What did Lehman Brothers do and why did they go bankrupt?

Investment bank. The company has been the leader in the U.S. mortgage bond business for 40 consecutive years. However, since the outbreak of the subprime mortgage crisis, the huge amount of "poison assets" related to residential mortgages held by the company has been worth ** in a short period of time, crushing the company alive.

Lehman's $600 billion balance sheet has a net asset value of only about $25 billion. At present, Lehman Brothers remains at risk of depreciation of mortgage-linked loans** and loss of derivatives business. Compared to its main rivals, Lehman has much more real estate-related businesses.

According to Brad Sintz, Lehman's former chief financial officer, Lehman's hard-to-value products are about a double of its net worth.

With a total debt of $613 billion, Lehman Chuan is out of breath, Citigroup, Bank of New York Mellon, Aozora Bank 8304 and Mizuho Financial Group 8411 are among Lehman's largest unsecured creditors, of which Citigroup holds about $138 billion in Lehman's bond assets.

It's an investment bank, and it's about the same as our ** company here!

This time, it was because he issued too many bonds and the leverage was too high, which caused him to be short of funds in a short period of time and not be able to pay the money.

It is the third largest investment bank in the United States.

Bankruptcy because of the subprime mortgage crisis.

Ping, I'm here again.

It is the third largest investment bank in the United States.

Bankruptcy because of the subprime mortgage crisis.

The reasons for the collapse of Lehman Brothers are as follows:

1. The important reason is CDO**, which caused Lehman Brothers to eventually produce a $15 billion loophole. In a sense, deep participation in the synthetic CDOs (Secured Debt Obligations) and CDS (Credit Default Swaps) markets is likely to be one of the direct causes of Lehman's collapse.

2. No one has helped with other large enterprises. On September 15, 2008, Lehman Brothers, the fourth largest investment bank in the United States, finally gave up its armor and filed for bankruptcy protection amid the intensification of the crisis in the subprime mortgage market (subprime mortgage crisis).

Reasons for Lehman Brothers' bankruptcy:

External causes: caused by the subprime mortgage crisis.

Lehman Brothers, which has been the leader in the U.S. mortgage bond business for 40 consecutive years, failed to rise to the brink of the subprime mortgage crisis, and its problem stemmed from the huge amount of "poison assets" related to residential mortgages held by the company that lost a lot of money in the subprime mortgage crisis. Lehman held a large number of subordinated debt financial products (including MBS: Real Estate Mortgage Backed Loans**; cdo：

Secured Debt Obligations), and other lower-grade residential mortgage finance products. Therefore, after the outbreak of the subprime mortgage crisis, the default rate of subprime mortgages rose, which caused the credit rating and market value of subprime financial products to plummet. As credit risk expands from the subprime mortgage segment to other residential mortgage segments, the credit ratings and market value of lower-grade residential mortgage finance products have also declined significantly.

**Sit on one's hands.

While both Barclays and Bank of America were extremely interested in acquiring Lehman Brothers, they ultimately chose to abandon because they did not receive a commitment from the United States** or other Wall Street firms to protect Lehman Brothers' assets from potential losses.

Internal causes. First of all, take Lehman's Neubergerberman, for example, their asset management business is doing well, but bond trading is its core business. Therefore, due to the mistake of decision-making, Lehman Brothers was saddled with more than 50 billion dollars in assets that were difficult to get rid of.

Then, it was Lehman's self-help. According to Paulson, after the Bear Stearns incident, the Fed has opened a special financing channel for investment banks, allowing investment banks to lend directly to ** banks like commercial banks. But Lehman Brothers has not taken advantage of this policy, and instead has been bent on trying to find a way out of the predicament through the capital market.

As a result, the best opportunity to save oneself was lost.

The impact of Lehman Brothers' bankruptcy on China's economy.

Although Lehman Brothers released the profit and loss statement of the company's assets at the time of bankruptcy, the column on debt rights shows that as a creditor, the majority of the creditors are not in China, so the Chinese investment bank will not suffer losses due to the depreciation of huge claims. The reason why China's banking sector has so far been fortunate to withstand wave after wave of shocks is mainly due to China's non-freely convertible monetary system. China's foreign exchange administration institutions can effectively control the inflow and outflow of funds according to the current market situation.

Therefore, it can be said that the survival of China's banking industry is really caused by the heavy and slow pace of China's financial reform, and it is indeed a blessing in disguise.

On September 15, 2008, under the influence of the subprime mortgage crisis, Lehman Brothers, a U.S. investment bank that had been in business for 158 years, announced that it had filed for bankruptcy protection. The bankruptcy of Lehman Brothers also triggered a global financial tsunami. The refusal of the U.S. Treasury Department and the Federal Reserve to bail out Bear Stearns, which was on the verge of bankruptcy, caused major controversy, and the collapse of market confidence was out of control.

An important lesson of the financial crisis is that competition among lenders fosters both innovation and high levels of instability.

The collapse of Lehman Brothers shows how difficult policymakers find themselves in the face of a financial crisis. They don't want to be seen as rushing in to bail out financial institutions that are struggling because they're too risk-conscious. But in this day and age, markets, banks, and investors are all connected by a complex and invisible web of financial relationships, and the pain of letting large institutions fall on their own is too great to bear.

