The Responsibility of Lehman Brothers to the World

Lehman Brothers Holdings is a company that is now 156-year-old. It met many near death incidents and reached its climax in 2006. Mr. Richard S. Fuld, Jr., CEO of Lehman Brothers administered the company thirteen years ago when it was then a subsidiary and changed Lehman from a small-time company in Wall Street to a very powerful company worldwide.

The CNN.com mentioned that in 1994 Lehman Brothers went public and had $75 million in earnings only and an equity return of 2.2%. An unbelievable turn came in 2005 where the firm had $32 billion in revenues, $3.2 billion in profit and an equity return of 19.4%. Lehman Brothers is placed at No. 16 among the list of companies in the Fortune 500.

Some say Fuld is aggressive, confrontational, and blunt as what is expected of a firm leader. Lehman Brothers became one of the amazing firms of Wall Street with the directions of Fuld. He used money, which he considers his very important tool to transform the sibling rivalry culture of the employees to teamwork and cooperation within the firm.

Emerging doubts about Lehman Brothers still arise and some critics are worried on the falling interest rates which is the major factor affecting the performance of the firm in the past ten years.

Okay, let us admit that there are others that will say the “big boss” is not much interested in giving safety to the company assets and is more interested in the earning bonus. Over the past two years, over $150 million in compensation was earned by the CEO and it is not for the benefit of the company’s shareholders but only for his own benefit. Disguised opportunists were said to stay in the company rather than those who give honest advice and guidance to Mr. Fuld.

With this bankruptcy filing news of Lehman Brothers Holdings on 15 September 2008 and all the other things said and done, the global economy’s future will suffer a lot most specifically the developing countries. Still the future will be based on those who are richer and will affect the smallest aspect of economic life and its policies.

As always, the saying goes “Great power comes with great responsibility.” I hope they are responsible enough for their action—as the world is at stake here.

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The Anatomy Behind the Bankruptcy of Lehman Brothers Holdings

The keyword here is leverage. Lehman Brothers Holdings borrowed too much money.

Lehman Brothers Holdings has outstanding liabilities of more than $600 billion, as according to the Reuters Report.

For everybody’s knowledge, Lehman Brothers Holdings really makes money by lending money for mortgage of homes. In addition, the more money that is lent, the more the profit there is.

In the years 1980s and 1990s and into the early part of 2000s, the prices of real estate really went up. Such mortgage companies like Lehman Brothers really saw the opportunity to earn additional money by giving out more loans to lenders of questionable status and who will most likely not qualify under such normal conditions. They created what they call ‘speculative mortgages’ that permitted people of questionable financial means to borrow right now at a lower interest rate and payments are lowered with the assurance of paying the loan back at a later time with such higher interest rates.

Both parties, the home buyers and Lehman Brothers, anticipated that the real estate in the USA will still continue to appreciate, thus allowing the loan borrowers to continue when their income increase as well as the value of their home. Interest rates of the new loans are fixed and made affordable to buyers.

In the meantime, the real estate market reached its highest point. The prices of real estate remained steady at ten to twenty percent a year. Those affected first were the speculators located in the areas where people were buying their second homes or what they call their vacation homes. The plan of the speculators is that they will buy now and then sell it later at a profit or what they call ‘flipping land’.

When the market became idle and declined eventually, the investors could no longer flip and began to lose money. These kinds of speculative investments soon went on the market, and the demand for the market was reduce when the investors are no longer purchasing. Investors in due course are no longer buying and there was a reduced market demand. Investors soon filled up the market with real estate properties and decreasing prices.

This situation doubled up as more and more people are into the falling market trap. In time, Lehman Brothers and other banks that extended such speculative loans hit an adjustment point and the result is an increase in the interest rate of the mortgages with the banks. Some interest rates are very severe causing loan payments to swell.
This situation was further aggravated for the rest of the economy, as the increased expected income never happened. In addition, mortgage payments severely redoubled and people eventually failed to pay their mortgages. The people who plan to refinance later learned that their homes did not appreciate but had fallen in value.

Their houses were worth less and they owed more on their mortgage loans. At present, there is no bank that would refinance since bank would not lend more than what a house is worth. This resulted to defaulting by these folks while they cannot afford to pay the new payment price and could not refinance to easier affordable terms.

