Discussion 5

Lehman Brothers: The Fall from Grace

Case

Author: Chijioke Oji, Amanda Bowen & Viola Makin

Online Pub Date: March 06, 2016 | Original Pub. Date: 2013

Subject: Business Ethics, Banking

Level: | Type: Indirect case | Length: 5552

Copyright: © 2013 Graduate School of Business Administration, University of the Witwatersrand

Organization: Lehman Brothers | Organization size: Large

Region: Northern America | State:

Industry: Financial service activities, except insurance and pension funding

Originally Published in:

Oji, C. , Bowen, A. , & Makin, V. ( 2013). Lehman Brothers: The Fall from Grace.WBS-2013-01.

Johannesburg: The Case Centre, Wits Business School.

Publisher: Wits Business School

DOI: http://dx.doi.org/10.4135/9781473964174 | Online ISBN: 9781473964174

© 2013 Graduate School of Business Administration, University of the Witwatersrand

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Abstract

On 15 September 2008, Lehman Brothers Holdings Inc. filed for bankruptcy protection at the United States Bankruptcy Court in Manhattan, New York. The news of Lehman's bankruptcy filing sent shockwaves through the United States (US) financial markets, the impact of which was later felt across the world, contributing to the global financial crisis in the same year. As a major American financial institution, Lehman held US$639 billion in assets at the time of its demise, making its bankruptcy filing the largest in the history of the US. Once looked upon as “too big to fail” by financial analysts, a combination of misjudged calculations in subprime lending and commercial mortgage-related investments, coupled with the quest to increase profitability, resulted in the collapse of the bank.

Case

On 15 September 2008, Lehman Brothers Holdings Inc. filed for bankruptcy protection at the United States Bankruptcy Court in Manhattan, New York. The news of Lehman's bankruptcy filing sent shockwaves through the United States (US) financial markets, the impact of which was later felt across the world, contributing to the global financial crisis in the same year. As a major American financial institution, Lehman held US$639 billion in assets at the time of its demise, making its bankruptcy filing the largest in the history of the US. Once looked upon as “too big to fail” a by financial analysts, a combination of misjudged calculations in subprime lending b and commercial mortgage-related investments, coupled with the quest to increase profitability, resulted in the collapse of the bank.

Background on Lehman Brothers

In 1850, a trio of German immigrant brothers – Henry, Emmanuel and Mayer Lehman – who had set up a grocery and dry goods store in Montgomery, Alabama, US, began bartering cotton with their customers as payment for goods purchased. 1 They called their store Lehman Brothers and, within a few years, became renowned commodities traders specialising in cotton, which dominated the American economy at that time. 2 After the Civil War ended in 1865, Lehman Brothers moved to New York and grew to become one of the most respected investment banks on Wall Street. The bank funded the development of enterprises such as the FW Woolworth Company and RH Macy & Company in the retail sector. In addition, in the 1930s, Lehman managed the underwriting of the initial public offer (IPO) for the first television manufacturer, DuMont, and financed the establishment of the Radio Corporation of America (RCA). 3

In the 1940s, Lehman underwrote the IPO for Halliburton and arranged the financing of Kerr-McGee and Murphy Oil, both companies in the emerging oil and gas sector. 4 Over the next two decades, Lehman underwrote the IPO for established companies such as Digital Equipment, a pioneer in the computer industry, and Hertz Rent-a-Car. The firm started an advisory business and, in the 1960s, advised such clients as the Ford Motor Company, American Airlines and Continental Airlines. 5

Throughout the 1970s and 1980s, Lehman Brothers experienced leadership and financial challenges, and consequently went through several mergers and acquisitions. Finally, in 1993, American Express – which had purchased Lehman – began a process of divesting its banking and brokerage operations. 6 It listed the firm as Lehman Brothers Holdings, Inc. in 1994, making it an independent entity. 7 (See Exhibit 1.)

Richard Fuld

Richard Severin Fuld Jr, the chairman and chief executive officer (CEO) of Lehman at the time of its bankruptcy, began working at Lehman Brothers in 1969. Raised in New York, Fuld began his career at Lehman as a trader of commercial paper. 8 Fuld was an aggressive trader and this, coupled with his ambition,

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resulted in a reputation as one of Wall Street's best traders. His level of competitiveness regarding trading and deal-making earned him the nickname “The Gorilla” among his colleagues. 9 To Fuld, investment banking was similar to a war, and his approach to leadership at the helm of Lehman was to manage the firm's affairs with a strong hand. Fuld's philosophy involved “ruling by intimidation”, and his abrasive and cut-throat style of decision-making in business was considered “brutal and legendary.” 10 (See Exhibit 2 for a biography of Fuld.)

