Lehman Brothers began in 1850 as a cotton brokerage run by three German immigrant brothers in Montgomery, Alabama. Over the next 158 years it became one of the pillars of Wall Street, an investment bank that had weathered the American Civil War, two world wars, the Great Depression, and every panic in between.
What it could not survive was its own balance sheet. In the 2000s Lehman loaded up on mortgage-backed securities and the leverage to hold them; when the US housing market turned, the firm was exposed far beyond its ability to absorb losses. Over the weekend of 13–14 September 2008, with no buyer and no government rescue, it ran out of road. On 15 September it filed for bankruptcy with around $639 billion in assets — the largest corporate failure in American history, and the starting gun of the global financial crisis. A century and a half of survival undone in seventy-two hours.
Worth remembering
- It began as a dry-goods store in Montgomery, Alabama, that accepted raw cotton as payment before becoming a cotton broker, then a bank.
- Across 158 years it survived the Civil War, the Panic of 1907, and the Great Depression — everything except a bet on mortgages.
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A graveyard tradition: leave a stone to show you came, and remembered.