While “Before the Fall: Lehman Brothers 2008” is a Harvard Business School case, it features several lengthy direct quotes from Erin Callan, the CFO of Lehman Brothers. The case contains the direct responses given by Callan during a CNBC interview in April, 2008. Callan faced questions regarding Lehman’s need to raise additional capital that spring following the acquisition of Bear Stearns by JP Morgan a month before. The reason Lehman needed to raise capital was that they were facing a liquidity crisis as the housing bubble began to burst. There was balance sheet was loaded with mortgage-backed securities and CDOs, which were now failing as a result of the subprime mortgage crisis.
Callan’s responses during the interview further drive home the fact that Lehman was seriously in trouble. In hindsight, its clear that the prestigious firm was falling hard in the wrong direction. However, at the time Lehman’s struggles were looked at more as a bump in the road, not the tip of the iceberg of the Great Recession. The interview supports my argument that Lehman was facing a serious crisis, which was caused by extremely risky mortgage investments.
The information is certainly reliable, as it comes directly from the transcript of Callan’s CNBC interview. It emphasizes the severity of Lehman’s situation, foreshadowing the end of the firm that would come just 5 short months later.
Rose, Clayton S., and Anand Ahuja. “Before the Fall: Lehman Brothers 2008.” Harvard Business School (2011)
Too Big to Fail, by Andrew Ross Sorkin, is a 2009 novel that focuses on the events leading up to the demise of the financial industry in September, 2008, and the actions that were taken by the Federal Reserve in the months that followed. Too Big to Fail begins in March, 2008 with the acquisition of Bear Stearns by JP Morgan with the help of the Fed. The novel supports current thinking about the financial crash, and it does so in tremendous detail. As a result, the reader gets an excellent feel for exactly what went down in the months leading up to the crisis, specifically the crash of Lehman Brothers and merger of Merrill Lynch and Bank of America.
Current thinking generally focuses on how the Fed “let Lehman fail”, despite the prestigious firm potentially being “too big to fail.” However, the novel goes in depth about exactly what happened behind closed doors leading up to Monday, September 15th, 2008, when Lehman collapsed. Sorkin supports my broader goal of showcasing a systemic problem with the financial industry as a result of deregulations that took place in the decades before. He highlights the extensive risks investment banks were taking, which enhances my argument.
Sorkin is a renowned journalist who was won many awards over his young career. Working for the New York Times and CNBC’s Squawk Box, he has established a history of credibility and consistency regarding financial reporting. He is a credible source who greatly improved the evidence featured in my White Paper report.
Sorkin, Andrew Ross. Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis–and Themselves. New York: Viking, 2009.
This source is the conclusions drawn from the Financial Crisis Inquiry Commission (FCIC) in 2011. The FCIC focused on the causes of the Great Recession in 2008. Currently, most people pin the blame of the financial crisis on Wall Street, the investment banks, and their irresponsible tactics. The conclusions drawn by the FCIC further added to this popular belief. The FCIC concluded that there was a systemic breakdown in accountability and ethics. Additionally, there was an erosion of standards of responsibility and ethics that exacerbated the decline of Lehman Brothers and the onset of the financial crisis (FCIC 22).
The topic of my White Paper revolved around the deregulation leading up to the Great Recession in 2008, the financial crisis itself, and then the regulation that resulted from it. The FCIC report brings light to the irresponsible actions the investment banks were taking leading up to the Great Recession. The irresponsible actions were made possible through significant deregulations of the financial industry beginning with the Reagan Administration in the 1980s and running through the late 1990s. Therefore, the FCIC report strongly supports a significant portion of my report.
Lastly, the FCIC conclusions report serves as an extremely reliable source. Put into place by the government itself, the FCIC served as a neutral third party evaluator of the causes of the Great Recession.The FCIC may not have drawn light on many previously unknown causes, but it did strongly support the preconceived notions and ideas that had been put in place.
Conclusions of the Financial Crisis Inquiry Commission. Financial Crisis Inquiry Commission, 2011.
So my idea centers around beer stores that deliver. Specifically, I’m focused on two local beer distributors here in Lewisburg: Bison Beverage and Beer Barn. Neither of these two stores deliver at the moment, but I think there is huge upside available for them if they do. Continue reading Beer Delivery?
In September, 2008, a financial crisis not seen in the United States since the Great Depression swept the nation. Some of Wall Street’s biggest firms, such as Goldman Sachs, Merrill Lynch, Lehman Brothers, and Morgan Stanley, faced serious financial issues that threatened the future and longevity of the renowned institutions. Continue reading The Unethical Decisions Behind the Collapse of Lehman Brothers
No, I was not named for the unforgettable 12th President of the United States Zachary Taylor. I’ve never really considered the origins of my name before, so this assignment allowed me to do some digging to learn more about it. My parents had decided that if I was a boy, my name would be Zack, and if I was a girl my name would be Caroline. My dad wanted to name me Bruce after Bruce Springsteen, but my mom shot that one down pretty quick. Continue reading Zachary Taylor Fisher
Background: I remain very interested in the Nike case. It seems as though Nike has not fully resolved the conflict they face between cutting costs and treating workers fairly. Despite the many improvements the company has made after their fiscal struggles in 1998, I still am very skeptical that Nike is producing their apparel in the most morally correct fashion. The problem may not be nearly as bad as it was in the late 1990s, but I think a problem with worker exploitation still exists for the company. Nike sponsors many elite college athletic programs, including the Florida State football team, which won the National Championship last January. I wondered what would happen if I discussed the issue of Nike exploiting workers with a Florida State player. Continue reading So What do the Players Think?
First off, I was on the Blog Council last week, so I’ve known we were going to do this prompt for almost a week a now. And ever since I knew about the prompt, I’ve been fighting the knee jerk reaction to do one of my favorite athletes, musicians, or entertainers. Continue reading Seinfeld