Tuesday 22 May 2012
youth voice: Today the most common topic to discuss on the fail...
youth voice: Today the most common topic to discuss on the fail...: Today the most common topic to discuss on the failure of Euro zone in the near future.We all know that Greece is in every bad situation.It ...
Today the most common topic to discuss on the failure of Euro zone in the near future.We all know that Greece is in every bad situation.It is withdrawing all its money.
One of the major reasons of failure of euro zone is the collapse of Lehman Brothers.
Now we would be discussing the collapse of Lehman Brothers
http://www.investopedia.com/articles/economics/09/lehman-brothers-collapse.asp#axzz1vcQSAgWi
Acc. to the link above the main culprit or the reason behind the collapse of the Lehman Brothers is the US housing.The bank acquired five mortgage lenders, including subprime lender BNC Mortgage and Aurora Loan Services, which specialized in Alt-A loans (made to borrowers without full documentation). Lehman's acquisitions at first seemed prescient; record revenues from Lehman's real estate businesses enabled revenues in the capital markets unit to surge 56% from 2004 to 2006, a faster rate of growth than other businesses in investment banking or asset management. The firm securitized $146 billion of mortgages in 2006, a 10% increase from 2005. Lehman reported record profits every year from 2005 to 2007. In 2007, the firm reported net income of a record $4.2 billion on revenue of $19.3 billion
The situation became more vulnerable as its market shares fell by 48% resulting in one more Wall Street failure .
Conclusion
At the end i would like to conclude Lehman's collapse roiled global financial markets for weeks, given the size of the company and its status as a major player in the U.S. and internationally. Many questioned the U.S. government's decision to let Lehman fail, as compared to its tacit support for Bear Stearns (which was acquired by JPMorgan Chase) in March 2008. Lehman's bankruptcy led to more than $46 billion of its market value being wiped out. Its collapse also served as the catalyst for the purchase of Merrill Lynch by Bank of America in an emergency deal that was also announced on September 15
I would personally like to add that the competition between others banks lead the lehman to risk so that it would be able to raise its market share value. At the end its failure caused serious severe consequences
see this video also.
http://www.youtube.com/watch?v=Jj3ikv4t2n0
One of the major reasons of failure of euro zone is the collapse of Lehman Brothers.
Now we would be discussing the collapse of Lehman Brothers
http://www.investopedia.com/articles/economics/09/lehman-brothers-collapse.asp#axzz1vcQSAgWi
Acc. to the link above the main culprit or the reason behind the collapse of the Lehman Brothers is the US housing.The bank acquired five mortgage lenders, including subprime lender BNC Mortgage and Aurora Loan Services, which specialized in Alt-A loans (made to borrowers without full documentation). Lehman's acquisitions at first seemed prescient; record revenues from Lehman's real estate businesses enabled revenues in the capital markets unit to surge 56% from 2004 to 2006, a faster rate of growth than other businesses in investment banking or asset management. The firm securitized $146 billion of mortgages in 2006, a 10% increase from 2005. Lehman reported record profits every year from 2005 to 2007. In 2007, the firm reported net income of a record $4.2 billion on revenue of $19.3 billion
The situation became more vulnerable as its market shares fell by 48% resulting in one more Wall Street failure .
Conclusion
At the end i would like to conclude Lehman's collapse roiled global financial markets for weeks, given the size of the company and its status as a major player in the U.S. and internationally. Many questioned the U.S. government's decision to let Lehman fail, as compared to its tacit support for Bear Stearns (which was acquired by JPMorgan Chase) in March 2008. Lehman's bankruptcy led to more than $46 billion of its market value being wiped out. Its collapse also served as the catalyst for the purchase of Merrill Lynch by Bank of America in an emergency deal that was also announced on September 15
see this video also.
http://www.youtube.com/watch?v=Jj3ikv4t2n0
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