Lehman Brothers Collapse
Market Context & Analysis
Starting Price: $7.79Lehman Brothers, 158-year-old investment bank, collapses in largest bankruptcy in US history. Subprime mortgage exposure devastating. Government refuses bailout unlike Bear Stearns. This triggers global financial crisis panic. Credit markets freeze. Stock market crashes.
Housing bubble bursting. Credit crisis spreading. Unemployment rising. Recession deepening. Financial system on brink of collapse.
Treasury Secretary Paulson refuses Lehman bailout after Bear Stearns. Political backlash against Wall Street. TARP bailout follows Lehman collapse. Presidential election amid crisis.
Lehman heavily exposed to subprime mortgages. Attempts to raise capital fail. Potential buyers walk away. Dick Fuld CEO refuses to sell at realistic prices. Bankruptcy filing September 15, 2008.
Panic across financial system. Credit markets freeze. Counterparty risk paralyzes lending. Flight to quality. Systemic crisis spreading globally.
- Subprime mortgage exposure catastrophic
- Leverage of 30:1 amplifies losses
- Government refuses bailout
- No buyer willing to acquire
- Credit markets freezing—liquidity crisis
- Counterparty fears spreading systemically
- Largest bankruptcy in US history