On September 15th 2008… Remembering the Lehman collapse
Richard Fuld (ex-Lehman CEO) “The blame on the firm’s share price collapse lies on hedge funds and short sellers”
On September 15th 2008…
… Fundamentals were solid
… The balance sheet of the main central banks was 9 trillion dollars smaller than today.
…People blamed central banks for being irresponsible lowering interest rates to unjustifiable levels. Today we applaud them for printing money and lowering rates further
… Greenspan was to blame for lowering rates to 1%. Today we complain that central banks don’t reduce them below 0.5%.
… Total debt accumulated in G7 countries was 400% of GDP, today it’s 440%… Hedge Funds were to blame for the stock market crash, yet earnings estimates (Eurostoxx) had to be revised down 45%.
… European banks held 22% of outstanding sovereign debt as “no risk”…. Spanish savings banks had “better liquidity and solvency ratios than US ones”. Spain, according to PM Zapatero had “the strongest financial sector in the world”.
… Hiper-regulated European banks had debt to assets of “only” 25 times…. 60% of global banking system was state-owned or semi-state owned.