Posts tagged bankruptcy

Analysis on OECD Country Korea

Data source: World Bank, World Development Indicators

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
$3.69b $3.02b $8.90b $21.5b $63.8b $96.6b $264b $517b $533b $845b

I have researched about Korea, one of OECD countries, on its GDP. The graph above is the ‘norminal’ GDP, which doesn’t take account for the inflation/deflation.

As you see, Korea had significant economic growth since 1975. Backed up by government’s economic reforms, Korea experienced an exponential economic growth. The chart above shows the norminal GDP since 1960 to 2005.

Korea has experienced near-bankruptcy in 1997 due to lack of foreign currencies. As you can see in the graph, the GDP plunged down from $517b to $345b. It was because they had virtually no foreign currencies (especially USD). Korean government could not pay off debts that accumulated during trades with foreign countries. They only had $2.0 billion, which was too short to pay the debt of $19.5 billion. It did have money to pay of its debt by Korean currency Won, but the lenders would not accept the weak, invaluable Korean currency at the time.

Nevertheless, the government had succeeded in paying off all the debt at 2001, and the economy recovered. This could be seen from the graph that the GDP had recovered to the previous GDP of 1995.

In 2007, Korea’s GDP hit $1.05 trillion due to increased exports. It was the year that Korea exported so much that it dramatically lifted up its GDP by significant degree. However, as 2008 global economic recession started, the GDP plunged to $929 billion due to decreased exports.

So, this was the short analysis of Korean GDP from 1960’s to 2008. Before 1960’s, the GDP of Korea was not recorded because the country’s economy was devastated by wars. So it GDP before 1960’s does not mean anything significant.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
$13,300 $16,100 $19,400 $19,400 $17,800 $19,200 $22,600 $24,500 $25,000 $25,800

The GDP per capita of Korea has been increasing since 2000. It has almost been doubled compared to 2000 and 2009. This means that Korean people’s wealth have been double in 10 year time. In my opinion, this is rather astonishing. With increased GDP per capita, many companies would be shifting their markets to Korean domestic market because of doubled wealth of each person. The developed domestic market will solve many of Korean companies’ dilemma of too much dependency on foreign markets especially US market, which is the biggest market of the world.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
10% 9% 5.8% 6.2% 3.1% 4.6% 4% 4.8% 5% 2.2%

GDP real growth rate for Korea has been declining. As you see in the graph, its showing the declining trend for Korea’s real growth rate. This low real growth rate is the concern for Korea right now, however, many experts consider this a temporary consequence of global recession.

“Year”,”Value”
“2000”,”13300″
“2001”,”16100″
“2002”,”19400″
“2003”,”19400″
“2004”,”17800″
“2005”,”19200″
“2006”,”22600″
“2007”,”24500″
“2008”,”25000″
“2009”,”25800″
Advertisements

Leave a comment »

Analysis on Japanese Crisis

Japanese Economy is in Deep Coma

Times Online: Click Here

According to Bronwen Maddox on Times Online, Japanese Crisis resulted from extremely inefficient bureaucracy culture, lack of risk-taking, aging population, and bad governmental budget.

The article states that Japanese government (local and central) have debt over 180% of Japan’s GDP. That means, the Japanese government has to pay almost double the country’s GDP to the lenders, who are mostly Japanese citizens. So, the Japanese government is carrying the unexpectable time-bomb of national bankruptcy. Japan is the second highest in debt percentage to GDP in the world, after Zimbabwe’s 200%. However, Zimbabwe’s GDP is so infinitesimal compared to the world’s second biggest Japanese GDP. So Zimbabwe could get support from other countries, but Japan will not be able to survive the misery even if there were some supports from other countries.

The main reason for Japan’s enormous debt is the Japanese government’s bad planning for budget. According to the article, over 45% of the governmental spending was borrowed from Japanese people’s savings. This kind of spending started from 1992, so this debt accumulated for 20 years until the debt almost went up to twice the country’s GDP. United States had deficit governmental spending just like Japan, however, Obama passed the Budget Plan for 2010 to minimize the deficit and ultimately get rid of the debt. Japan is not taking any actions to minimize and get rid of debts they are carrying. Instead, the new government is increasing the deficit almost forced by its populist economic policies. If the new government does not cancel its policies and sketch a new way to get out of this misery, Japan will face more serious problem than ‘lost decades’ : a bankruptcy.

There why are Japanese government spending so much money? My answer to this question was that Japanese people did not want to use money. That is why the Japanese government has to release money to the paralyzed Japanese market. I have heard and read that many Japanese people had lack of confidence in their futures because of the prolonged economic recession in Japan (lost decades). Even if they have one of the highest GDP per capita in the world, they do not use money in fear of another economic recession. This is called leakage in economic term. So Japan is suffering from deflation because of very very low demands in domestic market. Japanese domestic markets do have money to spend, however, people simply chose not to and save it. That is why Japanese companies are having a bad time in the domestic market. To get back to the point, the Japanese government has to release money in order to get the domestic market going, or else, it will collapse.

