lehman brothers holdings was the parent corporation t managed and directed the affairs of subsy airies and affiliates. while lehman had over 8,000 subsidiaries, approximately 100 plus were active and engaged in the business. lehman had offices in every major financial center in the world. lehman's business included derivatives, commercial loans, underwriting real estate, bank ownership and broker-dealer operations at the time filing the enterprise employed approximately 26,000 people, persons. over 10,000 employees were located in new york city. each day the enterprise engaged in thousands of transactions involving the movement of billions of dollars. the parent corporation acted as a bank for the lehman enterprise. generally each night all cash from operations was swept into cash concentration accounts at the holding company and each rning cash would be dispersed to various subsidiaries and affiliates as needed. lehman's cash needs were supported by substantial borrowings, a large portion of those borrowings were short term which negatively affected lehman's ability to refinance as th

why didn't they save lehman brothers the same way they saved bear sterns? the decision to let lehman go under after all turned out to be a catastrophic error and we're still suffering the consequences of it. >> brown: john, why does it matter, these two years later, what exactly happened? you heard what andrew said. what do you think? >> well, i think it matters just as a historical record. it was a terrible blunder in some ways. we still don't know all the facts behind that decision. bernanke has given his version of events. hank paulsen has given his version of events. andrew has given a version of events in his book. still the central mystery remains. why didn't anybody foresee that this would be a catastrophe and take steps to avoid it. we've had two years of global recession some of which could have been avoided if lehman brothers would have been rescued. >> one other point that i would make is, you know, lehman's failure was obviously a huge, huge problem and became the tipping point for the crisis. but in many ways to me the mistake is not as much let

when it comes to the failure of lehman brothers, there was a sharp split between the chairman of the federal reserve and the former ceo. >> the former chief executive of lehman brothers always argued that his bank could have been saved. the chairman of the federal reserve disagree. >> there was no other option. >> besides putting rescue packages together for other banks, ben bernanke told the commission that the situation at lehman brothers was hopeless and that his hands were tied. >> i wish we had saved lehman brothers, and we tried very hard to do so, but it was beyond our ingenuity or capacity to do ait. we were willing to be creative -- >> you did see it coming. >> we saw there were a lot of risks in laymen and other companies. the actual failure was not preordained. >> it was a sorry sight, staff leaving offices after the sudden collapse of the bank. the bankruptcy of the firm that once called this its headquarters stands out as an incident where the government did not step in. the financial system nearly collapsed. some on the commission had questions about how the bailouts we

thank you. >> reporter: this art, once adorned the executive suite at lehman brothers. noisseurs consider it an impressive collection of contemporary works. >> these were very smart people buying very smartly at the right moment. >> reporter: too bad collecting art wasn't lehman's main business. at the same time the investment bank of snapping up richter, and rouchenbergs, it was collecting office buildings around the globe, often paying top dollar. >> they were much better at picking art than commercial real estate. >> reporter: real estate proved to be the iceberg lehman couldn't or wouldn't see. it leveraged itself with reames of residential mortgages that it carved into shaky securities. when it all went bad, they toamed and neither washington's horses nor wall street's men could put the fabled bank back together again. >> this bankruptcy was 10 times the stiez of enron. >> reporter: $6 six billion to be exact. lawrence mcdonald traded jufng bonds at lehman for four years. his book blames the bank's collapse on arrigan in the board room, not feverish action on the tr

to have prevented the failure of lehman brothers. >> the conclusion is in the end lehman brothers was forced into bankruptcy not because they neglected to act responsibly or seek solutions to the crisis but because of a decision based on flawed information not to provide them with the support given to each of their competitors and other non- financial firms in the ensuing days. >> i think i can agree with the first half but not the second half. they try to very hard to save the company. they have a plan that they were in the process of implementing that failed which would have downsized the company selling off a bunch of assets and raising more capital. management was trying very hard. i think they failed not because the government was not willing to help them but because they were a victim of the circumstances and the economy and some bad decisions that they had made and they did not have time to get out of these. >> because of a decision based on flawed information, i believe that is a decision by the government, d you agree with that? >> i'm not sure what he is referring to. >> mr.

lehman brothers holdings was the parent corporation. they managed and directed the subsidiaries and affiliates. they had over 8000 subsidiaries, with about 100 active. lehman's business included derivatives, commercial loans, underwriting, real estate, bank ownership, and broker-dealer operations. at the time of the filing, they employed approximately 20,000 -- 26,000 people. over 10,000 employees were located in new york city. each day, they engage in thousands of transactions involving the movement of billions of dollars. the parent corporation was failing enterprise. generally, each night cash was swept into cash concentration accounts at the holding company. each morning, it was disbursed to various subsidiaries and affiliates as needed. lehman's cash needs were supported by substantial borrowings. a large portion of those were short-term, which negatively affected their ability to refinance as the economy slowed and was adversely affected by the subprime mortgage crisis. their liability was dependent on the confidence of the financi

went under, it shook the world. -- when at lehman brothers went under, it shook the world. might this go some way to pay off the creditors? >> there are 2 lucien frueds. how many are these going to make? >> 2 million pounds. it is but a drop on any ocean. >> to understand better, take this. the most of the valuable artwork, worth around 150,000 pounds. you need to million of them to pay off the debt. -- you would need 2 million of them to pay off the debt. you realize what they are apart out. you see, they are symbolic. very 2008. and how about this commemoratives plaque? 1500? do you think it will go for that? >> we have had a lot of interest in that. it could go into the trip the cabinet of some other bankers. >> in the coming is mementos of the clash that have drawn the most attention -- indeed, it is mementos of the clash that have drawn the most attention. bbc news. >> very curious to know who will be bidding for those. now, an exclusive interview with bbc person television -- president obama described comments made by the iranian president about the 9/11 acts as "offe

