Lehman Brothers founded by Henry Lehman
In 1850, Henry Lehman together with his two brothers, Mayer and Emanuel, founded a firm which they named Lehman Brothers. The firm grew from vending dry goods to the cotton trade. Later on, after the passing on of Henry, Emanuel and Mayer expanded the scope of their business into brokerage services as well as commodities trading. As the United States economy expanded into an international warehouse, the company prospered over the following years. However, Lehman had to contend with many obstacles over the years.
The firm survived all the obstacles including two world wars, the railroad bankruptcies that occurred in the 1800s, the Great Depression that occurred in the 1930s, the collapse of long term capital management as well as the Russian debt default that occurred in 1998. Although the firm was able to survive the oast calamities, the collapse of the United States housing market ultimately brought it to its knees.
In the firms post earning conference call, the chief financial officer of the firm said the risks posed by the increasing home delinquencies were properly contained and hence would have a small impact on the company’s earnings. In August 2007, the firm’s stock fell significantly after the eruption of credit crisis with the failure of two Bear Stearns hedge funds. It is also in the same month that the firm eliminated twelve thousand mortgage-related jobs and also shut down its BNC unit. On June seventh, the firm announced its second-quarter loss of 2.8 billion dollars, after being shunned off by the American Express. The firm also reported that it had raised six billion dollars from investors by twelfth June.According to Belmont David, the firm also boosted its liquidity pool to 45 billion dollars, decreased its gross assets by 147 billion dollars, reduced its exposure to commercial and residential mortgage by twenty percent. The measures were perceived as being too little. Moreover, over the summer, the firm’s management made futile overtures to many potential partners, Again, the stock plunged seventy-seven percent in the first week of September, in 2008, amidst plummeting the need for equity in markets globally as investors questions the CEO’S scheme to keep the company independent by selling some of its management units assets as well as spinning off the commercial real estate assets.
Facing a 3.9 billion dollar loss, which included a 5.6 billion dollar write down, the company also announced an extensive strategic corporate restructuring effort. Consequently, Moody’s Investor Service also made it clear that it was reviewing the credit ratings of Lehman company and came up with a solution of avoiding Lehman’s rating downgrade which was to sell a majority stake to a strategic partner.
Activity II: Prepare a risk management plan for the project of finding a job after graduation.
After graduating while making a risk management scheme of finding a job, My main task would be to create an exclusive log of my risks which include which place to stay, my salary expectation, the job of my domain as well as being jobless. The next move would be to prioritize among the four risks and get the relevant risk.
The top relevant risk among the four is to find a job that will cater to the risk of a place to stay since i do not want to be jobless and also, i do not want to stay at home. However, finding a job is not an easy task and hence, i will have to do a swot analysis of my skill set and also go for numerous job interviews to start my career. Moreover, I will look out for my domain as well as salary expectation, however, my main priority will be to secure a job first then the rest i will take into consideration later.
All i need to do now is to develop a plan to fetch my job of interest, so i will apply for the job in various organizations as per my swot analysis, then wait for a call to attend an interview. After attending several interviews from all firms which will have invited me, then I will make a resolution of which firm I should work with after getting the job offers.
After getting the interview results, then I will check all the firms as per my job domain as well as my salary expectation to join the best firm.