Lehman Brothers Essay

710 Words3 Pages
Lehman Brothers
On September 10, 2008, Lehman Brothers announced the lowest decline as the shares dropped to 45%. It left the market value at $5.4 billion after the Korea Development Bank rejected to make an investment deal that could rescue Lehman. The company would seek capital from other investors in order to recover their financial situation. These efforts faltered and the situation grew more severe, even after the US government had already saved the Bear Stearns and Fannie Mae and Freddie Mac. Though it is less likely that the US government will keep Lehman's bailout, there should be a resolution from the Federal Reserve System to bolster Lehman’s finance so as to prevent the US economic declination.

II Problems and
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It is likely that this time the government would not provide taxpayer funds to back up Lehman.

III Conclusions
Since the decline in stock continued, Lehman sought for solutions by selling their asset management division, reducing dividends, and laying off employees. They also thought of splitting their commercial mortgage assets with the new company. However, it seems as though that would not be sufficient enough for them to recover their financial situation. Even if Lehman would sell their whole firm to the new investor, it would be impossible without the support from the Federal Reserve System.
However, if the US government decides to help Lehman with taxpayers’ money, including those amounts paid by Idaho citizens, this case will become a practical joke. The other investment institution will consider that they can invest on risky business without worrying about the business failure, since there will be money support from the government. I agreed that the government should rescue Lehman since their collapse will have a huge effect on US economy, but utilizing taxpayers’ money is not the right way to support a personal business. Instead, the government could help Lehman by endorsing Lehman’s business deal with international firms that have sufficient funds to rescue the collapsing business. The Idaho citizens can be assured that the US government won’t

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