Word: lehmans
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
...certain extent, proprietary trading was the key driving force that was behind the disaster," says Jeremy Berkowitz, a finance professor at the University of Houston. "For whatever the reason, Lehman and other banks decided to take positions in mortgages, and when those positions went south, so did the firms...
Back in 2006, Lawrence McDonald, a former Lehman Brothers bond trader, remembers, he asked an intern what he was doing during the winter break at the now bankrupt investment bank. The intern, who was a junior in college, said he was trading derivatives for the firm. Surprised, McDonald asked the intern the size of his pad - Wall Street-speak for how much of the firm's money he was able to trade - figuring it couldn't be much. The intern's response: $150 million...
...most amazing things," says McDonald, who has since written a book about his time at Lehman, titled A Colossal Failure of Common Sense. "This kid didn't even have a college degree." (See the best business deals...
...intern, of course, wasn't the only one who was risking the firm's dollars. McDonald, himself a relatively junior trader, had a Lehman-funded trading account of $450 million. In the years leading up to the financial crisis, Lehman Brothers built up huge positions in real estate, derivatives and bonds. That all came crashing down in the fall of 2008, when the tumbling housing market and rising mortgage defaults caused the credit markets to seize up. In all, Lehman lost more than $32 billion from proprietary trading and principal transactions during the year and a half leading...
...Lehman wasn't alone. Merrill Lynch lost nearly $20 billion on investments in collateralized debt obligations (CDOs). Morgan Stanley had a nearly $4 billion loss in proprietary trading in the fourth quarter of 2007. Goldman Sachs spent $3 billion to bail out one of its hedge funds. And Citigroup has poured more than $3 billion into fixing its problems with structured investment vehicles, investments the bank set up with its own capital. Like Merrill, Citi lost big - as much as $15 billion, on the CDOs it decided to hold rather than sell off. In fact, nearly every large financial firm...