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lehman 9/16
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What Have We Learned 7 Years After Lehman Collapse?
Sep 15, 2015 | Bloomberg
Saxo Bank Chief Economist Steen Jakobsen discusses global debt, central banks policies and the state of banking and financial services seven years after the Lehman Brothers collapse. He speaks on "Bloomberg Surveillance. -
Seven years ago today
Sep 16, 2015 | MSNBC
By Steve Benen
...But on Sept. 15, 2007 – exactly seven years ago today – Lehman Brothers collapsed, effectively lighting the match that started the Great Recession, the worst global economic crisis in generations. A great deal has happened in the years since, but seven years ago, conditions were genuinely terrifying. It wasn’t long after Lehman’s demise that a whole lot of Americans wanted to know when the economy would improve, how the economy would improve, and even whether the economy would improve. -
Remember the lessons of Lehman’s collapse
Sep 15, 2015 | The Hill
By Senator Sherrod Brown
Seven years ago today, the investment bank Lehman Brothers filed for bankruptcy. A day later, behemoth insurance conglomerate AIG was bailed out by taxpayers. Together, these actions helped sink our financial markets and push our country’s economy into an abyss. No one could see the bottom. -
World’s biggest banks in fine fettle seven years on from Lehman disaster
Sep 15, 2015 | The Telegraph
By Tim Wallace
Banks have at long last built up their balance sheets with enough surplus cash to survive a future downturn – seven years on from the calamitous collapse of Lehman Brothers and the onslaught of the financial crisis. -
Lehman Anniversary Reminds Us Change Needed at SEC
Sep 15, 2015 | Huffington Post
By Becky Bond
The collapse of Lehman Brothers seven years ago today was the signature moment in a financial crash brought on by recklessness, greed, and outright fraud. Every year since, the anniversary of the Lehman collapse has offered us the opportunity to ask whether we have learned this lesson.
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
Lehman Brothers Anniversary Coverage
Full Text of Stories Below
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What Have We Learned 7 Years After Lehman Collapse?
Sep 15, 2015 | Bloomberg
Saxo Bank Chief Economist Steen Jakobsen discusses global debt, central banks policies and the state of banking and financial services seven years after the Lehman Brothers collapse. He speaks on "Bloomberg Surveillance.
Video can be accessed here: http://www.bloomberg.com/news/videos/2015-09-15/what-have-we-learned-7-years-after-lehman-collapse-
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Sep 16, 2015 | MSNBC
By Steve Benen
Technically, the last U.S. recession began in December 2007, but in the first few months of the downturn, the effects were fairly modest – the economic contraction wasn’t especially significant, and though the economy was losing jobs, the totals were nowhere near crisis levels.
But on Sept. 15, 2007 – exactly seven years ago today – Lehman Brothers collapsed, effectively lighting the match that started the Great Recession, the worst global economic crisis in generations. A great deal has happened in the years since, but seven years ago, conditions were genuinely terrifying. It wasn’t long after Lehman’s demise that a whole lot of Americans wanted to know when the economy would improve, how the economy would improve, and even whether the economy would improve.
Jason Furman, the chairman of the White House Council of Economic Advisers, wrote a persuasive piecefor the Huffington Post today, noting that the response to the crisis from U.S. officials really did turn “a depression-like shock into a six-year expansion.”
[T]he onset of the Great Recession was more severe across a wide range of measures than the Depression itself – including substantially larger losses in wealth, a significantly larger contraction in global trade, and a comparable reduction in employment and private demand. In these ways the economy in late 2008 looked like it could have been on track for an outcome comparable to the Great Depression.
But an aggressive public policy response from a wide range of actors promoted aggregate demand and helped rescue the financial system. Over the course of just a few months after taking office, President Obama worked to shore up the U.S. financial system, rescue the auto industry, and pass a Recovery Act and more than a dozen subsequent fiscal measures that provided vital support to families and businesses. Since the crisis, the President has taken continued steps – including Wall Street reform – to strengthen our economy and protect against future downturns.
This decisive policy response helped the economy return to growth only six months after the President took office and made the United States among the first advanced economies to recover its pre-crisis output per capita. Today, those economic indicators that had collapsed in early 2009 have surged above pre-crisis levels and continue to improve.
I can appreciate why many Americans aren’t yet satisfied with the domestic economy, and it’s hardly controversial to argue that we’re not yet where we’d like to be.
But on days like today, it’s worth pausing to appreciate the fact that conditions like the ones we see today – the fastest jobs growth since the 1990s, for example – were simply unimaginable on Sept. 15, 2008. The very idea that we’d see an economy that created 8 million jobs in three years, pushing the unemployment rate from 10% to 5.1%, seemed like a fantasy amid catastrophes like the Lehman bankruptcy.
