Lehman Brothers

How the Fed Let the World Blow Up in 2008

It was the day after Lehman failed, and the Federal Reserve was trying to decide what to do.

It had been fighting a credit crunch for over a year, and now the worst-case scenario was playing out. A too-big-to-fail bank had just failed, and the rest of the financial system was ready to get knocked over like dominos. The Fed didn’t have much room left to cut interest rates, but it still should have. The risk was just too great. That risk was what Fed Chair Ben Bernanke calls the “financial accelerator,” and what everyone else calls a depression: a weak economy and weak financial system making each other weaker in a never-ending doom loop. 

But the Fed was blinded. It had been all summer. That’s when high oil prices started distracting it from the slow-burning financial crisis. They kept distracting it in September, even though oil had fallen far below its July highs. And they’re the reason that the Fed decided to do nothing on September 16th. It kept interest rates at 2 percent, and intoned that “the downside risks to growth and the upside risks to inflation are both significant concerns.”

In other words, the Fed was just as worried about an inflation scare that was already passing as it was about a once-in-three-generations crisis.

Read more. [Image: Reuters]

But Newton stole his idea from Joseph Raphson, Einstein was wrong when he described the shape of the orbit of Saturn’s moons, that my government is full of intelligent and highly commended individuals but cheat behind the eyes of their own men, that the most prestigious companies at Wall St. planned the Lehman Brother’s bankruptcy that ruined the world economy, that the people I look up to ended up becoming liars, and that the amazing friends I had we’re just mistakes. Is there anything still even real?

John Kasich Was Senior Executive At Lehman Bros.

Ohio Gov. John Kasich loves talking about his record in office, his knack for balancing the budget and his controversial decision to back Medicaid expansion.

But there’s one part of his resume he’s less inclined to discuss: the years he spent as a senior executive at Lehman Brothers.

Kasich joined Lehman’s investment banking division as managing director in 2001, working there until the firm’s collapse in September 2008 unleashed global panic and served as the catalyst for the financial crisis.

Lehman Brothers was arguably the most deeply vilified Wall Street firm during the 2008 meltdown and Kasich was a senior executive.

“Kasich’s close ties to Wall Street should raise concerns for everyone who suffered due to the collapse of our financial system caused by those very same banks,” said Craig Holman of the advocacy group Public Citizen. “This is not a responsible businessman, and strongly suggests he would not be a responsible president.”

Swiss bank UBS has admitted that its investment banking arm has lost around $2bn (£1.27bn) through "unauthorised trading".

(Guardian)

Shares in UBS fell by almost 10% in early trading after it reported the loss, which could push the bank into the red for the current financial quarter.

In a brief statement, issued on the third anniversary of Lehman Brothers, UBS said that the issue was still being investigated.

“UBS has discovered a loss due to unauthorized trading by a trader in its Investment Bank. The matter is still being investigated, but UBS’s current estimate of the loss on the trades is in the range of $2bn. It is possible that this could lead UBS to report a loss for the third quarter of 2011.

UBS added that "no client positions were affected.”

Simon Ballard, senior credit strategist at RBS capital markets, said the trading loss would add to public concern over the banking sector.

“At a time of greater regulation, it will raise questions about regulatory capital and whether ringfences are in place to stop this happening,” Ballard told Bloomberg TV.

Daily Post #2: Financial Crisis Round 2?
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“Stocks are plummeting. The economy is slowing. Politicians are scrambling to find solutions but are mired in disagreement.” Any of that sound familiar? Aside from being the opening of an article in the New York Times this morning, the picture it paints should remind us of the financial crisis back in 2008. Remember how that started because consumers were taking out more debt than they can afford to pay off? Pretty much the same deal now, but here’s the kicker: the debt now is government debt. Back then, it was consumer debt.

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Margin Call, 2011

<Be First, Be Smarter or Be Cheat> 누군가에겐 이런 것들이 삶의 좌우명일지도 모르겠다. 어쨌거나 성공해서 대기업 CEO가 되는 것이 꿈인 사람도 있을 것이다. 하지만 돈이 아무리 많아도 우리는 돈이 더 필요하다. 연봉 10억을 받건 연봉 5천을 받건 부족한건 매한가지다. 로또를 맞으면 죽을 때까지 일 안하고 행복하게 살 수 있을 것 같지만, 아이러니하게도 수많은 벼락부자들은 오히려 불행한 삶을 살았다. 돈이라는 종이쪼가리 앞에서 인간은 참으로 추악하고 잔인한 존재가 된다. 자본주의라는 거대한 울타리안에서 우리는 정녕 ‘어쩔 수 없는’ 이기적인 개인이 될 수 밖에 없나?

2008년 세계 금융 위기의 시작을 알린 리먼 브라더스 사건을 다루고 있는 이 영화는 금융, 주식, 경제에 대한 지식이 없더라도 우리가 이 사회에서 존경하고 갈망하는 소위 ‘성공’한 사람들이 얼마나 더럽고 치사한 방법으로 그 자리를 지키고 있는지 여실히 보여준다. 회사 직원들의 커리어가 산산조각이 나던, 수십년을 함께 일한 동료가 백수 빚쟁이가 되던, 심지어 전세계 경제가 패닉에 빠지던, 윤리나 상식이나 그 어떤 것도 그들에겐 손실을 감수할 이유가 되지 못한다. 그들은 그저 살기 위해 이윤을 추구하고 이윤을 위해 살아갈 뿐이다.

이에 반해 주인공이라고 할 수 있는 케빈 스파이시는 이 사회에 남아있는 실낱같은 양심을 상징한다. 회사의 일방적인 구조조정은 어찌하지 못하지만 적어도 모든 불합리에 있어 자신의 부하직원들에게 다시 일어설 수 있는 희망을 주는 인물이다. 그러나 선택의 순간, 돈과 양심 사이에서 갈등하던 하던 그도 결국엔 돈을 택한다. 영화는 그를 절대악인 기업 회장에 반하는 주인공으로 그리고 있지만, 사실 그의 모든 행동은 그저 최후의 선택에 대한 자기 면죄부에 불과했을지도 모른다. 씁쓸하지만 자본주의란 그런 것이 아닌가. 기승전’돈’이 되는 세상. 아 그러고보니 절대악은 기업 회장님이 아니라 케빈 스파이시 본인이었을지도 모르겠다.

힘겨웠던 하루가 지나고 이제 케빈 스파이시 앞에 놓인 탄탄대로와는 달리, 영화는 그가 자신의 애완견 시체를 땅에 파뭍는 것으로 끝이 난다. 그것도 전처의 집 앞에다가… 뭐하는 짓이야 이 양반아. 엔딩 크레딧이 올라가면서도 배경음악 대신에 그의 삽질소리가 이어진다. “푸쉭 퍽 푸쉭 퍽” 돈이 아무리 많아도 죽음이라는 순리 앞에서, 돌아갈 수 없는 행복했던 시간들 앞에서 한없이 무력하기만한 중년의 인생이 그렇게 땅에 뭍힌다. 자본주의의 현실 앞에 ‘어쩔 수 없는’ 우리들의 양심과 함께. 

YES!

If you had purchased $1000 of shares in Delta Airlines one year ago, you would have $49 today. If you purchased $1000 of shares in AIG u would have $33. If you purchased $1000 of shares in Lehman brothers, you would have $0 today. But, if you purchased $1000 worth of beer, drank all the beer, turned in the aluminum cans for recycling, you would have $214. Therefore the best current investment plan is to drink heavily & recycle. It is called the 401- Keg Plan!