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Archive for the tag “Lehman Brothers”

How the Tariff War Could Turn Into The Next Lehman

Ten years ago this week, Lehman Brothers filed for bankruptcy, and the world suddenly changed. That date, Sept. 15, 2008, was hardly the starting point of the Depression-sized financial crisis that would soon threaten to sink the entire world economy; it had begun more than a year earlier. But most scholars agree Lehman’s failure marked the moment when everyone realized at once that the so-called experts had no idea how deep the interconnections ran.

Read Here – Foreign Policy

What Lehman Brothers’ Failure Means Today

Photo by José Martín Ramírez C on Unsplash

The standard story about the September 2008 collapse of Lehman Brothers is that it led to a deeper understanding of the risks of financial complexity and free-wheeling capitalism. In fact, the ensuing crises in the US, Europe, and elsewhere were more a product of broader changes in twenty-first-century politics and society.

Read Here – Project Syndicate

Also Read: The Forgotten History of the Financial Crisis

Never Saw It Coming?

The demise of Bear Stearns was the beginning of a six-month erosion in global financial stability that would culminate with the failure of Lehman Brothers on September 15, 2008, triggering possibly the greatest financial crisis in history. To be sure, the Great Depression of the 1930s involved a far greater collapse in economic activity. But never before had short-term financial markets, the facilitators of everyday commerce, shut down on a global scale, writes Alan Greenspan

Read Here – Foreign Affairs

Is Something Bigger Than Lehman Around The Corner?

Anyone who remembers the collapse of Lehman Brothers Holdings Inc. little more than five years ago knows what a global financial disaster is. A U.S. government default, just weeks away if Congress fails to raise the debt ceiling as it now threatens to do, will be an economic calamity like none the world has ever seen.

Read Here – Bloomberg

Capitalism Under Fire

It’s five years since the collapse of Lehman Brothers, on 15 September 2008. Since then, the legitimacy of capitalism as a way of organising society has been undermined; its promises of prosperity, social mobility and democracy have lost credibility. But there has been no radical change. The system has repeatedly come under fire, but it has survived. Part of the price for capitalism’s failures has been the end of some social advances previously wrested from it.

Read Here – Le Monde Diplomatique

What’s Inside America’s Banks?

The financial crisis had many causes—too much borrowing, foolish investments, misguided regulation—but at its core, the panic resulted from a lack of transparency. The reason no one wanted to lend to or trade with the banks during the fall of 2008, when Lehman Brothers collapsed, was that no one could understand the banks’ risks. It was impossible to tell, from looking at a particular bank’s disclosures, whether it might suddenly implode.

For the past four years, the nation’s political leaders and bankers have made enormous—in some cases unprecedented—efforts to save the financial industry, clean up the banks, and reform regulation in order to restore trust and confidence in the American financial system. This hasn’t worked. Banks today are bigger and more opaque than ever, and they continue to behave in many of the same ways they did before the crash.

Read Here – The Atlantic

What’s Inside America’s Banks?

The financial crisis had many causes—too much borrowing, foolish investments, misguided regulation—but at its core, the panic resulted from a lack of transparency. The reason no one wanted to lend to or trade with the banks during the fall of 2008, when Lehman Brothers collapsed, was that no one could understand the banks’ risks. It was impossible to tell, from looking at a particular bank’s disclosures, whether it might suddenly implode.

For the past four years, the nation’s political leaders and bankers have made enormous—in some cases unprecedented—efforts to save the financial industry, clean up the banks, and reform regulation in order to restore trust and confidence in the American financial system. This hasn’t worked. Banks today are bigger and more opaque than ever, and they continue to behave in many of the same ways they did before the crash.

Read Here – The Atlantic

Admit Economic Ignorance

It is time for economists to admit that they are stumped. Four years after being blindsided by Lehman Brothers’ collapse, the profession is still stumbling in the dark. Policymakers and pundits still make confident pronouncements, but the conclusions are radically different. The expert disagreements give away the truth: ignorance reigns.

Read Here – Reuters

Celebrity Economist Rushes to Save India

The first time I met Raghuram Rajan, the Indian economist couldn’t sit still.

It was over coffee in Bangkok in November 2008, less than two months after Lehman Brothers Holdings Inc. imploded and almost took the global financial system down with it. Rajan had become a big draw by then, having warned as early as 2005 that a crash was coming. On that day in Thailand, he had a more local crisis on his hands: The hotel’s WiFi was out.

“I’ll be back — I need to make a call and make sure the world economy is still there before I begin my speech,” he deadpanned. “You never know.”

That last sentiment could also apply to an extraordinary bit of recruitment on the part of Indian Prime Minister Manmohan Singh. Rajan, 49, is one of his most pointed critics, never one to shy away from slamming India for trying the same failed policies over and over again. Rather than castigate Rajan, Singh offered him a job: top adviser to the Finance Ministry.

Read Here – Bloomberg

U.S. Banks Ignore Europe’s Lesson On Greed

Four years after the collapse of Lehman Brothers Holdings Inc. and the near-total paralysis of capitalism’s central nervous system — the moment fear completely overwhelmed greed on Wall Street — we are starting to see a few glimmers of hope. The good news: Several big banks have finally started taking steps to reform Wall Street’s out-of-control compensation system, which rewards bankers and traders with big bonuses for taking insane risks with other people’s money. The bad news: These banks are in Europe, and most of their U.S. cousins still just don’t get it.

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