Although he excelled as a trader, Fuld's managerial skills lacked finesse. He had limited interactions with colleagues and when he did communicate, he spoke in monosyllables. 11 Even his official statements tended to be dull, and journalists regarded him as one of the least quotable CEOs. 12 Ken Auletta, author of Greed and Glory on Wall Street: The Fall of the House of Lehman, described Fuld as a “digital mind trader, someone who spent so much time in front of his green screen… that he was no longer human.” 13 Fuld had a notoriously quick temper and preferred tasks to be done as he insisted. He was popularly known for his quote regarding short sellers (people who sell securities that they do not own), saying: “I am soft, I am loveable, but what I really want to do is reach in, rip out their hearts and eat it before they die.”

Watch the footage here: http://www.distressedvolatility.com/2012/12/watch-dick-fulds-evil-speech-on- lehman.html.

Fuld attached great importance to being presentable and ensured that Lehman employees dressed smartly for work, preferably in conservative colours. He believed that the way people dressed impacted on their ability to think. 14 He demanded absolute loyalty from his employees, with the unspoken price of missing a meeting or taking time off for personal business, regardless of its importance, being too much to pay. 15 One employee described Fuld as the most intimidating person he had ever known, saying: “When he said something, you did it.” 16 Another employee described Fuld as aggressive and obsessive, saying: “His face was without expression, his glance dead and unblinking. He prepared for each day's business like a gladiator, pumping iron in the company gym.” 17

At the time of American Express's divestment, Lehman's return on equity (ROE) was at a low of 2.2%. Profits came from its fixed-income business, mainly through the issuing of bonds. c Fuld sought to expand the firm's offerings to include high-margin businesses such as mergers and acquisitions and equities, which had the capacity to generate large profits and were crucial for the success of investment banks. 18 By 1996, through a restructuring of its operations to focus on high-margin businesses, the firm's ROE had increased to around 12.3%. 19

In January 1997, Fuld approved US$46 million for additional compensation for executives in Lehman's investment banking and equities operating units. His strategy focused on recruiting and rewarding high- performing staff who could drive operations in high-margin businesses, so as to move the firm away from its reliance on fixed income. Fuld thus steered Lehman to financial success, growing its market capitalisation from US$2 billion in 1994 to US$15.8 billion in early 2002. At a time when the demand for equities was low and investment banking markets showed slow growth, which consequently decreased profit margins, Lehman focused on US government bonds, global bonds and credit derivatives as means of remaining profitable.

Fuld also managed to retain his most productive managers by offering them substantial portions of stock at the firm. At Lehman, employees were paid as much as 60% of their salaries in stock and stock options. 20 By 2004, Lehman employees owned 35% of the firm – a significant achievement compared to just 4% employee ownership of the firm a decade before. 21 In the year before its bankruptcy, the firm had over 200 employees with around US$10 million each in Lehman stock. Fuld's strategy of joint ownership among employees benefited Lehman in terms of its performance, as the sense of collective ownership translated into a strong work ethic among employees. This impacted the firm's business activities positively. 22

The Fulds

As CEO of Lehman Brothers, Fuld funded a lavish lifestyle. In the eight years preceding Lehman's collapse, Fuld received almost US$500 million in salary, bonuses and stock options. 23 In 2006, Forbes magazine ranked Fuld at number 374 of the top 400 richest Americans. At the time, the 60-year-old Fuld had a net worth

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of US$1 billion. 24

Fuld and his wife Kathleen owned a number of homes including a holiday home on Jupiter Island, Florida, purchased for US$14 million; a ski house in Vermont; and a US$21 million 16-room apartment in Manhattan, New York. In addition, the Fulds owned a US$7.3 million estate in Greenwich, Connecticut 25 and a ranch in Sun Valley, Idaho, where Fuld usually held the annual Lehman retreats. Fuld expected his senior executives at Lehman to attend the retreats with their spouses, with the couples being flown to Idaho in private planes owned by Lehman. At the retreat, Fuld planned the weekend activities with military precision. He expected the men to wear khaki pants and either a golf or button-down shirt and the women had to pack evening dresses, jewellery and Manolo Blahnik shoes in addition to their hiking gear. 26 27

