Week09+-+Ch15+-+Case+the+end+of+wall+street

Week09+-+Ch15+-+Case+the+end+of+wall+street - The End of...

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The End of Wall Street
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2 A Hectic Monday – Sep 15 2009
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3 Black Monday for Wall Street http://online.wsj.com/article/SB123051066
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4 Source: WSJ Market Data Group Lehman’s Stock Performance Friday Close: $3.65, down 94.4% off the price one year ago
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5 Lehman’s Business Source: Lehman’s 2007 annual report http://www.lehman.com/shareholder/10k10q/pdf/lbhi_10k_07.pdf
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6 Lehman’s Profile
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7 Business Model of Wall Street Wall Street o Investing in risky asset o Leveraging up o Relying on short-term funding markets such as commercial paper market and repo market
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8 Subprime Mortgage Crisis and Liquidity Issue of Lehman August 2007, close its subprime lender, BNC Mortgage: an after-tax charge of $25 million and a $27 million reduction in goodwill First quarter of 2008, report a profit and increase its position in Alt-A mortgages, not as risky as subprime mortgages and not as safe as prime mortgages March 2008, the implosion and rescue of Bear Stearns. The day after Bear Stearns was rescued, Lehman's shares fell as much as 48% during the day before closing down 19%. At the firm's annual shareholder's meeting on April 15, its CEO and Chairman Richard Fuld was optimistic. “I believe the worst of the impact to the financial markets is behind us. That does not mean it's over. But this country's economy will need a number of quarters to
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Week09+-+Ch15+-+Case+the+end+of+wall+street - The End of...

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