In the second quarter of 2008, Lehman suffered a real loss for the first time, amounting to US$3.2 billion.

As soon as the news came out, S&P immediately downgraded Lehman Brothers' credit rating to AA-.

At the same time, the Federal Reserve began sending inspectors to Lehman Brothers to investigate the true status of the funding gap.

There are signs that Lehman Brothers may not survive the summer.

Paper, after all, cannot cover the fire.

Fuld, the actual head of Lehman Brothers, knew very well that if he did not find investment, Lehman would be in doom for a century!

The first thing he thought of was his counterpart in the domestic financial industry, the famous stock tycoon Warren Buffett, who naturally became the first person Lehman Brothers sought help from.

According to Buffett's quotation, he will invest approximately US$5 billion in preferred shares with a profit margin of 9% and fully-priced stock options of US$6.

This amount of money may not seem like much, but it can bring enough market confidence to Lehman.

Unfortunately, Fuld rejected the investment outright because Lehman's stock price was still around $8 at that time, and he believed that Lehman had not yet reached the point where it needed to be cut off.

Since there was no hope domestically, Fuld turned his attention to the international market.

In his mind, he instantly thought of CITIC Group, a Chinese giant with a profound background.

However, he gave up this option after just a brief thought.

Because as early as the beginning of the year, before Bear Stearns went bankrupt, it had searched all over the world for a buyer.

At that time, CITIC Group made an acquisition offer to Bear Stearns, hoping to expand CITIC's influence in the global financial market by acquiring the American investment bank.

However, just when CITIC and Bear Stearns reached a cooperation and prepared to enter Wall Street ambitiously, Goldman Sachs "accidentally" leaked a "death email".

The email stated: The government will no longer provide guarantees for any Bear Stearns transactions.

Some members of the House and Senate also believe that CITIC Group’s acquisition plan may threaten the security and financial stability of the United States.

Not only that, Goldman Sachs traders also sold a large amount of Bear Stearns' shares in the stock market and privately revealed to major Wall Street institutions that "this company is dead and no one should take over."

After a series of negotiations and disputes, CITIC Group finally gave up its plan to acquire Bear Stearns.

This incident is regarded as an important contradiction and conflict between CITIC Group and Wall Street financial giants.

In the end, Bear Stearns did not wait for his savior and could only stand alone in the wind and rain until it filed for bankruptcy and was acquired by Morgan at a very low price.

The collapse of Bear Stearns once frightened CITIC Group, and it has stayed away from the U.S. financial market ever since.

Therefore, Fuld set his sights on South Korea, the island country, this time.

Min Yusheng, the current CEO of Korea Development Bank, once worked at Lehman in the early years.

Therefore, Fuld specially chartered a business jet to fly to South Korea, preparing to ask him for help.

At the beginning, Min Yusheng responded very positively to his old club's request for help, saying that he could invest US$4 billion to US$6 billion to acquire 25% of Lehman's shares.

Fuld was delighted to hear this.

The two sides immediately launched further consultations.

According to Min Yusheng's proposal, the current Lehman Brothers will be split into two banks.

One of the banks is a "good bank" with good operating conditions, and Korea Development Bank will acquire it at a real-time overflow stock price of 1.25 times, while the other bank is a "bad bank" with a large amount of bad debts, which Lehman will absorb on its own.

According to the usual negotiation rules, after you raise the price on the spot, you will definitely pay back the money on the spot.

Sure enough, Fuld immediately started to counter-offer after hearing about Min Yusheng's plan.

He believes that Min Yusheng's split plan is feasible, but at the price of acquiring a "good bank", Korea Development Bank should contribute 1.5 times the stock price, and should also purchase an additional 10 billion of Lehman Real Estate.

However, Min Yusheng was not happy.

Because time was clearly not on Lehman's side, Fuld dared to speak loudly, so he unilaterally stopped the acquisition under the pretext of intervention by South Korea's financial regulators.

Faced with this unresolved outcome, Fuld could only brace himself and continue to look for the next buyer.

He shifted his attention to Sumitomo Mitsui Banking Corporation in the island country.

This bank was formed by the merger of China National Bank, a subsidiary of the Sumitomo Foundation, and Sakura Bank, a subsidiary of the Mitsui Foundation, with total assets of up to 30 trillion yen.

Either of the two major consortiums behind it has the ability to acquire Lehman.

Unfortunately, he hit ashes again.

