In the second quarter of 2008, Lehman reported its first actual loss of US$3.2 billion.

As soon as the news broke, Standard & Poor's downgraded Lehman Brothers' credit rating to AA-.

At the same time, the Fed began sending inspectors to Lehman Brothers to investigate the true state of the funding gap.

By all indications, Lehman Brothers may not survive this summer.

Paper, after all, can't contain fire.

Fulder, the de facto head of Lehman Brothers, knew that if he did not look for investment, Lehman would face a catastrophe for a hundred years!

The first thing he thought of was his counterpart in the domestic financial circle, the famous stock god Warren Buffett, who naturally became the first target of Lehman Brothers' help.

According to Buffett's offer, he will invest about $5 billion in preferred stock with a 9% profit margin and $6 in full-priced options.

This may not seem like a lot of money, but it can bring enough market confidence to Lehman.

But unfortunately, Forde rejected the investment, because Lehman's stock price was still around $8 at that time, and he believed that Lehman had not yet reached the day when he needed to cut his meat.

Since there was no hope at home, Forde turned his attention to the international market.

In his mind, he instantly thought of the Chinese giant with a deep background - CITIC Group.

However, he only gave up on this choice after only a little thought.

Because as early as the beginning of the year, before Bear Stearns went bankrupt, it had searched the world for a buyer.

At that time, CITIC Group made a takeover offer to Bear Stearns, hoping to expand CITIC's influence in the global financial market by acquiring the American investment bank.

However, when CITIC and Bear Stearns reached a cooperation and prepared to enter Wall Street ambitiously, Goldman Sachs "accidentally" leaked a "death email".

The email said: The government will no longer guarantee any of Bear Stearns' deals.

Some members of the Senate and House of Representatives also believe that the CITIC Group's acquisition plan could threaten the security and financial stability of the United States.

Not only that, Goldman Sachs traders also sold Bear Stearns stock in large quantities in the stock market, and privately revealed to major Wall Street institutions that "this company is finished, no one should take over".

After a series of negotiations and disputes, CITIC finally abandoned its plan to acquire Bear Stearns.

This incident is seen as an important contradiction and conflict between CITIC Group and Wall Street financial giants.

In the end, Bear Stearns did not wait for his savior, and could only stand alone in the wind and rain until he filed for bankruptcy and was acquired by Morgan at a very low price.

The downfall of Bear Stearns once made CITIC Group a frightened bird, and since then it has stayed away from the American financial market.

Therefore, Fuld set his sights on South Korea and the island nation this time.

Min Yu-sung, the current CEO of Korea Development Bank, used to work at Lehman in the early years.

Therefore, Fuld chartered a business airliner to South Korea, ready to ask him to help.

At the beginning, Min Yusheng did give a very positive response to his old club's request for help, saying that he could invest $4 billion to $6 billion to acquire a 25% stake in Lehman.

Fuld was overjoyed.

The two sides immediately began further consultations.

According to Min Yusheng's proposal, Lehman Brothers will now be split into two banks.

One of the banks is a well-run "good bank", which Korea Development Bank will acquire at a real-time spillover price of 1.25x, while the other bank is a "bad bank" with a large amount of bad debts, which will be absorbed by Lehman itself.

According to the usual negotiation rules, after the price is raised on the spot, the money will be repaid on the ground.

Sure enough, after hearing about Min Yusheng's plan, Fuld immediately began to bargain.

He believes that Min Yusheng's split plan is feasible, but at the price of the acquisition of "Good Bank", Korea Development Bank should contribute 1.5 times the share price, in addition to the purchase of an additional 10 billion Lehman real estate.

However, Min Yusheng was not happy.

Because time was clearly not on Lehman's side, Fuld dared to open his mouth, so he unilaterally halted the acquisition under the banner of intervention by South Korea's financial regulators.

Faced with this unagreed result, Fuld could only fight his spirit and continue to look for the next buyer.

He shifted his gaze to Sumitomo Mitsui Bank in the island nation.

The bank was formed by the merger of CNNC, a subsidiary of the Sumitomo Foundation, and Sakura Bank of the Mitsui Foundation, with total assets of 30 trillion yen.

Either of the two major consortia behind it has the strength to acquire Lehman.

Unfortunately, he hit the dust again.