High-performing banks with better conservative lending policies will likely overcome this kind of predicament. Lenders like Lehman Brothers and other banks in higher stages of speculative loans are the ones very much affected. Since foreclosure sales are now bringing in less money than what the person owed, people have properties due for foreclosing.

Losing ‘faith’ in the ability to loan repayment forced Lehman Brothers Holdings in what they call a liquidity crisis. They say, in banking you borrow money in order to make money. If no one will offer you a loan, you cannot make money and therefore, you fail.

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Educating Yourself on Money and Savings

Ongoing Education

There was a survey conducted on retired Americans where about sixty-eight percent prefer to continue their work after retirement but not for monetary reasons. Another survey said around thirty-seven percent of the older people said that ongoing education plays an essential part in their retirement plans.

Bear in mind that being rich doesn’t necessarily mean that you will be happy. You will be satisfied, yes…and you may have enough riches. This is a condition where your financial resources at present will be able to support your lifestyle in a long time period even if you will not work to earn an income. What will be your purpose in life if you are in that position already? Just remember that at the end of the day, it is what you will accomplish in life that will make you happy. Do continue in improving yourself through an ongoing education and you will find self-satisfaction and fulfillment within yourself.

HOW WILL YOUR MONEY EXPAND?

As your savings increase, the need in being financial literate and the need for knowledge in planning will also increase. It is vital that the financial plan start now before it is too late.

Before setting up your financial goal, you should first and foremost know where you are situated. Your money will not work for you if you don’t know the means that will be able to help you. Discover how the financial goals will be met and ensure that you do everything possible to reach those objectives.

If some money is already saved, this means that you already comprehend that saving money can be developed into a good habit. I know it is hard to start at first but if you follow a plan on how to save, it will become easy eventually. Always bear in mind that you need to have your first dollar before you reach your first million dollars.

Can you picture on how much you will earn if you work doubly hard and you work smarter at the same time?

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The New Browser in Town—the Google Chrome

There are many different kinds of browsers that you can use in the internet nowadays like Internet Explorer (in version 8.0 already), Mozilla Firefox (in version 3.0), the Netscape Navigator, the Safari browser (exclusive for Mac users) among others.

Did you know that Google joined the race in the development of a new browser? This open-sourced browser is called the Google Chrome and since the soft launching of it on 1 September 2008, many really appreciated the Chrome.

The Chrome’s new features are professional and clean. Every step that you click on the browser is very functional; it even has an incognito page where no trace can be seen of all the browsed pages made. The registry numbers and the cookies are not recorded as you are browsing through the incognito mode and the bookmarks are not stored in the said mode until you return to the original page. This is really a big difference indeed from the other browsers in the Internet.

But it seems that Google forgot one thing that is most especially important to bloggers like me. There is no Google toolbar yet that is available for Chrome and its feature of a page rank is what I really needed in the said toolbar. So what I do now to check the page rank of my blog and whatever blog I am browsing is still make use of Firefox. But overall I still much prefer Chrome aside from having all the feature of Internet Explorer and Firefox, it is almost five times faster than the two mentioned browsers combined.

You may try to click on a new tab in Chrome and you will be astounded at the screenshots you recently browsed is displayed in that page. If you like to go back to your favourite page, it will be not that difficult in addition to the latest bookmark that you made and imported from the pages of Firefox and Internet Explorer are also shown at the right column demonstrates the very organized Chrome.

Google Chrome is still in its beta version, but I can say it is good enough as it is able to handle HTML professionally and contents are gripped without any worries of having a crash mode and the concerns of stammering between words. And it is simple; the reason Google is fast enough for any one who will browse the new browser.

Another good feature of the web browser of Google is now made portable and is called Chromium.


All you have to do is unpack and run the entire program settings saved in the Chrome folder while the settings of the user go to the PROFILE folder. Some of the key features of the Chromium (Portable Google Chrome) are one box for everything, new tab page, application shortcuts, dynamic tabs, crash control, incognito mode, instant bookmarks, importing settings, safe browsing and simpler downloads.

Even if Google Chrome is not that original in terms of its features, Google Chrome is a browser with well-balanced features. So expect more updates of these open-sourced browser for the benefit of all.