Fuld was a practicing Jew and valued the institution of marriage. He believed that the principles of Judaism provided the guidance needed to remain grounded in life. For this reason, Fuld insisted that his employees remain monogamous. He abhorred infidelity and believed that a stable home life led to greater productivity at work. Vicky Ward, author of The Devil's Casino: Friendship, Betrayal and the High Stakes Games Played inside Lehman Brothers, maintained that senior executives were “expected to have wives. And if possible, they were supposed to be happy with them. If they were not happy, they were expected to pretend.” 28 Ward described life as a Lehman wife as being in “a fishbowl and a shark tank, with unwritten rules about the clothes they wore and the charities they supported.” She added: “If you were married to a Lehmanite, you belonged to the firm.” 29

Fuld and his wife were also ardent collectors of art, and jointly owned a collection valued at US$200 million. 30 Kathleen Fuld was on the board of New York's Museum of Modern Art, which had a wing dedicated to Fuld and his wife. 31

United States Housing Market

By mid-2004, the US housing market had grown sizeably and home ownership had reached a record high of 69.2% – a gain on the 64% of a decade before. 32 This was mostly due to an increase in the issuing of subprime mortgage loans, which had lower requirements in terms of credit history, employment and income. 33 Consequently, subprime loans were considered high-risk investments to financial institutions, as the probability of borrowers defaulting on timely repayments was also very high. 34 (See Exhibit 3.)

Obtaining credit was easy, due to the prosperity experienced by mostly European and Asian economies. Countries from these regions invested heavily in American financial institutions and this increased the pressure for these institutions to lend. 35 As a result, lending standards were compromised as risky loan options thrived and borrowing incentives increased. One such incentive was the ability to obtain an adjustable rate mortgage (ARM) with below-the-market interest rates fixed for the first two years of purchasing a house. Issuers of subprime mortgage loans projected that housing prices would continue to appreciate and, after the grace period of the ARM had expired, people could refinance their mortgages. 36

The Federal National Mortgage Association (known as Fannie Mae) and the Federal Home Loan Mortgage Corporation (known as Freddie Mac) – two government-sponsored enterprises (GSEs) – played important roles in reducing the costs of mortgage financing by carrying out “secondary market” functions, which mainly involved buying mortgages from other institutions and reselling them to investors. This provided lenders with the funds necessary for the issuing of new mortgages. Through legislation, the aim of the GSEs was to make owning a house a reality for as many American families as possible, by making the process more affordable. 37 These operations resulted in the accumulation of mostly subprime mortgage debt and consequently increased the volatility of the US housing market. 38 (See Exhibit 4.)

Lehman's Risky Dealings

Lehman entered into the real estate industry by acquiring five mortgage-lending companies including Archstone, Aurora Loan Services and BNC Mortgage. Archstone developed and managed upmarket commercial property such as luxury apartments, 39 while Aurora and BNC issued mortgage loans. Aurora focused on financing subprime and prime mortgage loans targeting the middle of the market. The company

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issued Alt-A loans, which were considered to be riskier than A-credit prime loans but less risky than subprime loans. 40 BNC strictly targeted the lower end of the market, providing subprime loans to whoever applied for them. 41

Lehman's operations included repackaging loans it had sold as mortgage-backed securities (MBS), an investment backed by assets – which, in this case, was houses. MBSs were also known as collateralised debt obligations (CDO) when grouped with other financial products in the securitisation process. These loans were then grouped together as assets, creating bonds, which Lehman sold to investors as single investments. 42

Investors – typically other large banks, mutual funds and pension funds – invested heavily in CDOs, largely due to the potential they had to increase profits. As a principle, the philosophy concerning investing was that riskier investments yielded higher profits. Lehman sold CDOs to investors riding on this principle. Moreover, respected credit rating agencies had rated CDOs as secure investments, which provided some level of certainty for investors. 43

