It was the summer of 2007. We waited for mortgage lending to explode (or implode). If you recall, Bear Sterns had problems that shocked everyone, HSBC announced the first subprime mortgage losses, and Lehman Brothers said Lehman was not associated or affiliated with subprime borrowers.
For many years it has been our opinion that predatory lending became the acceptable norm, followed by a period of aggressive Wall Street greed. When predatory became subprime, and with regulators totally asleep, these 25 institutions effected the entire world economy:
While the song and dance of mortgage blues and tainted paper certainly is not good for the United States, it is not good for other countries either. The true scale of the jobs disaster facing Britain is revealed today as experts issue dire warnings that up to half a million workers will lose their jobs over the next two years, as companies cut costs and scale back investment plans to survive the economic downturn. Karen Ward, chief UK economist at HSBC, calculates that almost a quarter of the workforce – seven million – are employed in the vulnerable retail and leisure industries. Many of those jobs will go away.
Speaking to the issue of regulators and the crash of Wall Street, “They just haven’t done a particularly good job,” said James Barth, a senior finance fellow at the Milken Institute, a nonpartisan research group based in Los Angeles. The same can be said for the entire Bush administration.
On July 19, 2007 Lehman Brothers rejected suggestions that they are exposed to subprime problems. Many companies made statements in the summer of 2007, in part because their shock and disbelief caused those companies to say just about anything. Remember Countrywide in July 2007? But we had a problem with Lehman Brothers rejection of exposure to subprime as soon as soon as they said it. Lehman Brothers always loved subprime and companies like Household International. How could they possibly NOT be exposed to subprime, as their 2007 statement suggested?