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Why You Should Continue Working and Saving

Some people come to a point in their lives wherein they ask themselves: “I have worked hard, earned money, and saved. Why should I continue working and saving?”

Peter, a college graduate, doesn’t have a permanent job. He spends most of his time drinking with friends or playing computer games. His principle is: “I will not work too hard. I will enjoy my life because I may die tomorrow.”

Frank is just the opposite of Peter. He works day and night and does not have time to relax. His principle is: “I need to work as hard as best as I can, so I can build up my savings and retire comfortably.”

Who has the better viewpoint? That will really depend on your outlook.

Younger people will likely choose Peter’s principle. But when one day you find yourself broke, out of a job, and without any new skill, you will probably think: “I wish I had enjoyed myself less and worked more” or, “I wish I kept some of the money I earned and let it grow for my retirement.”

Those who choose the principle of Frank will later on realize that it is no better than Peter’s happy-go-lucky attitude. Because if you work away the best years of your life to earn more money, and one day you will find out that you are terminally ill, then everything you have worked for will have no purpose.

With the right approach and obedience to authority, the major factor is to embrace a lifestyle that is based on a financial principle that is impartial and reasonable. Majority of the people want to have the convenience and everything in life which are, to name a few, a relaxed lifestyle, more than enough earning, enough money for retirement, and the opportunity to enjoy and have fun while still young.

It is a nice feeling to have all of the items mentioned above. This is possible to be achieved with your obedience to authority and with the right attitude and approach. First and foremost, your financial status must sink inside yourself and what you really want to do with the resources that you have at the moment.

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OEX options—The Strength in Business

Learning stock trading online is an option for every business enthusiasts, and a very convenient way of educating oneself of the trade fundamentals. OEX options is a site that guides everyone to do the basics of day-trade and short-term stock trading, in a proper and convenient way of pre-market alerts and good instructional options trading of stock.

OEX options promises that aside from the trading signal of daily options which is good for traders, the website imparts, aside from pre-market alerts, education for day trading, e-Mini trading as well as Russell e-Mini Futures trading and utilizing the S&P 100 (OEX). It can be seen as a perfect benchmark for online option trading and a cash derivative stock index that is notable for day-to-day trading.

Supports such as a 130 page guidebook of OEX options will make you up and about in the online options trading business. They will identify eight key areas as they provide you with pre-market alert for a successful day-trading endeavor. Email subscription will give you private mentoring through the pace and comfort of your time, imparting skills and techniques for an effective trading.

The peace of mind and comfort of having an expert that takes care and guide you through the handling process at every nook and cranny of trading business will maximize every potential outcome there is and seizing opportunities for your full advantage. The strength of every business is in the know-how and OEX options have it for you.

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Avoid the Trap of Overspending in your Business

In putting up your new business and with much enthusiasm especially if you a new entrepreneur, you may fall into this trap and face the most not detrimental situation. You can follow these six practical tips in minimizing expenses and diminishing outflows of cash so as to avoid yourself and your business into falling into the overspending trap.

Overstocking of Inventory. In as much as you would like to benefit from the volume discount of the supplier, maintaining an inventory that will overstock will be a bad deal as it will entail more costs. You might order an initial inventory that is way above your normal operating requirements.

High Rental Cost. You may get tied for the cash due to the high rental cost as you may be able to get an office space that is too big for your business that is starting up. It may be hurting more for the business if the business will not pick up sooner than expected.

Too Many Employees. Avoid hiring as much employees as what you really need. To avoid this and avoid your payroll to balloon, better make sure first if you or the manager will be able to handle all the functions of the positions needed in the business.

High Depreciation Cost. It is not wise to buy the best of the office equipments and furniture if they are not as important to the business success. This is considered a big setback to the initial investment in your capital and will also amount to high expense in depreciation.

Credit Line Abuse. There are times when you will end up more unnecessary debt when your bank offers you a very high credit line and you will be lured in dealing your credit line as an additional capital infusion. And in time you will indulge to go on an expansion stage and you will invest so much on capital expenditures. And normally you use financing in a short term level for the long term investment, however you will begin to experience problems in your cash flow and abnormally high costs in interest.

Expenses are minimized and cash outflows will be controlled, therefore no more overspending traps for your business. I hope I helped you with these tips this time around.

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