The Collapse

By mid-2006, the US housing market had hit its peak. The issuing of new subprime mortgages had surged from 9% in 1996 to 20% in 2006. 44 In 2006, of 1.5 million newly issued subprime mortgages, ARMs accounted for 90%, which suggested an increasing level of risk with securities associated with the housing market. 45 (See Exhibit 5.) At this time, subprime mortgages had helped increase the ownership of homes significantly, with subprime loans reaching US$600 billion, accounting for one-fifth of the US home loan market. 46 In addition, real estate developers had expected that the prices of houses would continue to rise steadily. This resulted in a building boom, which eventually brought about a surplus of unsold houses. 47

As defaults on mortgage payments increased due to increasing mortgage interest rates stemming from the expiry of ARM grace periods, refinancing became very difficult, especially for subprime borrowers. Thus, more defaults on payment led to an increase in foreclosures and an oversupply of houses for sale. These two factors drove housing prices down. 48 Furthermore, the decline in mortgage payments reduced the value of MBSs, which negatively affected the liquidity of financial institutions due to the value of MBSs being tied to the performance of mortgage-related investments and, to a greater extent, the stability of the housing market. 49 Thus, declining housing prices decreased the worth of MBSs, consequently eroding the net worth of firms possessing this asset. By late 2006, homeowners owed US$1.3 trillion in subprime loans. 50

Lehman's Fall

In 2007, Lehman underwrote more MBSs than its investment banking rivals. From operations in the mortgage financing business, it built up a portfolio valued at US$85 billion, which was almost four times the value of its shareholders' equity of US$22.5 billion. 51 Lehman's leverage – the ratio of assets owned by the firm to the equity of its shareholders – was at a high of 31:1 at this time, much higher than the 24:1 it was at in 2000. 52 As the mortgage market deteriorated investors' and trading counterparties' concerns regarding Lehman's liquidity increased. 53 These concerns were based on the forecasted impact on Lehman of the declining value of MBSs, considering the size of its mortgage portfolio. 54 Furthermore, financial analysts estimated that if Lehman lost as little as 5% on the value of its assets, its entire equity could be lost. 55 At the time of its bankruptcy, Lehman's real estate portfolio comprised 58% debt, 26% equity and 16% in securities. Consequently, exposure to risky mortgage market dealings precipitated fears of a collapse. 56

As the mortgage crisis unfolded, Lehman's stock fell steadily from US$82 in mid-2007 to US$51.59 a share in late 2007. 57 The fall in Lehman's share price occurred as a result of fears that the deteriorating conditions of the housing market would persist. Moreover, of the main Wall Street banks, Lehman was the most exposed to the risk of losing value on its mortgage-related assets, due to the fact that Lehman had invested heavily in subprime and prime mortgage markets, assuming greater risks than its equity could possibly cover. 58 This realisation sent panic through the American financial system, triggering an increasing loss of confidence in Lehman. 59 The situation worsened in August 2007, when Lehman closed BNC. This resulted in the loss of 1 200 jobs in 231 locations across the country. In addition, Lehman stopped operating Aurora in three of the states most affected by the crisis – namely California, Florida and New Jersey. 60 61 According to financial

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analysts, this was aimed at bolstering investor confidence and showing that Lehman was making efforts to reduce its exposure to the troubled mortgage markets. 62 This, however, was not enough to convince the markets.

Final Losses and Negotiations

In June 2008, Lehman reported a loss of US$2.8 billion in its second fiscal quarter. The firm sold US$6 billion in assets to increase its liquidity as the credit market tightened. By late June 2008, Lehman stock had lost 73% of its value. 63 Fuld had originally vowed to keep Lehman independent but, as the share price declined, he entered into negotiations to sell the firm. Potential buyers of Lehman included the Korea Development Bank (KDB), Barclays Bank and the Bank of America (BoFA).

Early in September 2008, speculation about collapsing negotiations between US banking regulators and KDB executives regarding the purchase of Lehman resulted in Lehman's share price plunging by 45% to US$7.79. 64 Shortly after confirmation that regulators had rejected KDB's proposal for the purchase of Lehman, the troubled investment bank's share price dropped by a further 6.9%. 65 Prior to the news, Lehman's shares had traded at US$12.92 per share. 66 The share price slid further when Barclays Bank and the Bank of America pulled out of negotiations to purchase Lehman. 67 The US government had proposed strict terms for the buyout, and the banks did not see value in the proposal. 68 With little clarity on the future of Lehman and no government bailout in sight, the confidence of investors steadily declined, with Lehman's share price plummeting to an all-time low of US$3.88 per share. 69 In September 2008, a few days before its bankruptcy filing, Lehman announced a loss of US$3.7 billion for the third fiscal quarter. 70

