大而不倒

Lehman used a high-leverage business model that required it to raise billions of dollars every day to keep the doors open. In 2006, it had invested heavily in high-risk real estate and subprime mortgages. When these markets turned south, Lehman couldn’t raise enough cash to stay in business.

❶ How the Government Tried to Save Lehman Brothers？

The U.S. Treasury had no legal authority to invest capital in Lehman Brothers, as Congress hadn’t yet authorized the Troubled Asset Relief Program.

❷ Causes of Lehman’s Bankruptcy:

⑴ Risk. The bank had taken on too much risk without a corresponding ability to raise cash quickly. ⑵ Culture. Management rewarded excessive risk-taking. ⑶ Overconfidence. The firm relied on complicated financial products based on quick real estate growth just as the real estate market began to decline. ⑷ Regulator Inaction. The Securities and Exchange Commission and other regulators didn’t take action.

❸ How the Bankruptcy Affects You Today?

Millennials are those born between 1981 and 1996.

The recession’s impact on Millennials is striking when compared to previous generations at the same age.

⑴ They have less wealth. ⑵ They have more student debt.

⑶ They are more likely to live with their parents.⑷ They are slower in forming families.