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The September 15, 2008 bankruptcy of Lehman Brothers raised concern about Reserve Primary's holdings of Lehman-issued paper, which then made up 1.2% of its portfolio, as well as its other financial-sector paper. Among money market funds, Reserve Primary was especially vulnerable due to its lack of a parent company that might be able to ...
Lehman quickly became a force in the subprime market. By 2003 Lehman made $18.2 billion in loans and ranked third in lending. By 2004, this number topped $40 billion. By 2006, Aurora and BNC were lending almost $50 billion per month. [2]:129. Lehman had morphed into a real estate hedge fund disguised as an investment bank.
According to Bernanke's conversations with Valukas, Treasury, along with the Fed and the New York Fed, was "trying to pressure Fuld to be more aggressive" but they were conscious of their ...
According to bankruptcy examiner Anton Valukas, the seeds of Lehman's Sept. 15, 2008, bankruptcy were sown in 2006, aggressively fertilized throughout 2007 and 2008's first two quarters, and ...
Lehman had been in talks to be sold to either Bank of America or Barclays but neither bank wanted to acquire the entire company. [125] September 16, 2008: The Federal Reserve took over American International Group with $85 billion in debt and equity funding. The Reserve Primary Fund "broke the buck" as a result of its exposure to Lehman ...
Apparently, Lehman had to route Repo 105 transactions through a British affiliate because no law firm in the United States would offer a legal opinion on the accounting treatment Lehman wanted to use.
If the variance does exceed $0.005 per share, the fund could be considered to have broken the buck, and regulators may force it into liquidation. Buck breaking has rarely happened. Up to the 2008 financial crisis, only three money funds had broken the buck in the 37-year history of money funds.
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