Conclusion

Lehman's bankruptcy impacted several banks on Wall Street negatively, as many had transacted extensively with the firm. A collective of investment banks, which included Goldman Sachs, BoFA, Credit Suisse, Deutsche Bank and US Bancorp, estimated their losses from trading with Lehman at US$50 billion. 71 After orchestrating the merger between bankrupt Wall Street investment bank Bear Sterns and JP Morgan Chase, the US Treasury sought to reduce its involvement with the banks. 72 Hence, its intervention to resolve the Lehman crisis was limited. 73

Financial analysts accused Fuld of holding onto Lehman's “toxic” assets for longer than necessary and wanting to sell the assets for more than they were worth. 74 In October 2008, when summoned before the US House of Representatives' Committee on Oversight and Government Reform d , Fuld maintained that he had made the best decisions for the firm, given the information he had at the time. 75

Notes

a. A term used to describe very large financial institutions. The failure of these institutions could be disastrous for the economy, thus forcing the government to step in and assist. [Source: Dash, E. N.D. ‘If it's Too Big to Fail, is it Too Big To Exist?' available www.nytimes.com (accessed 18 January 2013).]

b. Subprime lending involves providing loans to people who may have difficulty maintaining the repayment schedule. These loans tend to have high interest rates and less favourable terms to compensate for the higher credit risk.

c. Issuing of bonds is a practice in finance where authorised companies (bond issuers) put down loan collaterals (buildings, land or other assets) and borrow money from investors (bond holders). Bond issuers are obliged to pay back borrowed capital at an agreed period when the bond expires. Regular interest (coupons) is paid by the bond issuer to the bond holder until the loan expires and borrowed capital is repaid.

d. The Committee on Oversight and Government Reform was the main committee in the US House of Representatives that oversaw government spending and ensured effective performance in government. The committee might investigate issues in the private sector, depending on the impact the issues would have on the country. [Source: Available www.oversight.house.gov (accessed 23 January 2013).]

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References

1. Archibald, R. 2012. ‘Mayer Lehman (1830–1897)’, available http://immigrantentrepreneurship.org/ entry.php?rec=20 (accessed 4 December 2012).

2. Harvard Business School Library, N.D. ‘History of Lehman Brothers’, available http://www.library.hbs.edu/ hc/lehman/history.html (accessed 4 December 2012).

3.Ibid.

4.Ibid.

5. Author unknown, N.D. ‘1950 – 1959: Start Up Financing, IPO Underwriting’, The Economic Times, available http://economictimes.indiatimes.com/features/slideshows/the-journey-of-lehman-brothers/1950-1959-start- up-financing-ipo-underwriting/quickiearticleshow/3489555.cms (accessed 23 January 2013).

6. Author unknown, N.D. ‘Key Events in Shearson's History’, 13 January 1990, The New York Times, available http://www.nytimes.com/1990/01/31/business/key-events-in-shearson-s-history.html (accessed 4 December 2012).

7. Author unknown, 1994. ‘American Express Sells Brokerage’, The Baltimore Sun, 25 January, available http://articles.baltimoresun.com/1994-01-25/business/1994025125_1_american-express-lehman-bros- express-sold (accessed 4 December 2012).

8. White, B. 2008. ‘Man in the News: Dick Fuld’, Financial Times, 13 June, available http://www.ft.com/intl/ cms/s/0/2d66031a-395a-11dd-90d7-0000779fd2ac.html#axzz2ImdADKWO (accessed 23 January 2013).

9. Onaran, Y. and Helyar, J. 2008. ‘Fuld Sought Buffet Offer He Refused as Lehman Sank’, Bloomberg, 10 November, available http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aZ1syPZH.RzY (accessed 23 January 2013).

10. Author unknown, 2009. ‘Crash of a Titan: The Inside Story of the Fall of Lehman Brothers’, The Independent, 7 September, available http://www.independent.co.uk/news/business/analysis-and-features/ crash-of-a-titan-the-inside-story-of-the-fall-of-lehman-brothers-1782714.html (accessed 4 December 2012).

11. Reference for Business, N.D. ‘Richard S. Fuld Jr – From the Trading Floor to the Executive Suite’, available www.referenceforbusiness.com (accessed 19 February 2013).

