The year after Lehman Brothers
I think, is the most influential and most widely rampage treasury department decision was made. Until now scientists could not agree if the decision to let Lehman fall true or not. Luigi Zingales for example scientists assume that the fall of Lehman is true, because barley credit institutions should be set in bankruptcy permanently. Also Mr Zingales accents that Lehman is a symptom of the crisis and not the cause.
True and certainly not acceptable to bless the inability, but I let Lehman fall was the largest failure ever to treasury department. It seems some people have to go back for continuing education in the university accounting. I hold this opinion for several reasons. Lehman rescue will cost taxpayers 20 to be 40 billion. Until the end of 2009, the financial crisis triggered the collapse of Lehman and the resulting destruction of 10.5 trillion USD. Of course, also without the crushing collapse of Lehman assets will be high because of Lehman will not be the only board treasury departments to save and who will never stop the economic decline. But all the economic decline will be more clearly regulated and the government that would win most of: time. But is not that the government should wave the bailout plan to save 700 USD will be the system from total collapse.
Other points are that the collapse of Lehman as a guide to improve the security situation which freezes all bank loans. This situation is very dangerous and threatening the international financial system in a very big way. Bank does not believe anymore and no longer lend money to anyone for fear that they will get their money back. Danger that the flow of credit has dried up crops that lead to total collapse of the financial system. So the Fed did not have no choice but to reduce the historical value of the 0% policy level. But even this is not enough to stabilize the financial system. Once again, the Fed widened to block central bank credit is very good, and pumped 100 billion dollars into the financial system.
So I think how the finance department to rescue the financial system will work OK, but far cheaper for taxpayers all over the world. But I also think that this is Henry Paulson knew, but did not have a choice. At that time not a good choice for voracious inability bless banker, you can not take plans billion dollar bailout of the financial system even if it is not standing at the threshold of the total. Most do not, we should also mention that the consultants from Paulson comes from Goldman Sachs faksi and I think they are happy with the decision to let Lehman fall. Paulson also came from the fort, and he and former CEO Richard Fuld of Lehman is not best friends so this can cause the tragic results.
Well, for a total of facts at the end of the banking sector kebangkrutan gave more, and I think the world has learned nothing. AIG stock price, Fannie Mae, Freddie Mac start to rise again, when I wrote “Facing the global economic crisis” last year I think the government has decided to choose how fast and painless to deal with large macroeconomic imbalances. But instead of choosing this method seems the government has decided to address macroeconomic imbalances are not small.
Original by: Sören Zschoche, student from Germany at the Munich University of Applied Sciences where we study business informatics.
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