This lack of confidence or fear about future is devastating to the economy. This once happened to Korea when it was near national bankruptcy in 1998 during the economic crisis in Asia. People feared for the future and they stopped spending but saving. This had rather devastating effect on the Korean economy. So the government had made up the mind to get help from IMF, the international monetary fund, and cold-heartedly let the lazy banks or companies to go bankrupt. The government has forced many companies and economic figures to reform. The economic reform has resulted in tons of people without jobs, however, Korea managed to get out of the trouble until 2000, which only took them 4 years to overcome the trouble.

Japan, in the other hand, did not take such daring measures to overcome the economic crisis, which started from 1992. As a result, Japan has suffered from two lost decade, and ‘is’ suffering from another losing decade. The Japanese government was not determined like the Korean government so that the economic crisis of Japan has lingered around since 1992, almost 20 years from now.

There is another factor that is aggravating the crisis in a long term. It is the low birth rate. Japan has the birth rate of 7.64 out of 1000 population, which ranks 221th in the world. It was estimated that in 20 or 30 years, there will be 45% of Japanese population with old people over 65. This will reduce governmental income from taxation and aggravate the responsibility the young people have to carry out. Thus, it will have unenthusiastic young people and there will lack of labor in the market. Every economically active young person (at 25-30) will have to take care of 2 elders. This will give disincentive to the young people to get a job. Also, it will discourage the young people not to have babies because it’ll be even more burdensome. Thus, the low birth rate gets worst. The Japanese government has to do something to give incentive for the young people to have babies. Or else, the national will fall into the abyss of low birth rate and ultimately ‘extinction’ of Japanese people.

In sum, the Japanese government has to do something. The Japanese government should first pass a new budget plan in effort to minimize the deficit, and they should pass a new law to encourage young people to have babies. Also, they should get rid of the culture of bureaucracy. Or else, Japan will confront the irremediable problem of bankruptcy.

Leave a comment »

Debt Time Bomb, Is It an Impending Death of Pax Americana?

<High Public Debt, is it an impeding death of Pax Americana?>

According to U.S. National Debt Clock, United States has approximately 12 trillion dollars of public debt, and the debt is increasing by one hundred-thousand dollars every second. Once I saw this I thought that it was just another phishing website or conspiracy website which tries to fool people with false information. So I thought this specific number was a fake. However, I have mistaken it for a false information. It actually has a data graph from US government’s official website (1).

As you see in the graph, the debt will increase and increase until it is 100% of US’ GDP. It will be not long till it goes over 100%. Now, many people would be seriously concerned about this problem by now. Many people will wonder, “How has the biggest economy in the world got an exponential amount of public debt?” When I have googled this problem, many people posted that the ‘War Against Terrorism’ has caused this. I remember looking at a graph of US public debt skyrocketing right after the year 2001 when the President Bush declared ‘War Against Terrorism.’ Therefore the prolonged exhausting war of Iraq and Afghanistan has certainly been a part of the cause. As the result of these wars, it has debilitated US economy. This could be noticed from the recent news reporting, US dollar fell to 14-year low against the yen.

For this blog post, we will look into following questions about exponentially high public debt: 1) How has US managed this high public debt over 10 years? 2) What is the relationship between this debt and the news “US dollar fell to 14-year low against the yen“? 3) What will happen if US no longer can sustain this burden?

How has United States managed to even ‘function’ as a state with this sky-scrapping public debt? There are several answers to this question. First of all, many countries are ‘giving’ billions of money to United States to support this exponentially high public debt. You might think, “Are those countries stupid enough to give away money to United States for nothing?” However, these countries are obviously not stupid to give away money to United States for nothing. It is because of the inevitable economic structure.

United States has the key currency, dollar, which is used widely around the world to buy, sell, and to settle economic problems. US Dollar is used as official currency or de facto currency in many countries. United States also has the strongest, biggest market in the world. With key currency and strong economy, United States is well trusted in the world. This trust allows US to cover up their public debt by issuing their own security, usually called government bonds. It is a governmental promise that any individual or nation who buys US treasury securities will be payed back in the future.

Basically, United States can borrow money (issue treasury security) based on its credit/trust and pay the debt by this money. So the public debt accumulates as US issue treasury security to countries and repaying the countries with the borrowed money. This creates a ‘vicious circle of public debt.’ Or other might call it ‘the ultimate economic motor that never stops.’ United States is actually enjoying this cycle as they are spending and letting the other countries do the paying.

