#oeconomicus_english by the @econoscopejrnl — 5 сентября 2026 г. в 05:11:43.754
#oeconomicus_english by the @econoscopejrnl Did you know that one Bank’s fall started a Global Crisis? 📉 ⏩On September 15, 2008, a famous investment bank went bankrupt. This single event triggered the worst financial crisis since the Great Depression. This is the story of Lehman Brothers: a classic tale of a huge rise and a spectacular fall. From a small store to a Wall Street giant ⭐️It all started with three German immigrant brothers: Henry, Emanuel, and Mayer Lehman. In the 1840s, they opened a small store in Alabama. They traded cotton, and after the Civil War, they moved to New York where everything changed. 💰The company's activities increasingly shifted towards finance: it began to engage in investment operations and trading securities. Over time, Lehman Brothers grew into one of the most powerful banks in the U.S. They helped companies like Sears and even Hollywood studios raise money and grow. But their main business was securitization —bundling many loans together and selling them as one product to other investors. ⚡️In early noughties Lehman Brothers actively expanded its mortgage lending business by acquiring mortgage brokers. By 2008, the bank's mortgage loan volume had reached $680 billion, with capital of only $22.5 billion. This structure made the company extremely vulnerable: a decline in property values of just 3-5% could result in the bank losing all its capital. What went wrong? Three main mistakes caused their collapse: 1️⃣ Too much debt. For every $1 of its own money, Lehman Brothers borrowed over $30. When investments lost value, the company had nothing left. 2️⃣ Bad bets on housing. They invested heavily in "subprime" mortgages: loans given to people with poor credit. When housing prices crashed, those loans became worthless. 3️⃣ Loss of trust. Other banks got scared and demanded their money back. Lehman didn't have enough cash to pay everyone. ➡️And that’s how the crisis started. When housing prices crashed, all those packaged loans became worthless. Banks stopped trusting each other, credit froze, and the whole global economy fell into a deep recession⏬ ✍️ Written by Vasilisa Shevchenko (2-IITSD)