Reborn Japan for entertainment

Chapter 447 Lehman Incident
When Sakamoto Kiyoshi was immersed in filming, a very important part of his "Sony" plan gradually became clear.

The enormous power of the financial crisis is also gradually revealed. . .

United States.

After entering September, the continuous decline of the US stock market is still refreshing people's perception.

Among them, Lehman Brothers, whose decline rate is increasing, is about to face a huge crisis in less than a month, just as Yuichi Kagawa said!

On September 9, according to published financial reports, Lehman Brothers lost more than US$10 billion in the second quarter of that year, which was the heaviest loss in a single quarter since its establishment 39 ​​years ago!

This intensified the public's distrust of Lehman Brothers.

This did not make Lehman Brothers feel desperate. What made them completely fall into the abyss was a piece of heavy news two days later.

On September 9, US Treasury Secretary Paulson declared that the Federal Reserve would not aid Lehman Brothers!
This simple sentence directly caused Lehman Brothers to fall by 13.5%, closing at $3.65, falling to a new low in 14 years.

Lehman Brothers was over.

This is a fact that all Wall Street financial professionals understand.

And why did the Federal Reserve give up aid to the fourth largest investment bank in the United States?

This is to start with the crisis encountered by major banks in the United States under the subprime mortgage crisis.

As early as February 2007, the subprime mortgage problem emerged, and by March 2, the Federal Reserve prompted China Bank to acquire Bear Stearns Bank, the fifth largest investment bank.

As the leader of the entire financial system, the Federal Reserve must have done a lot of policy reserves and risk assessment during this period.

This is why the Federal Reserve bailed out National Financial Services Corporation and Bear Stearns Bank through acquisitions in January 2008 and April 1 respectively.

Because, in the view of the Federal Reserve, under the subprime mortgage crisis, letting a bank go bankrupt will inevitably cause far-reaching social impacts. Unless it is absolutely necessary, it will not easily approve such a thing to happen.

The reason is to avoid bank failure and cause social panic.

Moreover, the Fed believed that the situation at that time was not too bad, so the Fed took action.

However, all of this, after entering September, the situation suddenly deteriorated!

On the one hand, Fannie Mae (Fannie Mae and Freddie Mac), AIG (American International Group), WaMu and other super-large enterprises have problems one after another. The Fed's assistance responsibility has increased several times in an instant, but in fact the Fed cannot take care of it at all.

On the other hand, the Fed's implicit bailout agreement for financial institutions has inspired moral hazard.

Lehman Brothers, in particular, dared to continue to increase their long CDO positions under such a harsh background, because they believed with full confidence that the Federal Reserve would definitely help.

However, Lehman Brothers was wrong. . .

In order to completely cut off the source of risk, the Federal Reserve, after some deliberation, decided to choose a reckless institution with sufficient influence to deter the market, voluntarily gave up all potential commitments to it, and let it go bankrupt completely, so as to warn all market participants Or, stop fantasizing.

Unfortunately, Lehman Brothers was chosen.

The reason why Lehman was chosen was first of all because it was large in scale and had enough shocking power; but it was not as large as Liangfang or AIG. The Federal Reserve judged at the time that even if Lehman collapsed, it would not cause the collapse of the financial system.

More importantly, among the many institutions that have been hit hard, Lehman is the one with the highest proportion of risk asset investment, and it is also the one with the heaviest losses.

Who told you Lehman Brothers to be like a jumping clown, jumping up and down, very conspicuous, if you don't choose you, who will you choose? !
Obviously, Lehman Brothers was regarded by the Federal Reserve as a chicken to kill chickens and monkeys!
No one can blame this, NO ZUO NO DIE. . .

In the end, Lehman Brothers, who played with fire and set itself on fire, was slowly approaching the verge of sinking like this big ship like the Titanic of Wall Street. . .

On September 9, Lehman's last straw was also lost.

Bank of America, representing the will of the Federal Reserve, rejected Lehman's merger intention!
On September 9, the International Swaps and Derivatives Association announced that investors are allowed to write off credit derivatives associated with Lehman to avoid being involved in the huge vortex caused by Lehman's bankruptcy.

In other words, Lehman's bankruptcy is a foregone conclusion!

More than 745 employees sat anxiously in the Lehman Brothers headquarters building at [-] Seventh Avenue in New York City, waiting for the trial of fate.

September 2008, 9 was a day worthy of "commemoration".

At 1 o'clock in the morning, Lehman Brothers, which was still unable to find its next home, could only announce the filing of the No. 11 bankruptcy protection bill.

In other words, the fourth largest investment bank in the United States declared bankruptcy!
The bankruptcy of Lehman surpassed the bankruptcy of Drexel Securities in 1990 and became the largest investment bank bankruptcy in American history!
What makes people feel ridiculous and desolate is that not long ago, Lehman still vowed that the Fed would not give up on them and would definitely rescue them. . .

However, the ending is clear to everyone.

This is not the end of the incident, but it can be said to be the beginning!

The collapse of the American financial giant Lehman Brothers immediately triggered violent turmoil in the global financial market.

On this day, Wall Street ushered in a veritable "Black Monday". U.S. stocks plummeted. The Dow Jones Index recorded the largest single-day drop in points and losses since the "9.11" incident, and global stock markets also plummeted.

Kiyoshi Sakamoto learned the news from his investment president within half an hour after Lehman Brothers declared bankruptcy.

At that time, it was already 15:3 pm on the [-]th in Osaka. . .

"I see."

After speaking to Yuichi Kagawa who was far away across the ocean, Kiyoshi Sakamoto hung up the phone.

Looking at the wild "Suzuran High School" in front of him, Kiyoshi Sakamoto, who was wearing a black school uniform and wearing a mohawk on the back, his eyes were sharp like a falcon, and the corners of his mouth slightly raised, "It's about to start..."

There was an unconcealable joy hidden in his tone.

On September 9, the day after Lehman Brothers declared bankruptcy, Asia-Pacific stock markets began to suffer.

The stock market fell sharply, among which Japan, Hong Kong, Taiwan, and South Korea all fell by more than 5%. The Australian stock market was also hit by an earthquake. The Australian dollar opened weakly on the 16th, and the stock market closed down by more than 1.5%.

The bankruptcy of Lehman Brothers indicates that the financial crisis will further escalate, and more large financial institutions will collapse in this crisis.

The collapse of the first-tier investment banks, the pillars of Wall Street, announced that the core of the US financial system has been shaken, and the subprime mortgage crisis has officially evolved into a global financial turmoil.

Later, people called this event, the fuse that triggered the financial crisis to spread to the world. . .

Lehman Incident!

(End of this chapter)