People are lining up to buy your dolls and the prices are going far higher than you ever thought. Great deal, you think, as you max out your credit line and buy as many Tickle Me Elmos as you possibly can. In fact, he loves it so much that for every $1 you have in your account, he's willing to lend you $34. You approach your local banker about a loan and, naturally, he loves your idea. Every person in America will soon own a Tickle Me Elmo, maybe even two. "This isn't a Tickle Me Elmo bubble," you think to yourself, "this is a long-term trend. It's just before Christmas,1996, and as you watch overeager parents trample each other to buy Tickle Me Elmo dolls for their kids, you see an opportunity.
If you replace all of the acronyms invented by the brainiacs on Wall Street with references to things that Main Street understands, it becomes a lot easier to see how it all happened. So how did 235 years of rock-solid American finance disappear virtually overnight? Well, it's not as complicated as you think. Never posted a quarterly loss until last year. Now they will never again post a profit.īear Stearns' story is eerily similar. They had gone 14 years as a public company without ever reporting a single quarterly loss. More than 150 years later, after surviving the Great Depression, Black Monday, the savings and loan crisis and the dot-com bust, Lehman Brothers filed for bankruptcy protection. His brothers joined him six years later and, by 1858 they were busy turning cotton provided by local farmers into a cash crop - a business that didn't have anything to do with helping low-income families afford 27-bedroom McMansions. Lehman was founded in 1844 when Henry Lehman, a German immigrant, opened a small shop in Montgomery, Alabama.
And that's not even counting companies like Citigroup, Merrill Lynch, and Goldman Sachs that, while still in existence, have lost untold billions in market value and have laid off thousands of employees. You know the names by now: Countrywide Financial, Bear Stearns, IndyMac, Fannie Mae, Freddie Mac, Lehman Brothers, AIG. But, just like Gekko, the modern-day companies that followed that motto now find themselves wondering how everything could collapse so fast.
#American finance glenn beck movie
At least, that's what Michael Douglas' character Gordon Gekko claimed in the movie Wall Street.
0 kommentar(er)
