Blog 5: Lehman Brothers
Oct 4th, 2010 by Andy Mao
After our last COM 101 class, I was tempted to do more research about the risks for financial investments. One of the biggest reasons behind our 2008 recession is caused by the bankruptcy of the Lehman Brothers. During the month of May, shareholders were constantly selling their shares. As more and more people sold their shares, the Lehman Brother’s share value went up and down drastically. By the end of that week, Lehman Brothers were losing 8 million dollars a minute.
The big question is what were the significant effects to the rest of the world? Lehman Brother was one of America’s oldest and largest banks. Its bankruptcy not only caused negative effects to the banking industry but also caused a big unemployment. Thousands of people lost their job and it also helped push the United Kingdom into recession.
This is an example of the risks behind share-holders. The share-holder only gains money if the stock is raising its value, but there is a maximum point in which it can go up. Sadly the value of the stock went down and thousands of thousands of people suffered over the world.
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sources:
https://www.youtube.com/watch?v=aPOtQkSiCk8
Treanor, Jill. “Banking crisis: Lehman Brothers files for bankruptcy protection.”guardian. N.p., 18/sep/2008. Web. 3 Oct 2010. <http://www.guardian.co.uk/business/2008/sep/15/lehmanbrothers.creditcrunch>.
Joshi , Mohit . “Lehman Brothers’ collapse to be subject of BBC film.” top news. N.p., 19/aug/2009. Web. 3 Oct 2010. <http://www.topnews.in/lehman-brothers-collapse-be-subject-bbc-film-2203702>.