had too much junk assets, no giants wanted to take acquisition, and also Barclays were cancelled because of the UK’s board resolution institution. Investment bank is not owned by the Federal Reserve, Lehman Brothers cannot get the Fed’s direct funds. Although the Fed has provided that, in exceptional circumstances, if there is proof that a bank is unable to find borrowers, the Fed can help the bank register capital, but in advance is the bank to have sufficient assets to mortgage, it is clear that Lehman's garbage assets do not meet this requirement.

On 2008 September 14, Sunday evening, Lehman Brothers filed for bankruptcy, the one who hundred and fifty years of history of Wall Street investment bank collapsed , which is widely regarded as the turning point of financial tsunami in 2008, this is the biggest bankruptcy in US history, caused a great panic and the international monetary market freeze.


In the final, when always conceit of Dick Fuld finally accept the irrevocable reality, makes me think of what ishikawa tetsuya said in “ How I under Caused the credit crunch” : the real victim is not me, but who was not involved in the gamble but ordinary being who not fear suffer.      

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