A BBC 3 part series exploring the 2008 global financial troubles.
It was the biggest bankruptcy in history, and the tipping point into global recession. 'Lehman's was the seminol moment in the sense that, it illustrated these ... big problems, and if we didn't solve them things were going to get worse.' The panic that followed hurt us all as mortgages dried up, stock markets tumbled, and businesses went to the wall.
Told in one of those Radio Broadcaster advertising voices that are difficult to trust, and backed up with that kind of ominous "dun dun DUN" soundtracks that are supposed to instill a sense of suspense, this film, surprisingly, goes on to provide key insights into the fall Dick Fuld, one of the mightiest proponents of America's modern banking system, the institution he led into Bankruptcy, Lehman Brothers.
At first, though it may seem like just another conspiracy theory detailing how America's economic system is based on lie, when faced with the facts as told through candid interviews with some of the key players in the drama, it becomes evident that even this hyperbolic language and overly emotional overtures cannot hope to match the extent of delusional ego, avarice and greed which brought on by the sub-prime mortgage debacle in Sept. 2008.
The outcome of these revelations were clearly visibile during this meltdown, yet less widely known, are the processes that created the problem in the first place, the nature of the back room deals which occurred once the news leaked, or who the men where who brokered these deals. This is the real story told by "the Fall of Lehman Brothers".
What people weren't anticipating, which is what happened, was the crisis of confidence which subsequently led to massive freezing of markets and in particular in the short term liquidity, which then created a whole series of other problems. So i think in that summer of 07, i believe that people were a little bit complacent.
Chief Executive Financial Services Authority (Britain)
Part II starts with an overview of world affairs before the recession and how they contributed the severity of economic downturn. Then, through interviews with leading global regulators Gordon Brown and Alan Greenspan, we get a look into the last 20 years of financial regulation and the ramifications of "light touch" strategies, by examining the potential risks of using short term liquidity to back long term investments.
In retrospect, things look so clear, yet swimming in the deregulated freedoms and financial hubris in the years after the fall of the Berlin wall we are told that bankers and investors of all flavours were blind to that other side of risk which does not involve rolling in money.
In Greenspan's own words: "the roots of this crisis, are global and geo-political. The actual trigger, is securitized American sub-prime mortgages, which became toxic, and essential proliferated around the world... Fundamental to a market system, is the fact that each independent economic entity works extraordinarily ausiduously to preserve its solvency. It is such a critical part of the way a competative freemarket system works, you have to have that as an essential ingredient, or it will not work.... regretably there is nothing better."
It is an idea which guided Mr. Greenspan for his entire career but proves flawed. Gordon Brown, simultaneously takes Greenspan to task while distancing himself from blame as he admits "The owners or the executives of these companies where not sufficiently taking the public interest into account"
No matter how one looks at it, the result was the same, to set up a global economic system where risks were taken, and the dice came up craps.
This time around we take a look at how different contries handled the meltdown, as well as asking questions regarding how the current systems could have handled it differently.
added by: bill