12. Kaplan, M. 2010. ‘Richard Fuld: Territoriality’, available http://bozosapiens.blogspot.com/2010/09/richard- fuld-territoriality.html (accessed 20 February 2013).

13. Reference for Business, N.D. op. cit.

14. Ward, V. 2010. ‘Lehman’s Desperate Housewives’, Vanity Fair, April, available http://www.vanityfair.com/ business/features/2010/04/lehman-wives-201004 (accessed 13 February 2013).

15.Ibid.

16. Fishman, S. 2008. ‘Burning Down His House’, New York Magazine, available http://nymag.com/news/ business/52603/ (accessed 21 February 2013).

17. Kaplan, M. 2010. op. cit.

18. Serwer, A. 2006. ‘Lehman Brothers: A Super-hot Machine’, CNN, 11 April, available http://money.cnn.com/ 2006/04/10/news/companies/lehmanintro_f500_fortune_041706/ (accessed 4 December 2012).

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19. Author unknown, N.D. Securities and Exchange Commission – Report on Lehman Brothers Inc., available http://google.brand.edgar-online.com/EFX_dll/ EDGARpro.dll?FetchFilingHtmlSection1?SectionID=1395598-1272-24844&SessionID=-zHQFWRH7jTigs7 (accessed 4 December 2012).

20. Fabrikant, G. and Dash, E. 2008. ‘For Lehman Employees, The Collapse Is Personal’, The New York Times, 11 September, available http://www.nytimes.com/2008/09/12/business/12employees.html?_r=0 (accessed 23 January 2013).

21. Author unknown, N.D. ‘Richard S. Fuld Jr. 1946–’, available http://www.referenceforbusiness.com/ biography/F-L/Fuld-Richard-S-Jr-1946.html#b (accessed 4 December 2012).

22. Wharton Business School, 2007. ‘CEO Richard Fuld on Lehman Brother's Evolution from Internal Turmoil to Teamwork’, 10 January, available http://knowledge.wharton.upenn.edu/article.cfm?articleid=1631 (accessed 4 December 2012).

23. Becker, B. and White, B. 2008. ‘Lehman Managers Portrayed as Irresponsible’, The New York Times, 6 October, available http://www.nytimes.com/2008/10/07/business/economy/07lehman.html?_r=0 (accessed 13 February 2013).

24. Author unknown, 2006. ‘The 400 Richest Americans, #374 Richard S Fuld Jr., Forbes, 21 September, available http://www.forbes.com/lists/2006/54/biz_06rich400_Richard-S-Fuld-Jr_A9P0.html (accessed 13 February 2013).

25. Lewis, H. 2008. ‘Dick Fuld's Greenwich Bunker’, Business Insider, 26 September, available http://www.businessinsider.com/houses/fuld-bunker (accessed 13 February 2013).

26. Ward, V. 2010. op. cit.

27.Ibid.

28.Ibid.

29.Ibid.

30. Aleksander, I. 2008. ‘Richard Fuld's Art Collection Disappoints at Christie's’, The New York Observer, 13 November, available http://observer.com/2008/11/richard-fulds-art-collection-disappoints-at-christies/ (accessed 13 October 2013).

31. Gordon, B. 2010. ‘Life as the Wife of a Lehman Brothers Banker’, The Telegraph, 1 April, available www.telegraph.co.uk (accessed 19 February 2013).

32. Perry, M.J. 2011. ‘The “Homeownership Bubble” Is Still Deflating’, 30 July, available http://www.aei- ideas.org/2011/07/the-homeownership-bubble-is-still-deflating/ (accessed 23 January 2013).

33. Harvard University Joint Centre for Housing Studies, N.D. ‘The State of the Nation's Housing 2008’, available http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/son2008.pdf (accessed 4 December 2012).

34. Bunce, H.L., Greustein, D., Herbert, C.E. and Scheessele, R. N.D. ‘Subprime Foreclosures: The Smoking Gun of Predatory Lending?’, available http://griequity.astraea.net/resources/industryandissues/ financeandmicrofinance/predatorylending/subprimeforeclosures200602.pdf (accessed 4 December 2012).

35. Author unknown, N.D. ‘The US Subprime Mortgage Crisis Explained’, available http://www.thecasualtruth.com/node/262 (accessed 4 December 2012).