The countries are in an inevitable structure where they have to buy US treasury. For example, Japan is one of the major foreign holder of US treasury security. Also Japan has the second most US dollar as a foreign country. The reason why Japan bought lots of US treasury security is that Japan’s major exporting country is United States. Japan gets payed in US dollars as they sell their product in US market. However, US manages to ‘take away’ the money by inflating US Dollar. For example, lets say that Japan earned $100 by selling a product in US. However, United States issues another $100 and causes inflation. The $100 Japan earned is now not as valuable as it was before United States issued $100. So Americans are basically spending and spending, and other countries are paying and paying for United State’s spending.

The following is a simplified graph of this accumulation of public debt.

The Pax Americana of spending and spending could come to an end with various factors threatening US economy.

Firstly, US dollar fell to 14-year low against the yen is considerably a big threat. As Japanese Yen has rose and US dollar fell, Japanese exporters are very frustrated as they cannot export their products. So the Japanese government is trying to sell its dollars stored up in the bank to cause depreciation of Japanese Yen. However, if they do this, sharp depreciation of US dollar will occur causing US dollar to value no more than a piece of paper. So the US government is pressuring Japanese government not to intervene in the foreign exchange market.

Counterfeit “Supernote” and the Real Dollar

Secondly, North Korea has printing facilities for printing counterfeit currency called ‘supernote.’ Supernotes are counterfeit currencies that are very difficult to figure out even with latest-technology equipments. Supernotes could be a threat to US dollar’s position as a key currency because it could depreciate the US dollar. I believe that this is the problem that US should be worried about not the nuclear bombs. If North Korea decides to release billions dollar worth of supernotes into foreign exchange market, US dollar will worth nothing in matter of days which is much destructive than the nuclear bomb that North Korea has. If billions of supernotes influx into the foreign exchange market, US dollar will lose its position as a key currency and other currencies such as European Euro or Japanese Yen will replace that position. As US dollar loses its position as a key currency, the United States government would not be able to issue a treasury security to raise the fund.

If United States cannot long sustain the public debt, United States as a nation could go bankrupted. Obviously, United States will not be able to pay the public debt if they cannot issue a treasury security if the dollar loses its position as a key currency. Also there is a possibility of war as World War I and II occurred because of economic reasons.

In conclusion, United States should better stop borrowing money and using the as an economic stimulus package. They should slowly get rid of the deficit spending and adjust their balance in order to decrease exponentially high public debt.

Little Reflection: I personally thought that this blog post was unorganized. I had some understanding of the situation, however, it was not firm nor clear. I actually understood more about the situation as I wrote the blog post. So, I felt this blog post was little bit unorganized in what I wanted to say.

Resource:

(1)GPO Access: US government’s official printing office. It has official data of US budget 2008.

(2) US Department of Treasury: Pie graph about foreign holders of US treasury security