Lehman Brothers is an American investment bank that belongs to the financial industry, and at its peak it was once known as the Five Tigers of Wall Street. Lehman Brothers collapsed in 2008 following the subprime mortgage crisis in the United States.

The subprime mortgage crisis in the United States.

The so-called subprime mortgage crisis is that banks cannot recover too many external loans, and the mortgaged real estate is not worth much, resulting in the rupture of the financial chain. These loans are mainly used by people to buy real estate, because at that time, the United States ** introduced a policy, in order to motivate people to buy a house, they can pay a very low down payment first, and the rest of the full amount is completely borrowed from the bank. Some states don't even have to pay a down payment, as long as you have a stable job and credit card credit, you can directly borrow from the bank to buy a house.

The introduction of this policy has caused Americans who have no money to buy a house to borrow money from banks to buy a house, and the real estate market has reached an unprecedented boom. But behind the boom lies an infinite crisis, which came in 2008.

Lehman Brothers was originally an investment bank, due to the unprecedented boom in the U.S. real estate market before 2008, Lehman Brothers also wanted to catch this wave of fast trains, so they lent American home buyers with ** dividends.

In 2008, Wall Street institutions shorted U.S. real estate, resulting in the real estate industry**, those Americans who borrowed money from banks to buy houses could not afford to pay their mortgages at all, and ** houses were worthless, so many investment banks went bankrupt, Lehman Brothers was also one of them.

Lehman Brothers also had problems of its own.

In fact, despite the impact of the subprime mortgage crisis in the United States, Lehman Brothers' own investment data is not very good. Lehman Brothers' total loans reached $600 billion, of which only $30 billion were in effective assets, and poor financial data accelerated Lehman Brothers' collapse.

At that time, almost no financial institution was willing to take over Lehman Brothers, although banks such as Goldman Sachs and Morgan also suffered heavy losses, but the United States ** came to the rescue.

The United States** believes that Lehman Brothers' financial data is not worth helping, and Lehman Brothers has not found a home for itself in a limited time, so it can only declare bankruptcy.

The lecturer of this course is Liu Qingfeng, who has been engaged in publishing for more than ten years, and later served as the chief researcher of the financial think tank and the editor-in-chief of the journal "Finance and Taxation Research".

First, the bankruptcy of Lehman Brothers has caused a deterioration in China's import and export environment. This is because the reduction in consumption in the United States will inevitably lead to a decrease in China's exports, which in turn will also lead to an increase in the cost of domestic imports. Second, the bankruptcy of Lehman Brothers is a continuation of the subprime debt crisis in the United States, which has brought considerable losses and shocks to financial institutions, and the five major investment banks on Wall Street have strong investment and research teams, assets exceeding hundreds of billions of dollars, and information resources are also extremely rich, and such large investment banks have also collapsed, which shows the seriousness of the crisis.

This will inevitably have an impact on the Chinese market, which is mainly manifested in the market's confidence in the market, and the bankruptcy of institutions with major problems in the United States has cast a shadow on the psychology of Chinese investors. Finally, the bankruptcy of Lehman Brothers caused direct losses to China's domestic financial institutions. Facts have proved that the day after the news of Lehman Brothers' bankruptcy came, it was the end of the Mid-Autumn Festival three-day holiday opening of A-shares, and the banking sector in Shanghai and Shenzhen was the first of the day, and its performance could only be described as "miserable", among them, Industrial and Commercial Bank of China (,) fell, China Construction Bank (,,) fell, and Bank of China fell.

Under the vertical blow of many negative news, bank stocks in Shanghai and Shenzhen fell sharply throughout the day, and as many as 8 bank stocks fell to the limit. According to the latest information disclosed yesterday, China Merchants Bank (,, bar), which fell on the 16th, held a total of $70 million in bond exposure issued by Lei Bend Chenman Brothers as of yesterday, including $60 million in senior bonds and $10 million in subordinated bonds, and the company has not yet made impairment provisions for the above bonds.

The bankruptcy of Lehman Brothers was mainly affected by the subprime mortgage crisis. The most fundamental cause of the subprime mortgage problem and the payment crisis is the decline in the solvency of subprime mortgage recipients due to U.S. housing prices**. Subprime mortgage bonds, as a subordinated mortgage attached to the subprime mortgage loan, have a cash outflow problem for debt servicing, and it is inevitable that there will be problems with this kind of **.

With steep home prices** and low interest rates, lenders and borrowers are becoming less risk-aware, and U.S. subprime lending is growing rapidly. At the same time, the proportion of floating-rate mortgages and various preferential loans is increasing, and various high-risk loan instruments are growing rapidly.

In addition, Lehman Brothers has its own reasons. First, they get into an unfamiliar business, growing too fast and the business too concentrated. However, when the market crashes, such a large systemic risk will inevitably have a huge negative impact.

Secondly, another reason is that the capital is too small and the leverage ratio is too high.

Lehman Brothers was the fourth-largest investment bank in the United States at the time. At the time, Lehman Brothers was the world's top investment bank and a significant underwriter of U.S. residential mortgage bonds and commercial real estate bonds.

In addition, Lehman Brothers, with a history of 158 years, is the fourth largest investment bank on Wah Leung Shul Street. In 2007, Lehman ranked 132nd in the world's top 500.

For such a large company to go bankrupt, some corporate investors should learn the lesson, so it is important to have a strategic plan for the business. Any omission in strategic planning can cause unexpected difficulties for businesses.