A Decade Later – Lehman Part II

“Nobody likes to fail but failure is an essential part of learning. If your uniform isn’t dirty, you haven’t been in the game.” – Ben Bernanke

2008 Election

Meanwhile the world was in crisis the United States had just elected Barak Obama to become the first black American president in November 2008. Obama took over from George W Bush and had to deal with one of the toughest times in US history.

February 2009 

The bleeding continued in world markets into 2009. The US Federal Reserve System known as “The Fed” had to come up with a plan to “re-boot” the US and world economy. By 2009 the crisis already had spread to Europe and Asia. The Fed came up with a master plan in February 2009. Feb 09′ is now known as “the bottom.” Since February 2009 the S&P 500 has risen from $735 to an all time high of $2919 this month (September 2018).

TARP 

The master plan was then introduced at a Fed meeting to save the failed US economy. Lehman brothers did not get a bail out from The United States government however, the banks and failed institutes who needed money received what is known as “Troubled Asset Relief Program.” aka TARP.

From the research I have done TARP was a master plan from Timothy Geithner. This plan cost the US tax payers $37.3 Billion. This is a lot less than the projected cost of $247 Billion in December of 2008 and a limit of $700 Billion if needed.

Today 

As of today the banks are not leveraged to the levels they were back in 2008 pre crisis. The banking system in The United States is at it’s strongest in a long time.

Have the banks learnt their lesson?

I’ll leave that for you to decide.

 

Lewis Brown

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