06/01/1999
06/02/1999
06/03/1999
06/04/1999
06/07/1999
06/08/1999
06/09/1999
06/10/1999
06/11/1999
06/14/1999
06/15/1999
06/16/1999
06/17/1999
06/18/1999
06/21/1999
06/22/1999
06/23/1999
06/24/1999
06/25/1999
06/28/1999
06/29/1999
06/30/1999
07/01/1999
07/02/1999
07/06/1999
07/07/1999
07/08/1999
07/09/1999
07/12/1999
07/13/1999
07/14/1999
07/15/1999
07/16/1999
07/19/1999
07/20/1999
07/21/1999
07/22/1999
07/23/1999
07/26/1999
07/27/1999
07/28/1999
07/29/1999
07/30/1999
08/02/1999
08/03/1999
08/04/1999
08/05/1999
08/06/1999
08/10/1999
08/11/1999
08/12/1999
08/13/1999
08/16/1999
08/17/1999
08/18/1999
08/19/1999
08/20/1999
08/23/1999
08/24/1999
08/25/1999
08/26/1999
08/27/1999
08/30/1999
08/31/1999
09/01/1999
09/02/1999
09/03/1999
09/07/1999
09/08/1999
09/09/1999
09/10/1999
09/13/1999
09/14/1999
09/15/1999
09/16/1999
09/17/1999
09/20/1999
09/21/1999
09/22/1999
09/23/1999
09/24/1999
09/27/1999
09/28/1999
09/29/1999
09/30/1999
10/01/1999
10/04/1999
10/05/1999
10/06/1999
10/07/1999
10/08/1999
10/12/1999
10/13/1999
10/14/1999
10/15/1999
10/18/1999
10/19/1999
10/20/1999
10/21/1999
10/22/1999
10/25/1999
10/26/1999
10/27/1999
10/28/1999
10/29/1999
11/01/1999
11/02/1999
11/03/1999
11/04/1999
11/05/1999
11/08/1999
11/09/1999
11/10/1999
11/12/1999
11/15/1999
11/16/1999
11/17/1999
11/18/1999
11/19/1999
11/22/1999
11/23/1999
11/24/1999
11/26/1999
11/29/1999
12/01/1999
12/02/1999
12/03/1999
12/06/1999
12/07/1999
12/08/1999
12/09/1999
12/10/1999
12/13/1999
12/14/1999
12/15/1999
12/16/1999
12/17/1999
12/20/1999
12/21/1999
12/22/1999
12/23/1999
12/24/1999
12/27/1999
12/28/1999
12/29/1999
12/30/1999
12/31/1999
01/03/2000
01/04/2000
01/05/2000
01/06/2000
01/07/2000
01/10/2000
01/11/2000
01/12/2000
01/13/2000
01/14/2000
01/18/2000
01/19/2000
01/20/2000
01/21/2000
01/24/2000
01/25/2000
01/26/2000
01/27/2000
01/28/2000
01/31/2000
02/01/2000
02/02/2000
02/03/2000
02/04/2000
02/07/2000
02/08/2000
02/09/2000
02/10/2000
02/11/2000
02/14/2000
02/15/2000
02/16/2000
02/17/2000
02/18/2000
02/23/2000
02/24/2000
02/25/2000
02/28/2000
02/29/2000
03/01/2000
03/02/2000
03/03/2000
03/06/2000
03/07/2000
03/08/2000
03/09/2000
03/10/2000
03/13/2000
03/14/2000
03/15/2000
03/16/2000
03/17/2000
03/20/2000
03/21/2000
03/22/2000
03/23/2000
03/24/2000
03/27/2000
03/28/2000
03/29/2000
03/30/2000
03/31/2000
04/03/2000
04/04/2000
04/05/2000
04/06/2000
04/07/2000
04/10/2000
04/11/2000
04/12/2000
04/13/2000
04/14/2000
04/17/2000
04/18/2000
04/19/2000
04/20/2000
04/21/2000
04/24/2000
04/25/2000
04/26/2000
04/27/2000
04/28/2000
05/01/2000
05/02/2000
05/03/2000
05/04/2000
05/05/2000
05/08/2000
05/09/2000
05/10/2000
05/11/2000
05/12/2000
05/15/2000
05/16/2000
05/17/2000
05/18/2000
05/19/2000
05/22/2000
05/23/2000
05/24/2000
05/25/2000
05/26/2000
05/30/2000
05/31/2000
06/01/2000
06/02/2000
06/05/2000
06/06/2000
06/07/2000
06/08/2000
06/09/2000
06/12/2000
06/13/2000
06/14/2000
06/15/2000
06/16/2000
06/19/2000
06/20/2000
06/21/2000
06/22/2000
06/23/2000
06/26/2000
06/27/2000
06/28/2000
06/29/2000
06/30/2000
07/03/2000
07/05/2000
07/06/2000
07/07/2000
07/10/2000
07/11/2000
07/12/2000
07/13/2000
07/14/2000
07/17/2000
07/18/2000
07/19/2000
07/20/2000
07/21/2000
07/24/2000
07/25/2000
07/26/2000
07/27/2000
07/28/2000
07/31/2000
08/01/2000
08/02/2000
08/03/2000
08/04/2000
08/07/2000
08/08/2000
08/09/2000
08/10/2000
08/11/2000
08/14/2000
08/15/2000
08/16/2000