Sumitomo Mitsui Banking Corporation had only an indifferent reply to Fuld's visit: We are not interested.

Mid June.

When news broke that negotiations between Lehman and Korea Development Bank had broken down, Lehman's share price plummeted again - less than $4.3 per share.

At this time, Fuld has reached the point where he is really desperate.

Capital eyes around the world are looking at Lehman.

Fortunately, there is always a road ahead, and Lehman will not fall so easily.

Diamond, CEO of Barclays Capital in the UK, proposed an acquisition plan to Fuld.

After six hours of negotiations, Barclays finally decided to acquire Lehman Brothers after stripping off its toxic assets.

However, at this time, Lehman was no longer able to afford the capital required for restructuring. Wall Street, based on the principle of "goodwill" and willing to help organize the financing plan for the separation of Lehman's assets.

But in just the past two days, unexpected changes came again.

The heads of several Wall Street consortiums suddenly informed Lehman Brothers to terminate their financing cooperation due to the objections of Goldman Sachs and Morgan.

Also on the same day.

Barclays Capital’s acquisition plan was communicated to the ears of then British Chancellor of the Exchequer Darling.

After analyzing Lehman's financial situation, Darling made it clear that the British financial system was already in many difficulties. He was very worried that Lehman Brothers would drag this old British bank into the quagmire, so he refused to approve Barclays' acquisition.

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This chapter is not over yet, please click on the next page to continue reading! At this moment, Lehman Brothers’ stock price has dropped to only $3.65.

Several consecutive failed acquisitions made Fuld feel a deep sense of powerlessness.

He had invested too much emotion in the company he worked hard for, and it was a helpless move to sell it in tears. Therefore, his valuation often differed greatly from that of the buyer, causing Lehman to constantly miss sales opportunities.

In desperation, the crazy Fuld decided to make a desperate move, detonating a greater crisis and forcing Washington to withdraw from office.

In July 2008, Lehman Brothers, which had inside information, issued a report stating that Fannie and Freddie had a funding gap of as much as US$75 billion.

The so-called "Family and Freddie" refers to "Fannie Mae" and "Freddie Mac", which are responsible for establishing the secondary real estate market in the United States. (The two are equivalent to state-owned enterprises)

Of the $7 trillion in real estate loans issued by the U.S. banking system, Fannie and Freddie alone took in $4 trillion.

In the market, 60% of American banks hold bonds of these two companies, accounting for more than 50% of total assets.

Even Chinese financial institutions hold $340 billion of their bonds.

This amount is equivalent to one month's salary of people across the country in 2008.

Therefore, once the capital chain of Fannie and Freddie is broken, the American financial system will completely collapse.

In Fuld's view, Washington will not sit back and watch Fannie and Freddie go bankrupt, and will definitely introduce a rescue plan. By then, Lehman Brothers, a Wall Street giant, will definitely be saved.

The facts are indeed as Fuld imagined. On the day the report was released, the president of the San Francisco Federal Reserve also expressed a pessimistic view: America's real estate and banking systems may be even worse.

On that day, Fannie and Freddie's stock price fell by more than 15%, and the market was in panic.

However, despite all his calculations, Fulford still missed one important figure, that is his nemesis, U.S. Treasury Secretary Paulson.

He symbolically summoned the heads of major Wall Street banks to discuss how to rescue Lehman.

The meeting was attended by JPMorgan Chase CEO Jamie Dimon, Goldman Sachs’ current CEO Lord, John Mack of Morgan Stanley, representatives from Merrill Lynch, Citigroup and other financial institutions.

....

Everyone gathered together.

But what is dramatic is that this meeting is missing one of the most important figures, and that is the CEO of Lehman.

The result is naturally conceivable.

Treasury Secretary Paulson firmly stated that he was unwilling to provide guarantees for Lehman Brothers' bailout loans in the name of the government, and even refused to use "taxpayer" money to rescue bankers.

Jamie Dimon, director of the New York branch of the Federal Reserve, also rejected any rescue plan on behalf of the Fed.

There are many reasons they gave.

For example, Lehman's asset-liability ratio was too high, management's risk awareness and ability to handle crises were insufficient, risk control relied too much on mathematical and physical model technical analysis, there was no vigilance in conducting risk assessments in a timely manner, rapid sales of subprime debt, etc.

Maybe for them.

Today's financial market needs a dead monkey rather than a crazy monkey to warn other monkeys about the horror of bananas.

That time and that moment.
Chapter completed!