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How Did The Lehman Brothers Collapse

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The Fall of The Lehman Brothers What would you do to keep your business alive if it was on the brink of bankruptcy. Over the years there has been speculation on what happened to cause the fall of The Lehman Brothers. Through this research I will discuss the actual timeline of events; from long before to include any stressors to cause all the way to long after to the aftermath this fall may have caused. It will identify who had any key role to play in the collapse, and what they did to help, or hurt the process. This will review any major and minor contributing factors that were factors in this crisis. Also, the reasoning will help to conclude to why this occurred. There were many countries directly and indirectly effected by the demise of the …show more content…

The Lehman Brothers was a hearty company that upheld through many trying times. They stood up against the railroad bankruptcy, the great depression, two world wars, a capital collapse and the Russian default. (Investopedia, 2017) Being business minded the brothers were when then the housing markets were going off the charts in 2003 they decided to invest in the housing market. They brought on several different mortgage lenders to include, subprime lenders and Alt-A lenders. This substantially increased their: capital markets, net income and revenue dramatically. Sometimes you must quit while you are ahead, because there can be such thing as too much of a good thing. However, in the beginning of 2007 they were still at an all time high and moving forward. That is until the stock market took a huge drop in March. That was beginning of several major mistakes the Lehman Brothers made during this fiasco. Their Chief Financial Officer led them to believe that the markets were stable and the continued defaults on mortgage subprime loans would not impact them …show more content…

This was highly unsuccessful and soon after they filed for bankruptcy and closed their doors. When there is failure a share of the blame is passed around, but who really was to blame for the failure of the Lehman Brothers? Although, there are many to blame for an accumulation of actions when it is given you always start from the top. The CEO of the Lehman Brothers was Richard Fuld. Responsibility is always held by the most senior members of a firm, and they are responsible to their firms, employees, and shareholders to do what is right for their company. Whether they do or not is up to them and will usually result in the company’s success or failure. Maybe if he had better council he might have made it through this intact, it could possibly the responsibility of his Chief Financial

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