08/17/2000
08/18/2000
08/21/2000
08/22/2000
08/23/2000
08/24/2000
08/25/2000
08/28/2000
08/29/2000
08/30/2000
08/31/2000
09/01/2000
09/05/2000
09/06/2000
09/07/2000
09/08/2000
09/11/2000
09/12/2000
09/13/2000
09/14/2000
09/15/2000
09/18/2000
09/19/2000
09/20/2000
09/21/2000
09/22/2000
09/25/2000
09/26/2000
09/27/2000
09/28/2000
09/29/2000
10/02/2000
10/03/2000
10/04/2000
10/05/2000
10/06/2000
10/10/2000
10/11/2000
10/12/2000
10/13/2000
10/16/2000
10/17/2000
10/18/2000
10/19/2000
10/20/2000
10/23/2000
10/24/2000
10/25/2000
10/26/2000
10/27/2000
10/30/2000
10/31/2000
11/01/2000
11/02/2000
11/03/2000
11/06/2000
11/07/2000
11/08/2000
11/10/2000
11/13/2000
11/14/2000
11/15/2000
11/16/2000
11/17/2000
11/20/2000
11/21/2000
11/22/2000
11/24/2000
11/27/2000
11/28/2000
11/29/2000
11/30/2000
12/01/2000
12/04/2000
12/05/2000
12/06/2000
12/07/2000
12/08/2000
12/11/2000
12/12/2000
12/13/2000
12/14/2000
12/15/2000
12/18/2000
12/19/2000
12/20/2000
12/21/2000
12/22/2000
12/26/2000
12/27/2000
12/28/2000
12/29/2000
01/02/2001
01/03/2001
01/04/2001
01/05/2001
01/09/2001
01/10/2001
01/11/2001
01/12/2001
01/16/2001
01/17/2001
01/18/2001
01/19/2001
01/22/2001
01/23/2001
01/24/2001
01/25/2001
01/26/2001
01/29/2001
01/30/2001
01/31/2001
02/01/2001
02/02/2001
02/05/2001
02/06/2001
02/07/2001
02/08/2001
02/09/2001
02/12/2001
02/13/2001
02/14/2001
02/15/2001
02/16/2001
02/20/2001
02/21/2001
02/22/2001
02/23/2001
02/26/2001
02/27/2001
02/28/2001
03/01/2001
03/02/2001
03/05/2001
03/06/2001
03/07/2001
03/08/2001
03/09/2001
03/12/2001
03/13/2001
03/14/2001
03/15/2001
03/16/2001
03/19/2001
03/20/2001
03/21/2001
03/22/2001
03/23/2001
03/26/2001
03/27/2001
03/28/2001
03/29/2001
03/30/2001
04/02/2001
04/03/2001
04/04/2001
04/05/2001
04/06/2001
04/09/2001
04/10/2001
04/11/2001
04/12/2001
04/13/2001
04/16/2001
04/17/2001
04/18/2001
04/19/2001
04/20/2001
04/23/2001
04/24/2001
04/25/2001
04/26/2001
04/27/2001
04/30/2001
05/01/2001
05/02/2001
05/03/2001
05/04/2001
05/07/2001
05/08/2001
05/09/2001
05/10/2001
05/11/2001
05/14/2001
05/15/2001
05/16/2001
05/17/2001
05/18/2001
05/21/2001
05/22/2001
05/23/2001
05/24/2001
05/25/2001
05/29/2001
05/30/2001
05/31/2001
06/01/2001
06/04/2001
06/05/2001
06/06/2001
06/07/2001
06/08/2001
06/11/2001
06/12/2001
06/13/2001
06/14/2001
06/15/2001
06/18/2001
06/19/2001
06/20/2001
06/21/2001
06/22/2001
06/25/2001
06/26/2001
06/27/2001
06/28/2001
06/29/2001
07/02/2001
07/03/2001
07/05/2001
07/06/2001
07/09/2001
07/10/2001
07/11/2001
07/12/2001
07/13/2001
07/16/2001
07/17/2001
07/18/2001
07/19/2001
07/20/2001
07/23/2001
07/24/2001
07/25/2001
07/26/2001
07/27/2001
07/30/2001
07/31/2001
08/01/2001
08/02/2001
08/03/2001
08/06/2001
08/07/2001
08/08/2001
08/09/2001
08/10/2001
08/13/2001
08/14/2001
08/15/2001
08/16/2001
08/17/2001
08/20/2001
08/21/2001
08/22/2001
08/23/2001
08/24/2001
08/27/2001
08/28/2001
08/29/2001
08/30/2001
08/31/2001
09/04/2001
09/05/2001
09/06/2001
09/07/2001
09/10/2001
09/12/2001
09/13/2001
09/14/2001
09/17/2001
09/18/2001
09/19/2001
09/20/2001
09/21/2001
09/25/2001
09/26/2001
09/27/2001
09/28/2001
10/01/2001
10/02/2001
10/03/2001
10/04/2001
10/05/2001
10/09/2001
10/10/2001
10/11/2001
10/12/2001
10/15/2001
10/16/2001
10/17/2001
10/18/2001
10/19/2001
10/22/2001
10/23/2001
10/24/2001
10/25/2001
10/26/2001
10/29/2001
10/30/2001
10/31/2001
11/01/2001
11/02/2001
11/05/2001
11/06/2001
