Lehman Brothers field for bankruptcy on September 14, 2008. Only a week earlier it looked like a shaky company that would somehow survive. The result of Lehman’s failure was that contagion to spread to other large banks and insurance companies, resulting in the use of TARP funds to bailout the banks.
Today on Bloomberg there was talk that a Greek default could be like a Lehman failure for Europe. If (or should I say “when”) that happens then major European banks will suffer huge losses on their bond portfolios, making some banks insolvent. One news story in January estimated the …Read More