Between the Lines Book Club will be meeting on March 23rd at Arden Dimick Library from 10:30-12. Our book this month is Behold the Dreamers, by Imbolo Mbue.
Behold the Dreamers involves the collapse of Lehman Brothers and the effect this collapse has on its executives and their employees. Here’s a refresher on the collapse of Lehman Brothers, which was liquidated in 2008.
Lehman Brothers was founded in 1844 by immigrants from Bavaria. First based in Chicago, the company’s headquarters moved to New York in 1870. Lehman Brothers grew to the point of being the fourth-largest investment bank in the US. In 1997, they entered the business of mortgage origination, which is “the process by which a lender works with a borrower to complete a mortgage transaction, resulting in a mortgage loan “(Wikipedia).
According to my best friend, Wikipedia, Lehman Brothers filed for bankruptcy in 2008. IT was the largest bankruptcy filing in US history. Essentially, Lehman Brothers had become a hedge fund as opposed to an investment bank, and the subprime mortgage crisis wiped out its capital. The bankruptsy has massive repercussions for the economy, yet the company’s head executive walked away with 480 million dollars (the amount is contested). Executives continued to reap multimillion dollar bonuses right up until the proceedings concluded.
According to Wikipedia:
Lehman’s bankruptcy was the largest failure of an investment bank since Drexel Burnham Lambert collapsed in 1990 amid fraud allegations. Immediately following the bankruptcy filing, an already distressed financial market began a period of extreme volatility, during which the Dow experienced its largest one day point loss, largest intra-day range (more than 1,000 points) and largest daily point gain. What followed was what many have called the “perfect storm” of economic distress factors and eventually a $700bn bailout package (Troubled Asset Relief Program) prepared by Henry Paulson, Secretary of the Treasury, and approved by Congress. The Dow eventually closed at a new six-year low of 7,552.29 on November 20, followed by a further drop to 6626 by March of the next year.
In other words:
What. A. Mess.