It became known as & # 39; the Lehman Brothers weekend & # 39 ;, one Saturday and Sunday in September 2008 when the bank in New York went bankrupt and threw the entire planet into the worst economic crisis since the 1930s.
By not finding a buyer for the bank giant who had to deal with a serious liquidity crisis due to the increasing default of subprimes, the American authorities decided to give up the hundred-year-old institution in their own fate.
Subsequently, on Monday, September 15, 2008, at 1:45 am, Lehman Brothers filed for bankruptcy and surprised the world after a weekend of fruitful and fruitless negotiations.
The bank left a debt of $ 691 billion and 25,000 people unemployed.
It was the biggest bankruptcy in American history.
On Wall Street, the Dow Jones fell by 500 points, the biggest drop since the terrorist attacks on the World Trade Center in 2001.
This Monday morning, the unbelieving brokers of Lehman began emptying their offices and left the bank's loaders at the head office with their belongings and their photos traveled around the world.
"We have not seen what would happen!" Said a Lehman employee in London.
But others, like Lawrence McDonald, a former real estate agent and co-author of a book published in 2009 about the fall of the bank, "The Colossal Failure of Common Sense", the bosses of Lehman were aware of the excessive risk & # 39; that they ran to increase their profits in the short term.
"With 250 km / h the control has sent us right to the largest iceberg of subprime", McDonald told AFP.
"Lehman has used the house, the decoration and the dishes on these toxic real estate loans," said the former real estate agent, referring to the fact that since 2005 drivers have been aware of the risk of a house sow.
From 2005 to 2007, at the heart of the property bubble that provided mortgage loans to insolvent buyers, Lehman Brothers, who bought many real estate loans, recorded record profits.
But since mid-2007, the bank began to accumulate losses and the grace coupon arrived nine months later on 16 March 2008 with the near bankruptcy of another investment bank, Bear Stearns.
– Between the cross and the sword –
On the verge of bankruptcy because of his disastrous subprime squeeze, Bear Sterns was bought for cents by JPMorgan Chase with the Federal Reserve's blessing, a measure that undermined the confidence of markets that began to bet on the fall of Lehman.
The authorities tried to find a buyer for Lehman Brothers and negotiated with a bank from South Korea and later with Bank of America and Barclays.
The United States had nationalized mortgage refinancing giants Fannie Mae and Freddie Mac a week earlier, securing more than $ 5 trillion in loans. And he finally chose to let Lehman end.
Days later, the state saved an AIG insurance company ($ 180 billion) before placing another $ 700 billion in banks in a controversial recapitalization plan.
Governments were widely criticized for sacrificing Lehman Brothers and for saving other banks such as Goldman Sachs.
"We were heavily criticized because we had declared Lehman bankrupt," Henry Paulson, then Treasury Secretary, admitted recently. State Secretary for Finance. "People said:" They were able to save Bear Sterns, they saved AIG, why did not they save Lehman? "We explained and no one believed us," he complained.
"Lehman was very vulnerable, even in relation to other institutions, and it was very difficult to find someone in that dangerous time to take that risk," said Timothy Geithner, head of the Fed in New York.
But as some economist Laurence Ball, who has just published a book on the bankruptcy of Lehman Brothers, the investment bank became the victim of "enormous political pressure."
Public opinion has already indicted the salvation of the Wall Street giants at the expense of taxpayers and to avoid further criticism the authorities have chosen not to act.