And yet, here we are. As the economy was falling off a cliff, congressional Republicans demanded a five-year spending freeze – thanks again for the great advice, guys – but thankfully, they were in the minority. Thanks to policies such the Recovery Act, the United States was able to turn the economy around faster than even most optimists predicted.
Of course, Lehman’s collapse unfolded against the backdrop of a presidential campaign, and as we reflect on what’s transpired in the years since, we find ourselves with an unexpected scenario: another presidential campaign, this time, with two prominent candidates who worked with … wait for it … Lehman brothers.
As we discussed a few months ago, Ohio Gov. John Kasich (R), after he left Congress, went to work at Lehman Brothers. In fact, he was there in 2007 and 2008 – an era that proved to be quite eventful.
Asked in June whether he has any regrets from his tenure at Lehman, the Republican presidential candidate responded as if the question were ridiculous. “Are you kidding? Regrets? I thought it was a fantastic time,” Kasich said.
Remember, he was a Lehman executive when the firm made the biggest bankruptcy filing in the history of the United States.
Of course, Kasich isn’t alone. I’m reminded of this recent Wall Street Journal piece:
[Former Gov. Jeb Bush] signed on with Lehman after leaving the Florida governor’s mansion, making it clear he wanted work as a hands-on investment banker rather than hold a ceremonial role typically given ex-politicians. […]
Full text and video can be accessed here: http://www.msnbc.com/rachel-maddow-show/seven-years-ago-today
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Remember the lessons of Lehman’s collapse
Sep 15, 2015 | The Hill
By Senator Sherrod Brown
Seven years ago today, the investment bank Lehman Brothers filed for bankruptcy. A day later, behemoth insurance conglomerate AIG was bailed out by taxpayers. Together, these actions helped sink our financial markets and push our country’s economy into an abyss. No one could see the bottom.
Lehman’s collapse – the largest corporate bankruptcy in U.S. history – followed a decade of predatory lending, Wall Street recklessness, and lax supervision by regulators. The subsequent meltdown in the financial markets triggered a crisis that left America’s economy hemorrhaging more than 750,000 jobs a month. By the time we hit bottom, nine million jobs vanished, the unemployment rate soared to 10 percent, and five million Americans lost their homes.
The crisis – the worst since the Great Depression – took a devastating financial and psychological toll on a generation of working Americans. Families that were struggling to invest in their children’s education or set aside money for retirement saw years of hard work evaporate as $13 trillion in household wealth was extinguished.
Congress responded by passing the most significant financial reforms in generations. The Dodd-Frank Wall Street Reform and Consumer Protection Act put in place new rules to bring stability to the markets, ensure strong consumer protections, and crack down on the reckless and irresponsible behavior that helped fuel the disaster.
Seven years after Lehman’s demise, we have a financial system that is safer, more stable, and that works better for taxpayers, investors, and consumers.
Wall Street reform targeted the risky behavior that rewarded Wall Street executives with multi-million dollar bonuses as our economy spiraled into freefall. The law makes it less likely that taxpayers will once again be left to clean up Wall Street’s mess by footing the bill for another bailout. Its oversight council – supported by industry leaders and regulators appointed by both presidents Bush and Obama – is designed to fill gaps in the regulatory framework and create a forum for agencies to identify risks and resolve issues.
Unfortunately, the Wall Street lobby has changed its tune and is working with its allies in Congress to thwart the council’s ability to do its job. As soon as the bill was signed into law, a top financial services lobbyist said, “Now it’s half-time.” Then they went back to work.
In a May party-line vote, Senate Republicans on the Banking Committee approved a sweeping financial deregulation package that would roll back key provisions of Wall Street reform. It would take us back to a time when no entity was responsible for watching over the entire financial system.
Senate Republicans are now working to move their overreaching bill through the appropriations process, potentially risking a government shutdown in the name of financial industry deregulation. This move – unprecedented in its scale – shows that Republicans will try to slip it through Congress any way possible with as little debate as possible.
In hearing after hearing, Republican members of the Banking Committee and industry lobbyists push for legislation to undermine the new financial rules. In some cases, they argue those safeguards are hurting our economy. It's stunning how they've either forgotten or are oblivious to how much pain the financial meltdown caused to millions of Americans and our economy. Listen to them long enough, and one could be forgiven for thinking we never even had a crisis.
This sort of collective amnesia may reflect just how far we’ve come. Since Wall Street reform’s enactment, the private sector has created 12.8 million new jobs. Household net worth has grown by about $30 trillion, exceeding pre-crisis levels. Business lending is up more than 30 percent. And the banking industry had the highest quarterly earnings ever recorded in the second quarter of 2015.
