After the news of Lehman Brothers going bankrupt, the US stock market plunged even more.
Lehman Brothers applied for bankruptcy protection, but this does not mean that Lehman Brothers will go bankrupt. Many companies that applied for bankruptcy protection completed restructuring or found new investors during the protection period, so they did not really go bankrupt.
But Lehman Brothers is different. Although they are trying to restructure, they do not have new investors. Barclays and Bank of America had expressed interest in Lehman Brothers, but after negotiations, they realized it is not worth investing.
Too much debt and too little quality assets. They cannot see the possibility of turning losses into profits in a short period. It might not even be possible in three to four years.
Three to four years, and such a large investment is too risky. Also, it will span two US administrations. Will the policies promised by George W. Bush continue to be implemented by the next president?
All these cannot be guaranteed, and they still need to take out a lot of cash. Especially when they do not have enough cash, they gave up.
The shareholders of Lehman Brothers thought that the US government would help them and take them over.
The US government had taken over Bear Stearns and Fannie Mae and Freddie Mac. Why can't Lehman Brothers do the same?
However, to the great disappointment of the investors, the US government really didn't care about the company's survival. They just watched the once brilliant investment bank go bankrupt.
One reason is that the US government is out of money, and they cannot afford more pressure. The US government is also unwilling to let Wall Street investment banks transfer their business risks to the US government.
Saving Bear Stearns had made the US government discover many problems. If they save Lehman Brothers, will they take care of the other investment banks that applied for bankruptcy protection?
If they take over all of them, the US government will go bankrupt!
This morning, there was an interesting scene at the entrance of Lehman Brothers. It is not working hours yet, but many people poured into the building.
What is different from the past is that most of them are carrying briefcases, laptops, etc. But this time, many of them are carrying suitcases, and each of them is bigger than the previous one.
Some of them not only brought suitcases, but also empty backpacks, cardboard boxes, etc. What are they doing here? Moving stuff?
The company is bankrupt, and many of them still have not paid their salaries. Moreover, after bankruptcy, they would have to leave the office. Everyone's office more or less had their own personal belongings.
All the important documents in the company had been taken away. Even the computers that recorded important information had been taken away. However, there were still many valuable things in the company, such as a printer.
These people lost their jobs. From this day on, they would no longer receive a penny of salary from Lehman Brothers Bank. Even the salary they owed them before could not be received.
Many people's frustration was written on their faces, and some even had anger on their faces.
However, when they left the company, everyone's suitcases were filled with things. At this time, even an extra pen was an item that could be exchanged for money.
And no one cared about these illegal actions at all.
Lehman Brothers used to be treated very well, and many managers were also middle class. But like many middle-class people, they want to live the life of a rich man. They want to retire early and enjoy life.
They were all managers, and they will invest in their own company's financial products. This was a good choice.
But when the company went bankrupt, their investments were gone. Many of the bonds in their hands had become a piece of scrap paper. Moreover, many of the bonds were bought at a higher value than they were worth.
Also, the company's shares they owned had made many people lose their money. Some people even began to cry the moment they walked out of the company.
They had lost hope in life, and some even felt despair. They had to support their wives and children, repay their loans, and many other living expenses. This was not something they could get by simply saving money.
The government had taken over Bear Stearns, Fannie and Freddie, and even helped Bank of America to acquire Bank of Merrill Lynch. The government had helped many companies overcome their difficulties. Why did they leave Lehman Brothers Bank alone?
Many people hated the US Treasury Secretary and George W. Bush. They felt that it was because of the government's discriminatory treatment that led to their current situation.
During this period, it was very difficult for bank managers to find a job as many banks were laying off their employees.
They were different from those who were laid off. Those who were laid off still had a high compensation package, but they did not even get their salaries!
Wall Street's financial dream was shattered, and so were those who had lost their jobs and had invested in those companies.
No matter if they had invested in those companies' shares, bonds, or other financial products, they were all losing money.
These innovative investment banks and fund companies had fallen into a quagmire and could not get out. On the contrary, the most traditional fund companies began to take the opportunity to make more profits.
For example, many fund companies specialize in investing in stocks, gold, oil, and other energy resources. Although these companies have suffered a lot from the fluctuations in the financial market, they can stop their losses in time and make money.
This was also the reason why, after one year in Feng Yu's previous life, the ranking of fund companies in the US, and even the world, had changed greatly. Those who had chosen the right path had all grown stronger. Those who had chosen the wrong path had lost a lot of money, and some had gone bankrupt!
After Lehman Brothers went bankrupt, the US stock market started to plummet. The United States would no longer have any investment banks. Wall Street was finished. Such comments were all over the media.
Lehman Brothers Bank was abandoned by the US government. In addition, Feng Yu had gotten someone to spread the news that the US government had run out of money, causing panic in the US stock market.
Many people started to dump their shares frantically. No matter how low the price is, as long as they can sell their shares. Many people had not seen so many listed companies going bankrupt and liquidating suddenly. At this time, creditors had priority, and their shares had become worthless.
Many people even said that if they could sell their shares now, they would have made a profit.
At this time, many fund companies also started to short the US stock market. They do not care if the stock market will crash, as long as they can make profits, that is the way to go.
When the US stock market experienced a precipitous decline and seemed to be unable to stop, the Chairman of the US Securities and Exchange Commission, Christopher Cox, appeared.
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