36. Bianco, K.M. N.D. ‘The Subprime Crisis: Causes and Effects of the Mortgage Meltdown’, available http://www.business.cch.com/bankingfinance/focus/news/Subprime_WP_rev.pdf (accessed 4 December

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2012).

37. Fishbein, A.J. 2002. ‘Going Sub-prime’, National Housing Institute Articles, Issue 125 (October/ November), available http://www.nhi.org/online/issues/125/goingsubprime.html (accessed 4 December 2012).

38. Colomiris, C.W. and Wallison, P.J. 2008. ‘Blame Fannie Mae and Congress for the Credit Mess’, The Wall Street Journal, 23 September, available http://online.wsj.com/article/SB122212948811465427.html (accessed 23 January 2013).

39. Alloway, T. 2012. ‘Lehman to Sell Archstone for $6.5bn’, Financial Times, 26 November, available http://www.ft.com/intl/cms/s/0/562ccac6-3811-11e2-b8d3-00144feabdc0.html#axzz2HwN3nswy (accessed 4 December 2012).

40. Hudson, M. 2010. ‘The End of Lehman, Part 1’, The Center for Public Integrity, available http://www.publicintegrity.org/2010/09/15/2520/end-lehman-part-1 (accessed 4 December 2012).

41. Author unknown, 2007, ‘Lehman Shuts BNC Unit, Cuts 1,200 Jobs’, Market Watch, 22 August, available http://articles.marketwatch.com/2007-08-22/finance/30706857_1_subprime-loans-home-loans-mortgage- industry (accessed 4 December 2012).

42. Author unknown, 2009. ‘The Fuel That Fed the Subprime Meltdown’, Investopedia, available http://www.investopedia.com/articles/07/subprime-overview.asp#ixzz2EMcq8bJq (accessed 4 December 2012); and Author unknown, 2009. ‘Case Study: The Collapse of Lehman Brothers’, Investopedia, available http://www.investopedia.com/articles/economics/09/lehman-brothers-collapse.asp#axzz2DhbMEUAv (accessed 4 December 2012).

43. Tomilson, R. and Evans, D. 2007. ‘CDO Boom Masks Subprime Losses, Abetted by S&P, Moody's and Fitch’, Bloomberg, 31 May, available http://www.bloomberg.com/apps/ news?pid=newsarchive&sid=ajs7BqG4_X8I (accessed 4 December 2012).

44. Bianco, K.M. 2008. ‘The Subprime Crisis: Causes and Effects of the Mortgage Meltdown’, available http://www.business.cch.com/bankingfinance/focus/news/Subprime_WP_rev.pdf (accessed 23 January 2013).

45. Mayer, C. and Pence, K. 2008. ‘Subprime Mortgages: What, Where and to Whom’, available http://www.federalreserve.gov/pubs/feds/2008/200829/200829pap.pdf (accessed 23 January 2013).

46. Bianco, K.M. 2008. op. cit.

47. Harvard University Joint Centre for Housing Studies, N.D. op. cit.

48. Mayer, C., Pence, K. and Sherlund S.M. N.D. ‘The Rise in Mortgage Defaults’, available http://www- personal.umich.edu/∼kathrynd/files/PP290/RiseinMortgageDefaults_Fed.pdf (accessed 4 December 2012).

49. Morelli, C. and Tognaccili, M. N.D. ‘The Subprime Crisis’, available http://www.econ-pol.unisi.it/fineng/ THE_SUBPRIME_CRISIS.ppsx (accessed 4 December 2012).

50. Bianco, K.M. 2008. op. cit.

51. Robinson, P. and Onaran, Y. 2008. ‘Fuld’s Subprime Bets Fueled Profits, Undermined Lehman’, Bloomberg, 15 September, available http://www.bloomberg.com/apps/ news?pid=newsarchive&sid=aVZKah.at5fY (accessed 23 January 2013).

52. Callan, E. 2008. ‘Lehman Brothers – Leverage Analysis’, available http://jenner.com/lehman/docs/ debtors/LBEX-DOCID%201401225.pdf (accessed 23 January 2013).

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53. Barr, A. 2008. ‘Lehman May Need to Raise Capital’, Market Watch, 3 June, available http://www.marketwatch.com/story/lehman-needs-to-raise-capital-another-rating-cut-would-hurt (accessed 23 January 2013).