11/07/2001
11/08/2001
11/09/2001
11/13/2001
11/14/2001
11/15/2001
11/16/2001
11/19/2001
11/20/2001
11/21/2001
11/23/2001
11/26/2001
11/27/2001
11/28/2001
11/29/2001
11/30/2001
12/03/2001
12/04/2001
12/05/2001
12/06/2001
12/07/2001
12/10/2001
12/11/2001
12/12/2001
12/13/2001
12/14/2001
12/17/2001
12/18/2001
12/19/2001
12/20/2001
12/24/2001
12/26/2001
12/27/2001
12/28/2001
12/31/2001
01/02/2002
01/03/2002
01/04/2002
01/07/2002
01/08/2002
01/09/2002
01/10/2002
01/11/2002
01/14/2002
01/15/2002
01/16/2002
01/17/2002
01/18/2002
01/22/2002
01/23/2002
01/24/2002
01/25/2002
01/28/2002
01/29/2002
01/30/2002
01/31/2002
02/01/2002
02/04/2002
02/05/2002
02/06/2002
02/07/2002
02/08/2002
02/11/2002
02/12/2002
02/13/2002
02/14/2002
02/15/2002
02/19/2002
02/20/2002
02/21/2002
02/22/2002
02/25/2002
02/26/2002
02/27/2002
02/28/2002
03/01/2002
03/04/2002
03/05/2002
03/06/2002
03/07/2002
03/08/2002
03/11/2002
03/12/2002
03/13/2002
03/14/2002
03/15/2002
03/18/2002
03/19/2002
03/20/2002
03/21/2002
03/22/2002
03/25/2002
03/26/2002
03/27/2002
03/28/2002
03/29/2002
04/01/2002
04/02/2002
04/03/2002
04/04/2002
04/05/2002
04/08/2002
04/09/2002
04/10/2002
04/11/2002
04/12/2002
04/15/2002
04/16/2002
04/17/2002
04/18/2002
04/19/2002
04/22/2002
04/23/2002
04/24/2002
04/25/2002
04/26/2002
04/29/2002
04/30/2002
05/01/2002
05/02/2002
05/03/2002
05/06/2002
05/07/2002
05/08/2002
05/09/2002
05/10/2002
05/13/2002
05/14/2002
05/15/2002
05/16/2002
05/17/2002
05/20/2002
05/21/2002
05/22/2002
05/23/2002
05/24/2002
05/28/2002
05/29/2002
05/30/2002
05/31/2002
06/03/2002
06/04/2002
06/05/2002
06/06/2002
06/07/2002
06/10/2002
06/11/2002
06/12/2002
06/13/2002
06/14/2002
06/17/2002
06/18/2002
06/19/2002
06/20/2002
06/21/2002
06/24/2002
06/25/2002
06/26/2002
06/27/2002
06/28/2002
07/01/2002
07/02/2002
07/03/2002
07/05/2002
07/08/2002
07/09/2002
07/10/2002
07/11/2002
07/12/2002
07/15/2002
07/16/2002
07/17/2002
07/18/2002
07/19/2002
07/22/2002
07/23/2002
07/24/2002
07/25/2002
07/26/2002
07/29/2002
07/30/2002
07/31/2002
08/01/2002
08/02/2002
08/05/2002
08/06/2002
08/07/2002
08/08/2002
08/09/2002
08/12/2002
08/13/2002
08/14/2002
08/15/2002
08/16/2002
08/19/2002
08/20/2002
08/21/2002
08/22/2002
08/23/2002
08/26/2002
08/27/2002
08/28/2002
08/29/2002
08/30/2002
09/03/2002
09/04/2002
09/05/2002
09/06/2002
09/09/2002
09/10/2002
09/11/2002
09/12/2002
09/13/2002
09/16/2002
09/17/2002
09/18/2002
09/19/2002
09/20/2002
09/23/2002
09/24/2002
09/25/2002
09/26/2002
09/27/2002
09/30/2002
10/01/2002
10/02/2002
10/03/2002
10/04/2002
10/07/2002
10/08/2002
10/09/2002
10/10/2002
10/11/2002
10/15/2002
10/16/2002
10/17/2002
10/18/2002
10/21/2002
10/22/2002
10/23/2002
10/24/2002
10/25/2002
10/28/2002
10/29/2002
10/30/2002
10/31/2002
11/01/2002
11/04/2002
11/05/2002
11/06/2002
11/07/2002
11/08/2002
11/12/2002
11/13/2002
11/14/2002
11/15/2002
11/18/2002
11/19/2002
11/20/2002
11/21/2002
11/22/2002
11/25/2002
11/26/2002
11/27/2002
11/29/2002
12/02/2002
12/03/2002
12/04/2002
12/05/2002
12/06/2002
12/09/2002
12/10/2002
12/11/2002
12/12/2002
12/13/2002
12/16/2002
12/17/2002
12/18/2002
12/19/2002
12/20/2002
12/23/2002
12/24/2002
12/26/2002
12/27/2002
12/30/2002
12/31/2002
01/02/2003
01/03/2003
01/06/2003
01/07/2003
01/08/2003
01/09/2003
01/10/2003
01/13/2003
01/14/2003
01/15/2003
01/16/2003
01/17/2003
01/21/2003
01/22/2003
01/23/2003
01/24/2003
01/27/2003
01/28/2003
01/29/2003
