The Jewish Family Who Built Wall Street's Most Famous Bank—And Its Most Famous COLLAPSE (LEHMAN)

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The Immigrant Brothers Who Built Wall Street's Greatest Dynasty and the Man Who Burned It Down in a Weekend.

Three Jewish brothers fled religious persecution in Bavaria with almost nothing. They started selling fabric from a wooden cart in Alabama, built a cotton brokerage during the Civil War, and transformed their small business into one of the most powerful financial institutions in history. For 158 years, Lehman Brothers survived every crisis America threw at it. The Civil War. Two World Wars. The Great Depression. The dot com crash. Then in September 2008, over a single weekend of failed negotiations and political calculations, it all collapsed. This is the story of how Henry, Emanuel, and Mayer Lehman built an empire from nothing, and how Dick Fuld, the man who called himself the Gorilla of Wall Street, destroyed everything they created while keeping his half billion dollar fortune intact.

🔬 THE ECONOMICS:

The Lehman collapse provides a masterclass in systemic financial risk and the mechanics of institutional failure. Investment banks operate on leverage, borrowing approximately 30 to 44 times their actual capital to amplify returns. This model generates enormous profits when asset values rise but creates catastrophic vulnerability when values fall. Lehman's balance sheet contained concentrated exposure to commercial real estate and mortgage backed securities, asset classes whose values depended entirely on continued housing price appreciation.

The concept of too big to fail emerged from interconnectedness rather than size alone. Lehman maintained derivative contracts and trading relationships with virtually every major financial institution globally. When it filed for bankruptcy, counterparties faced immediate uncertainty about the value of their claims, triggering a liquidity crisis that froze credit markets worldwide. The resulting contraction destroyed an estimated 10 trillion dollars in global wealth and caused unemployment to rise from 6.1 percent to 10 percent within thirteen months.

📚 SOURCES AND FURTHER READING:

Sorkin, Andrew Ross. Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System and Themselves. Viking Press, 2009.

McDonald, Lawrence G. and Robinson, Patrick. A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers. Crown Business, 2009.

Financial Crisis Inquiry Commission. The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. U.S. Government Printing Office, 2011.

Valukas, Anton R. Report of the Examiner in the Chapter 11 Proceedings of Lehman Brothers Holdings Inc. United States Bankruptcy Court Southern District of New York, 2010.

Birmingham, Stephen. Our Crowd: The Great Jewish Families of New York. Harper and Row, 1967.

Geithner, Timothy F. Stress Test: Reflections on Financial Crises. Crown Publishers, 2014.

Paulson, Henry M. On the Brink: Inside the Race to Stop the Collapse of the Global Financial System. Business Plus, 2010.

Bernanke, Ben S. The Courage to Act: A Memoir of a Crisis and Its Aftermath. W.W. Norton, 2015.

Admati, Anat and Hellwig, Martin. The Bankers New Clothes: Whats Wrong with Banking and What to Do about It. Princeton University Press, 2013.

Gorton, Gary B. Slapped by the Invisible Hand: The Panic of 2007. Oxford University Press, 2010.

📖 ABOUT THIS CHANNEL:

This video was created for educational and informational purposes with the goal of widening public understanding of financial history, institutional economics, and systemic risk. We believe informed citizens make better decisions about the systems that shape their lives. Every script is written by humans through extensive research and primary source analysis. Our visuals and storyboard concepts are developed internally by our creative team through collaborative brainstorming sessions. We are committed to providing accurate, valuable, and thought provoking content that respects our viewers intelligence and curiosity.