Danny Schechter - ColdType

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Doctor Housing Bubble, Lehman Brothers was heavily invested
in fraudulent subprime paper:
Lehman could not resist the subprime markets. In August
of 2007 Lehman closed its subprime lender BNC Mortgage,
which left 1,200 positions gone. This clearly was only the
beginning for Lehman and their mortgage and credit problems.
In 2008 Lehman was posting unprecedented losses.
For the most part their problems arose from holding onto
lower grade tranches and holding on too long to subprime
mortgages. It is up in the air whether they held onto to these
assets because of a foolish investment move or whether
there simply wasn’t a market for these assets. For the 2nd
quarter the firm had $2.8 billion in losses and was forced to
liquidate $6 billion in assets. It is simply stunning to see the
stock movement for the firm … It is easy to lose perspective
of what really is going on. You need to remember that debt is
at the center of all this.
Debt may have been at the center, but real people lived in
the homes the firm borrowed against. What happened to them
seemed to be of little concern to the bankers and the media.
Paulson opposed a bailout publicly on the grounds of “moral
hazard,” arguing that Lehman should not be rewarded for
its mistakes.
But as the crisis accelerated, and more firms were put at risk
of insolvency, that argument disappeared.
Max Wolff put it this way in our conversation: “On September
15th, we were told some heavily ideological story about
letting some companies fall, letting the market do its thing,
not bailing everybody out. And Lehman was allowed with its
23,000 employees to collapse which sent cataclysm and shock
waves through the global markets, and began the giant September-October
sell-off which was apocalyptical and makes
this the second worst year in the history of stock markets.
“But then, the very next morning we got $85b of the even-