01/30/2003
01/31/2003
02/03/2003
02/04/2003
02/05/2003
02/06/2003
02/07/2003
02/10/2003
02/11/2003
02/12/2003
02/13/2003
02/14/2003
02/18/2003
02/19/2003
02/20/2003
02/21/2003
02/24/2003
02/25/2003
02/26/2003
02/27/2003
02/28/2003
03/03/2003
03/04/2003
03/05/2003
03/06/2003
03/07/2003
03/10/2003
03/11/2003
03/12/2003
03/13/2003
03/14/2003
03/17/2003
03/18/2003
03/19/2003
03/20/2003
03/21/2003
03/24/2003
03/25/2003
03/26/2003
03/27/2003
03/28/2003
03/31/2003
04/01/2003
04/02/2003
04/03/2003
04/04/2003
04/07/2003
04/08/2003
04/09/2003
04/10/2003
04/11/2003
04/14/2003
04/15/2003
04/16/2003
04/17/2003
04/18/2003
04/21/2003
04/22/2003
04/23/2003
04/24/2003
04/25/2003
04/28/2003
04/29/2003
04/30/2003
05/01/2003
05/02/2003
05/05/2003
05/06/2003
05/07/2003
05/08/2003
05/09/2003
05/12/2003
05/13/2003
05/14/2003
05/15/2003
05/16/2003
05/19/2003
05/20/2003
05/21/2003
05/22/2003
05/23/2003
05/27/2003
05/28/2003
05/29/2003
05/30/2003
06/02/2003
06/03/2003
06/04/2003
06/05/2003
06/06/2003
06/09/2003
06/10/2003
06/11/2003
06/12/2003
06/13/2003
06/16/2003
06/17/2003
06/18/2003
06/19/2003
06/20/2003
06/23/2003
06/24/2003
06/25/2003
06/26/2003
06/27/2003
06/30/2003
07/01/2003
07/02/2003
07/03/2003
07/07/2003
07/08/2003
07/09/2003
07/10/2003
07/11/2003
07/14/2003
07/15/2003
07/16/2003
07/17/2003
07/18/2003
07/21/2003
07/22/2003
07/23/2003
07/24/2003
07/25/2003
07/28/2003
07/29/2003
07/30/2003
07/31/2003
08/01/2003
08/04/2003
08/05/2003
08/06/2003
08/07/2003
08/08/2003
08/11/2003
08/12/2003
08/13/2003
08/14/2003
08/15/2003
08/18/2003
08/19/2003
08/20/2003
08/21/2003
08/22/2003
08/25/2003
08/26/2003
08/27/2003
08/28/2003
08/29/2003
09/02/2003
09/03/2003
09/04/2003
09/05/2003
09/08/2003
09/09/2003
09/10/2003
09/11/2003
09/12/2003
09/15/2003
09/16/2003
09/17/2003
09/18/2003
09/19/2003
09/22/2003
09/23/2003
09/24/2003
09/25/2003
09/26/2003
09/29/2003
09/30/2003
10/01/2003
10/02/2003
10/03/2003
10/06/2003
10/07/2003
10/08/2003
10/09/2003
10/10/2003
10/14/2003
10/15/2003
10/16/2003
10/17/2003
10/20/2003
10/21/2003
10/22/2003
10/23/2003
10/24/2003
10/27/2003
10/28/2003
10/29/2003
10/30/2003
10/31/2003
11/03/2003
11/04/2003
11/05/2003
11/06/2003
11/07/2003
11/10/2003
11/12/2003
11/13/2003
11/14/2003
11/17/2003
11/18/2003
11/19/2003
11/20/2003
11/21/2003
11/24/2003
11/25/2003
11/26/2003
11/28/2003
12/01/2003
12/02/2003
12/03/2003
12/04/2003
12/05/2003
12/08/2003
12/09/2003
12/10/2003
12/11/2003
12/12/2003
12/15/2003
12/16/2003
12/17/2003
12/18/2003
12/19/2003
12/22/2003
12/23/2003
12/24/2003
12/26/2003
12/29/2003
12/30/2003
12/31/2003
01/02/2004
01/05/2004
01/06/2004
01/07/2004
01/08/2004
01/09/2004
01/12/2004
01/13/2004
01/14/2004
01/15/2004
01/16/2004
01/20/2004
01/21/2004
01/22/2004
01/23/2004
01/26/2004
01/27/2004
01/28/2004
01/29/2004
01/30/2004
02/02/2004
02/03/2004
02/04/2004
02/05/2004
02/06/2004
02/09/2004
02/10/2004
02/11/2004
02/12/2004
02/13/2004
02/17/2004
02/18/2004
02/19/2004
02/20/2004
02/23/2004
02/24/2004
02/25/2004
02/26/2004
02/27/2004
03/01/2004
03/02/2004
03/03/2004
03/04/2004
03/05/2004
03/08/2004
03/09/2004
03/10/2004
03/11/2004
03/12/2004
03/15/2004
03/16/2004
03/17/2004
03/18/2004
03/19/2004
03/22/2004
03/23/2004
03/24/2004
03/25/2004
03/26/2004
03/29/2004
03/30/2004
03/31/2004
04/01/2004
04/02/2004
04/05/2004
04/06/2004
04/07/2004
04/08/2004
04/09/2004
04/12/2004
04/13/2004
04/14/2004
04/15/2004
