In 2008, Lehman Brothers Holding Company with a history of 158 filed for bankruptcy, which triggered a chain reaction and plunged the credit market into chaos. This accelerated the insurance giant American International Group (AIG) in rolling in the deep, and caused losses to almost everyone, whether it was Norwegian retirees or investors in Reserve Primary Fund, an American money market that was once considered as safe as cash.
Within a few days, the chaos caused by this even made Goldman Sachs Group and Morgan Stanley, the pillars of Wall Street, deeply involved. Shocked American officials rushed to come up with a more systematic solution to the crisis and reached an agreement with congressional leaders on a $700 billion financial market rescue plan on Sunday.
2. Washington Mutual Bank
After the acquisition of DimeBancorp, China Mutual Bank set off a storm in new york. On September 25th, 2008, China Mutual Bank was taken over by the Federal Deposit Insurance Corporation (FDIC).
The reason why China Mutual Bank closed down was that its share price plummeted by 87% in the stock market in 2008, and its credit rating dropped sharply with the share price, resulting in serious losses for the company. However, some time before it was seized and taken over by FDIC, China Mutual Bank tried to find a buyer to alleviate the economic difficulties caused by the financial crisis. Its potential customers include Citigroup, HSBC Holdings, JPMorgan Chase and Wells Fargo.
3. WorldCom, USA
WorldCom, an American communication company, went bankrupt in 2003 due to an accounting scandal.
In a routine capital expenditure inspection in June 2002, the company's internal audit department found financial fraud as high as $3.852 billion, and immediately notified the external audit KPMG (KPMG was newly appointed to replace Andersen as the company's external audit).
On July 2, 2002, the company filed for bankruptcy protection, which became the largest bankruptcy protection case in American history. On April 14, 2003, the company changed its name to MCI and moved its headquarters from Mississippi to Virginia.
Extended data
The impact of Lehman's incident
Stock market:
On September 15, 2008, Wall Street ushered in a veritable "Black Monday", US stocks plummeted, and the Dow Jones index hit the biggest drop point and decline in a single day since the "9. 1 1" incident, and the global stock market also plummeted.
On September 16, 2008, Asia-Pacific stock markets plunged, with Japanese, Hongkong, Taiwan Province and Korean all falling by more than 5%. The Australian stock market was also hit by the earthquake. The Australian dollar weakened at 16, and the stock market closed down more than 1.5%.
international economy
The deeper international impact is that countries' concerns about inflation will be replaced by concerns about austerity. Magnus, a senior economic adviser in UBS Group AG, believes that debt default and falling asset prices will form a vicious chain pressure on the economies of various countries, which will make it difficult for banks to operate and it will greatly increase the difficulty for enterprises to obtain loans. In the end, they will have to use more extreme means such as layoffs and production cuts to tide over the difficulties, which will lead to the global deflation era.
The central banks of all countries, especially emerging countries, will face very severe challenges: on the one hand, the long-term overheating of their own economies makes them afraid to take inflation lightly; On the other hand, the global deflation crisis triggered by the Lehman Brothers incident put them in a dilemma when choosing their own interest rate policies.
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