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Video Booth RSSJoseph Stiglitz on the Fall of Lehman Brothers
Date posted: 9 October 2008
View this article online here:
http://sacsis.org.za/site/article/67.19
The reason Lehman Brothers went down is twofold, says Joseph Stiglitz. Not only were their assets bad, but their products were also very non-transparent. The company simply engaged in a great deal of accounting gimmickry and lost people's trust.
Financial markets are based on trust says Stiglitz, and what happened with Lehman Brothers is a breakdown of trust. No one wanted to turn their money over to helping Lehman Brothers because they didn't know what Lehman's assets were worth.
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