04/16/2004
04/19/2004
04/20/2004
04/21/2004
04/22/2004
04/23/2004
04/26/2004
04/27/2004
04/28/2004
04/29/2004
04/30/2004
05/03/2004
05/04/2004
05/05/2004
05/06/2004
05/07/2004
05/10/2004
05/11/2004
05/12/2004
05/13/2004
05/14/2004
05/17/2004
05/18/2004
05/19/2004
05/20/2004
05/21/2004
05/24/2004
05/25/2004
05/26/2004
05/27/2004
05/28/2004
06/01/2004
06/02/2004
06/03/2004
06/04/2004
06/07/2004
06/08/2004
06/09/2004
06/10/2004
06/11/2004
06/14/2004
06/15/2004
06/16/2004
06/17/2004
06/18/2004
06/21/2004
06/22/2004
06/23/2004
06/24/2004
06/25/2004
06/28/2004
06/29/2004
06/30/2004
07/01/2004
07/02/2004
07/06/2004
07/07/2004
07/08/2004
07/09/2004
07/12/2004
07/13/2004
07/14/2004
07/15/2004
07/16/2004
07/19/2004
07/20/2004
07/21/2004
07/22/2004
07/23/2004
07/26/2004
07/27/2004
07/28/2004
07/29/2004
07/30/2004
08/02/2004
08/03/2004
08/04/2004
08/05/2004
08/06/2004
08/09/2004
08/10/2004
08/11/2004
08/12/2004
08/13/2004
08/16/2004
08/17/2004
08/18/2004
08/19/2004
08/20/2004
08/23/2004
08/24/2004
08/25/2004
08/26/2004
08/27/2004
08/30/2004
08/31/2004
09/01/2004
09/02/2004
09/03/2004
09/07/2004
09/08/2004
09/09/2004
09/10/2004
09/13/2004
09/14/2004
09/15/2004
09/16/2004
09/17/2004
09/20/2004
09/21/2004
09/22/2004
09/23/2004
09/24/2004
09/27/2004
09/28/2004
09/29/2004
09/30/2004
10/01/2004
10/04/2004
10/05/2004
10/06/2004
10/07/2004
10/08/2004
10/12/2004
10/13/2004
10/14/2004
10/15/2004
10/18/2004
10/19/2004
10/20/2004
10/21/2004
10/22/2004
10/25/2004
10/26/2004
10/27/2004
10/28/2004
10/29/2004
11/01/2004
11/02/2004
11/03/2004
11/04/2004
11/05/2004
11/08/2004
11/09/2004
11/10/2004
11/12/2004
11/15/2004
11/16/2004
11/17/2004
11/18/2004
11/19/2004
11/22/2004
11/23/2004
11/24/2004
11/26/2004
11/29/2004
11/30/2004
12/01/2004
12/02/2004
12/03/2004
12/06/2004
12/07/2004
12/08/2004
12/09/2004
12/10/2004
12/13/2004
12/14/2004
12/15/2004
12/16/2004
12/17/2004
12/20/2004
12/21/2004
12/22/2004
12/23/2004
12/24/2004
12/27/2004
12/28/2004
12/29/2004
12/30/2004
12/31/2004
01/03/2005
01/04/2005
01/05/2005
01/06/2005
01/07/2005
01/10/2005
01/11/2005
01/12/2005
01/13/2005
01/14/2005
01/18/2005

Comments (9) »

Lehman Brothers’ Collapse

lehmanus_1477587c

“Lehman Brothers Holdings is closing its doors with more than $600 billion of debt — the biggest bankruptcy in U.S. history.” – Market Watch.

Lehman Brothers was one of the biggest global financial-services firms. The collaspe and its bankruptcy has shocked invester from around the world, provoking fluctuating stock market.

How has Lehman Brothers owed debt of $600 billion in the first place?

“This crisis is clearly deeper than anybody had imagined only a short time ago,” says Peter Stein, an associate editor at the Wall Street Journal in a CNN article.

During the attacks in September 11, 2001, it had its offices destroyed leaving them with great loss. Also, Lehman brothers were exposed to unsecured mortgages, and they had terrible debt caused by credit-crunch.

So these critical problems piled on until there was an economic crisis in 2008 to 2009 which exploded Lehman Brothers. So Lehman Brothers had problems that pervaded so deeply it eventually collapsed when there was an economic crisis which had ‘exploded’ Lehman Brothers.

Resources:

Watch Market: Lehman folds with record $613 billion debt

CNN: Lehman Brothers collapse stuns global markets

Leave a comment »