On September 15, 2008, Lehman Brothers filed for bankruptcy protection after the government refused to bail out the company. The collapse of Lehman Brothers left its creditors with significant losses. One of its creditors, the Reserve Primary Fund, a huge money market fund, said it would break the buck, meaning that the fund had lost money and could not fully pay back its investors. This set off a panic. Investors started withdrawing money from all money market funds. The credit markets collapsed. Both investors and financial institutions knew that Lehman wasn’t the only Wall Street firm with solvency issues. The entire American financial system faced a crisis of confidence. No one wanted to lend to anyone else. Loan yields soared through the stratosphere. Businesses and consumers could no longer afford to get loans. The global economy started to collapse.
Our government wanted this to happen. It wanted to use the crisis to put pressure on other governments. However, I don’t think events unfolded in the way they imagined.
Bow down. Bow down.