By: Christina Dove
It has been one year since Lehman Brothers went bankrupt and started the chain of several huge players in the financial world following in their footsteps and also filing for bankruptcy. It was a crazy time for Wall Street when many companies were losing billions of dollars due to bad mortgage finance and bad real estate investments. These events could have been foreseen by many different people in the financial world, as more and more risk was being diversified and bought up by large investment banks.
The main lesson that can be learned from the debacle of not only Lehman Brothers, but also from many other financial companies is that the problem does not lie in one specific area. For instance, we can not place the sole blame on sub-prime mortgages. The root of the problem lies in all of the banks and lenders, having too much confidence and creating too large of a credit surge that ultimately put America's financial system out of balance and made us think that our country was in much better shape than what was revealed underneath. The mistake of Lehman Brothers as with several other companies was that they thought that they were invinsible and that buying up all of these bad mortgages and selling them would never erupt into such a huge collapse of the economy.
It is going to take a lot of time for the economy to heal itself from this financial crisis and the mindset of America must be adjusted to living within your means and not trying to get something that you are not entitled to and cannot afford.
http://seekingalpha.com/article/160617-lessons-from-lehman-s-bankruptcy
http://www.nytimes.com/2008/09/15/business/15lehman.html?pagewanted=all
http://money.cnn.com/2009/09/08/news/economy/lehman_lessons_crash.fortune/index.htm
No comments:
Post a Comment