54. Author unknown, N.D. ‘The Orderly Liquidation of Lehman Brothers Holdings Inc. Under the Dodd- Frank Act’, FDIC Quarterly, available http://www.fdic.gov/bank/analytical/quarterly/2011_vol5_2/lehman.pdf (accessed 23 January 2013).

55. Author unknown, 2008. ‘Lehman Brothers Files for Bankruptcy, Scrambles to Sell Key Businesses’, CNBC, 15 September, available http://www.cnbc.com/id/26708143/ Lehman_Brothers_Files_For_Bankruptcy_Scrambles_to_Sell_Key_Business (accessed 4 December 2012).

56. Kiefer, R. 2008. ‘City Bracing for Lehman's Demise’, The New York Sun, 12 September, available http://www.nysun.com/business/city-bracing-for-lehmans-demise/85736/ (accessed 4 December 2012).

57. United States Securities and Exchange Commission, 2008. Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Fiscal Year Ended 30 November 2007 – Lehman Brothers Holdings Inc., available http://www.sec.gov/Archives/edgar/data/806085/000110465908005476/ a08-3530_110k.htm (accessed 23 January 2013).

58. Author unknown, 2012. ‘Lehman Brothers Inc.’, The New York Times, 4 April, available http://topics.nytimes.com/top/news/business/companies/lehman_brothers_holdings_inc/index.html (accessed 4 December 2012).

59. Author unknown, 2008. ‘Lehman Brothers Fuels Wall Street Confidence Crisis’, CNBC, 10 June, available http://www.cnbc.com/id/25081949 (accessed 4 December 2012).

60. Anderson, J. and Bajaj, V. 2007. ‘Lehman Close Subprime Unit and Lays off 1,200’, The New York Times, 23 August, available http://www.nytimes.com/2007/08/23/business/23lend.html (accessed 4 December 2012).

61. Robinson, P. and Onaran, Y. 2008. op. cit.

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63. Author unknown, N.D. ‘History of Lehman Brothers’, available http://www.americanessays.com/study- aids/free-essays/education/history-of-lehman-brothers.php (accessed 4 December 2012).

64. Author unknown, 2009. ‘Lehman Brothers Struggles to Survive’, CBS News, 17 April, available http://www.cbsnews.com/2100-500395_162-4433776.html (accessed 4 December 2012).

65. Lin, B. N.D. ‘Lehman Spurned KDB's Offer of $6.40 for a Share, Min Says’, Bloomberg, available http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aZdah3bExakk (accessed 4 December 2012).

66. Turner, M. 2008. ‘Markets Wipe Almost 40% of Lehman as KDB Talks Collapse’, Financial Times, 9 September, available http://www.efinancialnews.com/story/2008-09-09/markets-wipe-almost-off-lehman-as- kdb-talks-collapse (accessed 23 January 2013).

67. Sorkin, A.R. 2008. ‘Lehman Files for Bankruptcy, Merrill Is Sold Top of Form’, The New York Times, 14 September, available http://www.nytimes.com/2008/09/15/business/15lehman.html?pagewanted=all (accessed 4 December 2012).

68. Gasparino, C. 2008. ‘Streets Prepare For Worst As Lehman Deal Stalls’, CNBC, 14 September, available http://www.cnbc.com/id/26704405/Street_Prepares_for_Worst_As_Lehman_Deal_Stalls (accessed 23 January 2013).

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69. Anderson, J., Sorkin, A.R. and White, B. 2008. ‘Lehman May Be Sold As Share Price Continues To Plummet’, The New York Times, 11 September, available http://www.nytimes.com/2008/09/11/business/ worldbusiness/11iht-lehman.4.16082486.html (accessed 23 January 2013).

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73. Author unknown, 2008. ‘Q&A: Lehman Brothers Bank Collapse’, BBC, 16 September, available http://news.bbc.co.uk/2/hi/7615974.stm (accessed 23 January 2013).

74. Plumb, C. and Wilchins, D. 2008. ‘Lehman CEO Fuld's Hubris Contributed To Meltdown’, Reuters, 14 September, available http://www.reuters.com/article/2008/09/14/us-lehman-backstory- idUSN1341059120080914 (accessed 23 January 2013).

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http://dx.doi.org/10.4135/9781473964174

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