Lehmann Crash ...It is a sworded tale of greed and "Something like fraud, but not quite fraud " (Your honour)... and the unerring desire for "Something for nothing."
Lehmans and others were doing a mrvellous job in the new idea (late70's) of "Securitisation."
This is like selling everything you own right now for a figure today... The risk being to the buyer that the value of your possessions might go up or down, but they take the risk and you have SECURITISED yourself!
Now, Lehmans were into the Hardcore-eco-fetish scene that was Mortgage securitisation... They lended to everyone and anyone (NINJAS) regardless (or recklessly) and then bundled all these dodgel loans into a big pile and sprinkled them with a few choice loans from AAAAAA+ Lenders (The biggest problem at the moment is that nobody can be given a rating anymore as confidence has collapsed in some of the most basic requirements of economics due to this carry on ANYHOW)
These mixed bags of loans were then "Valued" by contractors that were paid by Lehmans say and their valuations were believed by all and regulated by none.
These "mixed-bags" were then sold to investers everywhere (different risk investments Etc. And everyone was riding on a wave of euphoric self-fulfilling stupidity...
Lehmans swallowed the hype that they themselves were manufacturing as they watched these "investments" grow and prove very profitable... So much so, that they began to invest in their own "Mixed-bags" themselves....
It was all built up and up... LEND MORE, SECURITSE MORE and INVEST MORE!
A winning paradigm!
Until...
some of the mixed bags turned out to contain semtex (NINJA lending coming home to roost) and then that was that... Lehmans had bought so many of their own toxic semtex bags that there was no chance of it raising enough capital to cover itself... The CEO did have a chance to sell Lehmans, but he decided for his own reasons to scuttle! (Arrogance?)
Anyhow, these toxic debts are everywhere now, all...