Posts tagged ‘Lehman Brother’

Federal Reserve Bank (FED) and White House become little Panic (Big Panic) about the American Financial situation. But the good news, Storm in American Economic has no big effect to their politic, it indicates that American has already opened their mind and has already become the settle states, if we compare with Indonesia, when Crisis Strom attacked in 1998; Economic Panic has multidimensional effect to politics. So we don’t find a demo in America about their politic, about government policy in economic.
Back to topic!
Today, any news showed and told about wall street and financial in large company in America. Some of them run bankrupt, show the minus trend in their balance sheet, try to find new buyer and some of them going to merge. I don’t know (maybe I didn’t heard the news before) about the $700 million white house proposal to congress was deal or not. Once deal, this is world history.
NYTimes.com has accurate analysis and put in box chart to understand that there are 29 companies are hard hit from the financial crisis; started by Credit crunch some couple months before. The 29 big companies, WaMu is the worst. WaMu show negative Market Capitalization more than 90 percent in their market capitalization from $31.1 billion in October 2007 to $ 2.1 billion in September this year. Very hard hit!
Freddie Mac, taken over by government become of poor performance and shows 99.3 percent in their market capitalization. Both WaMu and Freddie fall because of bad credit in mortgages and loans. The report shows that in September 2008 Freddie Mac only out $ 0.3 billion of their market capitalization or declined 99.3 percent in October 2007 around $41.5 billion.
Countrywide financial run to bankrupt, biggest and largest mortgage financial shows $0 in their market capitalization in their report. It was brought by Bank of America in June but no helpless and gone to collapse.
American International Group, Insurance Worldwide Company also wrote off $32.3 billion in September this year or decline 82 percent of their market capitalization from $ 179.8 billion in October last year, but their worldwide branch claimed and conference that their costumers is save and need not to worry about their condition. They said, the problem only attacked their central AIG in America. Read more »

Lehman Brothers was founded in 1850 by two cotton brokers in Montgomery, Ala. The firm moved to New York City after the Civil War and grew into one of Wall Street’s investment giants, despite period brushes with death. On Sept. 14, 2008, the investment bank announced that it would file for liquidation after huge losses in the mortgage market and a loss of investor confidence crippled it and it was unable to find a buyer.

Lehman’s slow collapse began as the mortgage market crisis unfolded in the summer of 2007, when its stock began a steady fall from a peak of $82 a share. The fears were based on the fact that the firm was a major player in the market for subprime and prime mortgages, and that as the smallest of the major Wall Street firms, it faced a larger risk that large losses could be fatal.

As the crisis deepened in 2007 and early 2008, the storied investment bank defied expectations more than once, just it had many times before, as in 1998, when it seemed to teeter after a worldwide currency crisis, only to rebound strongly. Read more »