Lehman Brothers fall in Bankruptcy

Basically the biggest news today. Stock market going dddddooooooowwwwwwwwnnnnnnnnnnnnnn

613 Billion

Oh wow. My mom told me about this a few hours ago but I didn't think it was this bad.

Things are gonna get a lot worse before they get any better.

We're fucked
We're fucked
We're really really fucked

I know banks are failing at a scary rate but, I don't really know who to blame. The businessmen with terrible practices by giving loans to people they knew couldn't afford a 300,000 house. Alan greenspan since people believe the seeds to this current problem were sown twenty years ago or should I blame the people who thought they could buy a 300,000 when they obviously couldn't or should I blame the politicians who basically fucked up the economy by overspending and fucking everything up with their general stupidity.

I need more information before I can come to an educated conclusion.

Again

We're fucked
We're fucked
We're really really fucked

It's still the so called subprime problem, but worse than anyone thought.

Banks approved people for loans to buy homes on the assumption that housing prices would continue to rise, allowing them to use the additional equity to help pay off the loan. Without this equity, these buyers would probably not be able to afford to mortgage.

Housing prices bubbled, and when the bubble popped and housing prices started declining, these buyers were unable to support their loans with equity and defaulted in large numbers. The various banks and hedge funds who had been packaging and repackaging these subprime mortgages in a complicated form of corporate hot potato.

Corporations and brokerages grouped these loans together with the assumption that while they might be individually bad, only some of them would fail. When the mortgages began default en masse, this didn't work out. Further complicating the situation is the fact that high numbers of failures and defaults have led to decreased lender confidence, so entities that get into short term trouble have difficulty getting loans and liquidity to allow them to survive a panic or short bad spell, and what otherwise might have been a blip becomes a bank failure.

In my opinion, contrary to what Fiery states, this is an example where deregulation failed spectacularly due to shortsighted investments and economic games of chicken. In fact, I think this situation has some parallels to the now defunct idea of buying stocks on margin.

Some people also blame the FRB under Greenspan for not forcibly bursting the housing bubble earlier.

I think the lesson to be learned here is that many types of marginal speculation do need to be somewhat regulated, or else end up as economic games on chicken, and no matter who ends up with the bag, the ripples send shockwaves across the economy and market.

Then again, we may be fucked. We are teetering dangerously close to significant stagflation.

the economy is going to shit and we're devoted to war.

How is that contrary to what I state? I made no such mention of regulation. I basically stated that I don't have enough information to make an educated conclusion (i.e. I need to do research)






I believe another lesson to be learned is personal responsibility. If you can't afford a house without fiscal shenanigans and such. Like how people were using the equity in their homes to pay for the home itself. Then you honestly can't afford the house and you shouldn't try to force the issue.

I believe we can all agree that a fuck-ton of smaller problems have fused and grown into a massive one.

Then again, we may be fucked. We are teetering dangerously close to significant stagflation.[/quote]

Although I agree that our economy is in an ugly state, I don't think this is the end of the modern world as we know it. If my rudimentary understanding of how an economy works is to be believed, then isn't this is a good thing? Not in the short-term perhaps, but long term.

If a plant is to be kept healthy, you must prune its branches. So too must bad businesses be removed to keep an economy healthy. Banks don't just fail at the drop of a hat; I'm sure the higher-ups at Lehman Brothers had ample opportunities to either reform or revamp their policies and practices before they were faced with bankruptcy. These aren't just headless chickens in suits; these are college educated, trained and experienced bankers who made more than a couple of bad decisions over a long period of time.

The silver lining in this whole situation? People are getting angry, and when people get angry things get done. Reform- the necessary, large scale kind- doesn't occur unless an equally necessary, large scale incident is there to inspire it. Constancy does not inspire growth.

Who/What is the "Lehman Brothers"?

We're going into such a depression.

Mainly becomes dumbass's (IN MY STATE OF GEORGIA) just decided to fill up everything on gas because they thought Ike was coming (WHICH IS IN TEXAS)

GAS WAS FINALLY GOING DOWN BUT NOOOOO NOW IT JUST WENT HIGH AS SHIT.

Seriously, our stock market is worse then the Great Depression.
So many people are losing jobs.(or gonna)

I'm going to hug mine.

I misread your post. I thought you said that the government caused the problem due to lying politicians and excess spending, which was a misreading.

That was some grade A bullshit. Almost every gas station in my city was out of gas. With the exception of the premium shit. Regular and the middle grade were all gone. Makes me glad that my car get 25/35 mpg



A global investment bank that was created way back in 1850. Its one of America's oldest banks.

http://en.wikipedia.org/wiki/Lehman_Brothers

and what does this mean for the rest of the world??/

The only thing I can think is "About damn time" America has been financially unstable for almost a decade and now it is falling apart, admittedly this is a slightly more thorough collapse than I would like to see. Lehman Brothers collapsing over a weekend is a little extreme. I want to place the blame on oil companies for starting it, but they aren't entirely the cause. I'm going to blame the oil companies anyway.

On the one hand I think that I should take all my money out of my bank, but really that doesnt help. I'm probably going to push for a raise while i wait to join up in the military, at least that would give a chance for security. the military either gets it good, or really bad, we'll see.

i suppose we need to wait for solutions now, as we apparently know the problems. i vote that people are stupid and should be removed from the equation lol, jk, but srsly...working with imaginary money, i thought we were adults now..

Unless you have over $100,000 in the bank, that would be a silly and risky thing to do. Your money's insured by the govt. (specifically the FDIC, if I'm not mistaken) so if your bank fails you get your money back.

every dollar over 100K though. Oh ho ho. You are fucked that shit is gone faster than Bruce lee's and Jackie Chan's hands.

I almost sense.. a economic depression... lots of money problems are coming up here in New York; Not just with the Lehman Brothers.

I hope with me being in the marines I'll be able to not get the worst of the depression as we always want soldiers.

That is not what you should worry about. If The dollar collapses or drop much more in value. You military pay will be worthless when you get out. Normally, you can buy a house and possibly a car when you finish your duty. If the dollar isn't worth anything. Then you won't get shit.

The collapse of Lehman Brothers and the takeover of Merrill Lynch by Bank of America has definitely affected the world economy. Even as we speak, a lot of other financial institutions are facing problems of their own, and some big names include AIG, Morgan Stanley and HBOS, though I am not too familiar with the last.

For some courageous investors who are willing to take risks, this period of turmoil can be seen as opportunity, buying stocks of certain companies and waiting for them to rise once more, provided they don't go bust.