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 Posted: Mon Sep 29, 2008 11:01 pm Subject: Reason of Lehman Brothers bankruptcy? |
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What's the reason of Lehman Brothers bankruptcy?
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Leahman bros distressed
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| Posted: Mon Sep 29, 2008 11:12 pm Subject: |
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I will say it is the greed for supernormal profit that led this giant to become banckrupt in 2008. But let me mention here that this institution of 158 years sailed safely during the 1930's Great Depression. Name of this supernormal greed is nothing but subprime lending. I hate this lending because it helps us to get possession of our own house (a dream come true) even if my credit is not upto the mark but snatches away our dream when we fail to repay its high interest rate.
This crooked financial practice of subprime lending back fired when the housing market collapsed due to glut in real estate.
Collapse of Lehman brothers is the fall out of subprime mortgage crisis.
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enlightened
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| Posted: Sun Oct 12, 2008 10:32 am Subject: |
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And let me add that subprime lending led to Payday loans, and nuff said on that one...
I would add to the previous answer and say not only greed, but people being rewarded handsomely for incompetence!
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kscornell
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| Posted: Sun Oct 12, 2008 10:36 am Subject: reply |
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amen to both enlightened and kscornell.that about sums it up.
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paulmergel
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| Posted: Sun Oct 12, 2008 12:25 pm Subject: |
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I think a lot of this stemmed form the post 9/11 crisis. Remember, in 2002, you could finance a car for 0% apr, home purchases were down so the ARM and $0 down mortgages became readily available. Now, the stock market has lost 21% of it's value (7.1 Trillion) in a year and the everyday consumer is now paying for the shortsightedness of the greedy companies like Lehman, AIG, etc. On a brighter note, gas in my area is below $3 a gallon. As long as gas prices keep dropping, everyone's disposable income will increase. I think that will do more for the economy in general than $700 billion given to bail out these companies for their bad business decisions.
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NASCAR_Devil
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