PA4. Title Alfredo Hernandez Paulson’s Impact on Lehman Brothers Collapse Texas Tech University.

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Presentation transcript:

PA4

Title Alfredo Hernandez Paulson’s Impact on Lehman Brothers Collapse Texas Tech University

Thesis The purpose of this literature review is to synthesize the studies of the investments that led to Lehman’s collapse, Henry (Hank) Paulson’s influence on the crisis, and the TARP act. The oldest research done for the topic was introduced as early as the day after Lehman Brothers filed for bankruptcy, yet the information was fresh and not completely finished, where interviewers still had speculations about the market. Most research on this topic has been done after the TARP act was introduced and when most Wall Street executives were being investigated by the U.S. government to find the reason behind the initiation of the Great Recession of

Subtopic Economist have studied the Great Recession of in recent years, which has led to a debated about Lehman Brothers holding a great amount of their company’s capital in mortgage loans that became toxic.

Subtopic Most current research regarding Hank Paulson’s influence on Lehman Brothers’ collapse, has focused on the actions and procedures that Paulson took while he was trying to contain the problem so the economy wouldn’t collapse as a whole.

Subtopic All research leads towards the aftermath, after Lehman’s collapse, the US could not afford another major bank to fail, thus congress had to pass the TARP (Troubled Asset Relief Program) act.

Conclusion After looking at studies on Lehman Brothers collapse and how Hank Paulson played a role in the decisions that led to Lehman’s failure and TARP. Mortgage loans that were sliced and diced by banks were the main focus by all authors. They all agreed that these toxic assets initiated the recession and the banks that held the most assets were the ones who were in the deepest trouble of failing. Of course, there were others factors that led to each bank’s personal problems, but it’s not the main focus of the research. Also Paulson’s decisions will always be criticized, should he had saved Lehman? More research should be done on the facts that led to Paulson’s decision of letting Lehman be the only bank to fail. Never the less, the TARP act did help stabilize the economy and end the Great Recession and to avoid such a financial crisis to happen again. It is known that banks are now too big to fail.

Works Cited Berlinger, JoeTyrangiel, Josh. "Hank Paulson On Facing The Abyss. (Cover Story)." Bloomberg Businessweek 4346 (2013): Military & Government Collection. Web. 26 June Chaudhuri, Saumitra. "OPINION: Remembering Lehman Brothers' collapse." Economic Times, The (India) 11 Sept. 2009: Newspaper Source. Web. 26 June International Business, Times. "Lehman Brothers Collapse: Where are Dick Fuld and Friends Now?." International Business Times 13 Sept. 2013: Regional Business News. Web. 26 June Paulson Jr., Henry M. "The Economic Collapse." Vital Speeches Of The Day 75.1 (2009): 5. MasterFILE Premier. Web. 26 June Schaefer, Steve. "Bernanke Fed Knew Not Saving Lehman In 2008 Was A Bet It Might Lose." Forbes.Com (2014): 8. Business Source Complete. Web. 26 June Thomas, Evan, and Michael Hirsh. "Paulson's Complaint." Newsweek (2009): OmniFile Full Text Mega (H.W. Wilson). Web. 26 June Tom Bawden, New York. "Paulson claims that he 'lacked the power' to save Lehman Brothers from collapse." Times, The (United Kingdom) n.d.: Newspaper Source. Web. 26 June Zachary, Goldfarb. "Putting out the ﬁre, stirring up ﬂames." Washington Post, The 5: Regional Business News. Web. 26 June 2014.