Lehman Brothers Survived 158 Years. It Didn't Survive One Weekend.

The story

On September 15, 2008, Lehman Brothers filed for bankruptcy with $639 billion in assets, the biggest bankruptcy in American history. The firm had lived through the Civil War and the Great Depression. It didn't survive one weekend in 2008.

This is the story of a small Alabama store that became a giant of Wall Street: the cotton trade, the housing bet, borrowing at 30 to 1, the Repo 105 accounting trick, and the weekend nobody came to the rescue.

Three lessons

1. 1

   Borrowing makes everything bigger, the wins and the losses. At thirty to one, there is no room for mistakes.

2. 2

   If you have to hide a number, the number is the problem.

3. 3

   History is not protection. A hundred and fifty eight years of reputation disappeared in one weekend.

Chapters

1. 0:00Intro
2. 0:33Three brothers
3. 1:07Wall Street
4. 1:36Sold and set free
5. 2:04The housing bet
6. 2:46Thirty to one
7. 3:25The weekend
8. 4:19The aftermath
9. 4:56Three lessons

Sources

Every fact in this file is checked against published sources before release. See our standards.

• History.com, Lehman Brothers collapses (1844 founding, $639B assets, $613B debts, 25,000 employees, five mortgage lenders, $111B real estate assets, Dow fell 500+ points, Barclays)
• Harvard Business School Baker Library, Lehman Brothers: general merchants to commodities brokers (Henry, Emanuel and Mayer Lehman, cotton, New York Cotton Exchange)
• The Saturday Evening Post (2019), Lehman Brothers: the company that nearly bankrupted America ($360M sale in 1984, 1994 spin-off, roughly 30 to 1 leverage, 45% share drop)
• EBSCO Research Starters, Collapse of Lehman Brothers ($2.8B loss in June 2008, Bear Stearns)
• Mail & Guardian (2010), Lehman's illegal gimmicks (Repo 105, up to $50B, examiner's report)