Wall Street reform isn't perfect – some believe that it should have been stronger – and I've led the charge to fix portions of the law that weren't working. But that doesn't mean we should return to the days of Lehman, AIG, and Countrywide...
Full text: http://thehill.com/blogs/congress-blog/economy-budget/253559-remember-the-lessons-of-lehmans-collapse
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World’s biggest banks in fine fettle seven years on from Lehman disaster
Sep 15, 2015 | The Telegraph
By Tim Wallace
Banks have at long last built up their balance sheets with enough surplus cash to survive a future downturn – seven years on from the calamitous collapse of Lehman Brothers and the onslaught of the financial crisis.
The 100 biggest international banks have poured hundreds of billions of euros into their coffers to create capital buffers strong enough to prevent a downfall in the event of another financial crisis.
They’ve managed to plug a €500bn funding hole identified by regulators back in 2011, by stripping high risk assets from their books, cutting lending to unreliable customers and using profits to beef up their capital buffers.
At the end of last year, these banks were just €6.5bn short of buffer targets set by regulators. That was down from a shortfall of €18.6bn six months earlier, and €57.5bn in the middle of 2013, according to the international regulators on the Basel Committee on Banking Supervision in Switzerland.
The €6.5bn figure is small compared with their combined profits: the top 100 banks made a profit of €228.1bn in the six months to the end of 2014. This means that the sector as a whole has more than enough capacity to set aside additional money to regulatory targets.
Smaller banks are also on track to plug their capital hole. The 121 lenders studied by the regulators need a further €1.5bn to satisfy targets.
However, this does not mean banks are entirely in the clear.
Regulators across the UK, EU and USA run regular stress tests, which simulate a bank’s ability to withstand a financial crisis.
The Bank of England is currently putting British banks through their paces against a fictional crisis which includes a sharp slowdown in the Chinese economy. It follows last year’s stress tests, which focused on a housing market crash in the UK...
Full Text: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11866120/Worlds-biggest-banks-in-fine-fettle-seven-years-on-from-Lehman-disaster.html
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Lehman Anniversary Reminds Us Change Needed at SEC
Sep 15, 2015 | Huffington Post
By Becky Bond
The collapse of Lehman Brothers seven years ago today was the signature moment in a financial crash brought on by recklessness, greed, and outright fraud. Every year since, the anniversary of the Lehman collapse has offered us the opportunity to ask whether we have learned this lesson.
In the case of Securities and Exchange Commission (SEC) Chair Mary Jo White, the answer is clearly, “no.” Today, Mary Jo White represents a pre-Lehman mentality of deference to Wall Street – and it is long past time for her to go.
In an era when we need strong regulators reining in corrupt and out-of-control companies, White’s SEC is most famous for its dysfunction and for granting “get out of jail free” waivers to criminal banks.
The Project on Government Oversight (POGO), a respected government watchdog group, recently sent a letter to President Obama requesting that he ask Mary Jo White to step down as chair of the SEC, and designate a new head of the agency. As POGO put it, “White’s views have often aligned with those of her former Wall Street clients.” Sen. Elizabeth Warren penned White a scathing letter expressing deep disappointment and accusing the SEC chair of deliberately misleading her in a meeting.
The revolving door between Wall Street and government has once again produced a regulator who serves the interests of financial institutions, not everyday Americans.
The Securities and Exchange Commission under White’s leadership has settled the majority of its cases without requiring companies to admit guilt. Her track record better resembles the Mary Jo White who encouraged prosecutors to “moderate” their enforcement actions than the Mary Jo White who in her confirmation hearings promised to secure admissions of guilt.
The SEC has also become broken and dysfunctional, with White’s office known as “the cheese cellar: It’s where policy goes to age.” White’s history as a Wall Street defense attorney, and her husband’s current job as a corporate lawyer, has led to a frequent need to recuse herself from scores of cases. With only five voting commissioners, her multiple recusals result in gridlock and lighter punishments for corporate wrongdoing.
White’s whole-hearted embrace of the revolving door includes multiple former bank executives working as high-level SEC officials. She recently hired the former general counsel of Goldman Sachs, Andrew “Buddy” Donohue, for the influential role of her chief of staff.
Perhaps most gallingly, White’s SEC has routinely and automatically granted waivers to allow corporations that have admitted to criminal violations to keep their “trusted” status as issuers of securities and guardians of investments. She has frequently quarrelled with Commissioner Kara Stein, who objects to these “get out of jail free” waivers, and reportedly pushed President Obama to nominate a new SEC commissioner who might “dilute” Stein’s influence...
Full Text:
http://www.huffingtonpost.com/becky-bond/lehman-anniversary-remind_b_8136556.html
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Lehman Brothers Anniversary Coverage
Full Text of Stories Below
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