Sumitomo Mitsui Bank's visit to Fulder's home had only one indifferent reply: we are not interested.

Mid-June.

When news broke down with the Korea Development Bank, Lehman's stock price plummeted again – less than $4.3 per share.

At this time, Fuld has reached the time to really burn his eyebrows.

Capital all over the world is looking at Lehman.

Fortunately, there is no endless road, and Lehman is not so easy to fall in a hundred years.

Diamond, CEO of Barclays Capital in the United Kingdom, proposed an acquisition plan to Fulder.

After six hours of negotiations, Balek finally decided to buy Lehman Brothers, which had divested its toxic assets.

However, at this time, Lehman could no longer afford the capital required for restructuring, and Wall Street, in line with the principle of "good faith", offered to help Luo Lehman with the financing plan for the separation of assets.

But just two days later, unexpected changes have arrived.

The heads of several Wall Street consortia abruptly informed Lehman Brothers to terminate their financing partnership, citing opposition from Goldman Sachs and Morgan.

Also on the same day.

Barclays Capital's acquisition plan was conveyed layer by layer, all the way to the ears of Darling, then Chancellor of the Exchequer.

After analyzing Lehman's finances, Darling made it clear that the British financial system was already in trouble, and he was very worried that Lehman Brothers would drag the old British bank into a quagmire, so he refused to approve the Barclays takeover.

At this moment, Lehman Brothers' stock price has fallen to only $3.65.

Several successive failed acquisitions made Fuld feel a deep sense of powerlessness.

He poured too much affection into the company he was fighting for, and it was really helpless to sell it with tears, so his valuation was often too far from the buyer's, which made Lehman constantly miss the opportunity to sell.

Desperate, the frenzied Fuld decided to take a desperate gamble and detonate an even bigger crisis to force Washington.

In July 2008, Lehman Brothers, which had inside information, put out a report saying that the funding gap between the two houses was as high as $75 billion.

The so-called "two-room" refers to the "Fannie Mae" and "Freddie Mac", which are responsible for establishing the secondary market for real estate in the United States. (Two equivalent state-owned enterprises)

Of the $7 trillion in real estate loans issued by the U.S. banking system, four trillion yuan were eaten by two houses.

In the market, 60% of American banks hold bonds from these two companies, which is more than 50% of total assets.

Even China's financial institutions hold $340 billion in their bonds.

This amount is equivalent to one month's salary of the people of the whole country in 08.

Therefore, once the two-house capital chain is broken, the financial system of the United States will completely collapse.

In Fuld's view, Washington will not sit idly by and watch the bankruptcy of the two houses, and will definitely introduce a rescue plan, and at that time, Lehman Brothers, as a Wall Street giant, will definitely be saved.

Indeed, on the day of the report's release, the president of the San Francisco Fed also expressed a pessimistic view that America's real estate and banking system might be even worse.

On the same day, the stock price of the two houses fell by more than 15%, and the market was in a panic.

However, Fufold still missed an important figure, and that was his nemesis, the US Treasury Secretary, Paulson.

He symbolically convened the heads of the major banks on Wall Street to discuss how to rescue Lehman.

The meeting was attended by representatives of JPMorgan Chase Bank CEO Jamie Dimon, Goldman Sachs CEO Lourder, Morgan Stanley's John Mack, Merrill Lynch, Citigroup and other financial institutions.

Everyone gathered.

Dramatically, however, the meeting lacked one of the most important figures, the CEO of Lehman.

The results are predictable.

Treasury Secretary Paulson was adamant that he was unwilling to guarantee Lehman Brothers' bailout loans in the name of the government, and refused to use "taxpayers'" money to bail out bankers.

Jamie Dimon, director of the Federal Reserve's New York branch, also rejected any bailout on behalf of the Fed.

There are also many reasons they give.

For example, Lehman's asset-liability ratio is too high, the management's risk awareness and ability to deal with crises are insufficient, risk control relies too much on mathematical, physical and chemical model technical analysis, does not have vigilance to conduct risk assessment in a timely manner, and quickly sells subprime debt.

Maybe for them.

In today's financial market, a dead monkey is needed more than a crazy monkey to warn other monkeys of the horror of bananas.

At that moment.

Lehman Brothers has become a mortal man in this game. (End of chapter)