A Look Back At One Year Ago: Lehman Brothers
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Over the long holiday weekend, we mentioned the anniversary of the Fannie Mae and Freddie Mac bailout (see http://www.financialfraudlaw.com/content/one-year-ago-fannie-mae-and-freddie-mac-bailouts). As we noted, that was just the start of the Big Mess.
Following that bailout, attention turned to Lehman Brothers. One of the largest investment banks in the world, which had been formed before the Civil War and which made it through the Depression, saw its stock price drop by nearly 50 percent.
Henry Paulson, the Secretary of the Treasury, said that the federal government wasn’t going to bail out Lehman. It didn’t. The other shoe dropped and, within a week, Lehman Brothers entered bankruptcy.
Lehman Brothers was gone, Bear Stearns had been acquired by JPMorgan Chase, and Merrill Lynch was purchased by Bank of America (with ramifications, still; see, e.g., http://www.financialfraudlaw.com/content/more-bank-americasec-settlement-b-files-memorandum-support-proposed-settlement).
Things got worse….
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