the multimillion dollar art collection belonging to lehman brothers goes under the hammer. in an exclusive interview with bbc persian television, president obama has called the comments made by mahmoud ahmadinejad about the september 11th attacks as it is usable. later, the iranian leader said that the american government might have been involved in the attack. president obama says that he believes that mr. -- that the iranian president's opinions are inconsistent with that of the american people. >> this was offensive, hateful, and for him to make the statement here in manhattan just a little north of ground zero where families lost their loved ones, people of all races and ethnicities who see this as a seminal tragedy of this generation, for him to make a statement like that was inexcusable. this stands in contrast with the response of the iranian people went 911 happened. there were candlelight vigils and a shared sense of humanity and sympathy that was expressed within iran. this shows once again the difference between how the iranian leadership and this regime operates

to have prevented the failure of lehman brothers. >> the conclusion is in the end lehman brothers was forced into bankruptcy not because they neglected to act responsibly or seek solutions to the crisis but because of a decision based on flawed information not to provide them with the support given to each of their competitors and other non- financial firms in the ensuing days. >> i think i can agree with the first half but not the second half. they try to very hard to save the company. they have a plan that they were in the process of implementing that failed which would have downsized the company selling off a bunch of assets and raising more capital. management was trying very hard. i think they failed not because the government was not willing to help them but because they were a victim of the circumstances and the economy and some bad decisions that they had made and they did not have time to get out of these. >> because of a decision based on flawed information, i believe that is a decision by the government, d you agree with that? >> i'm not sure what he is referring to. >> mr.

it is the second anniversary of the collapse of lehman brothers, which contributed to the near collapse of the u.s. financial system. many investors in europe lost massive amounts of money. in france, around 150 people joined a demonstration on wednesday. the accused large banks such as citibank of not having done enough to compensate the victims of the lehman brothers collapse. they also feel the german government failed to pass legislation. the european commission launched a bid wednesday to, for what it billed as wild west territory in the financial market. it is proposing -- it is proposing curbs on speculative trading. the european internal market commissioner said the rules were necessary to protect vulnerable economies and assure markets that all of europe is operating under a single rule book. >> see you stopped short of bands on speculative trading but issued an outline of new rules that would put markets under new scrutiny. here come speculative short- selling is conducted outside of stock exchanges, largely unregulated. >> we have to limit of this speculation by shedding ligh

. >> susie: fed chairman ben berannke says the fed had to let lehman brothers fail to avoid an economic disaster. >> tom: two years after the collapse of lehman, will things be different in the next financial crisis? you're watching "nightly business report" for thursday, september 2. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> tom: good evening, and thanks for joining us. ben bernanke said today it's a myth that lehman brothers could have been saved, perhaps preventing the financial crisis. susie, the fed chairman also says he's partly to blame for creating that myth. >> susie: tom, bernanke was the star witness on capitol hill today, answering questions from the financial crisis inquiry commission. the committee was commissioned by congress to figure out why lehman failed, and to answer the bigger question of what caused the financial crisis. >> tom: bernanke's testimony was a look at the lesson

as we reflect on two years since the fall of lehman brothers, my special guest now, robert wolf.bert, great to have you on the program. it's so good to see you again. i really wanted to talk to you about the panic two years ago because really it did feel like the economy and the financial system was on the verge of collapse. so you attended those marathon meetings, that famous meeting at the federal reserve with hank paulson and other ceos, the week before lehman brothers declared bankruptcy. what struck you most about that gathering? >> we walked into a room at the fed. you sit down and you see, you know, the ceos of all the u.s. bank and the regional ceos of the foreign firms there that was about -- my guess is a 10, 12 ceos there. and then i think everyone had an idea. it was about lehman. but certainly, you know, we didn't know that before the close. i think it was an environment that was a bit like, oh, wow. i can't believe we're all sitzádrq)e and what's the expectation? and really the first thing that came in is when paulson walked in with -- at that time new york fed chai

marks the second anniversary of the largest bankruptcy in its history investment bank lehman brothers holding six hundred billion dollars in assets fell to its knees becoming the tipping point of the financial meltdown in panic attack mode the u.s. stock market went through the biggest points fall in one day since the attacks of nine eleven it was sort of a curse at the same time it triggered off a number of other events you had ripples throughout the global financial system apart from losing its dignity and credibility wall street went unpunished. to us where do you see anyone getting one hundred fifty year sentence if you have learned any real lessons are they more frightened and worried yes or are they more careful yes can they afford not to take risks again no for more than a year now unemployment has remained at more than nine and a half percent however most analysts say that number is closer to twenty and it doesn't stop there what really hurt america was the focus on housing and the subsequent collapse in new york alone homelessness has gone up a staggering fifty percent women

so lehman brothers had a holding company and a rubber deal. i'm talking about only the holding company. >> for everyone's information, the appropriate dealer was eligible to bar from the primary dealers facility and was allowed to do so so the question was should we create a new lending provisions to allow loans to folding company? >> yes. >> we were able to do so so long as we had sufficient collateral and we were prepared to do that. i was ready to call the board together to do that if that was going to be helpful. when i was informed by those working on lehman's finances, it was far too literal collateral available to come to the window to get enough cash to meet what would be the immediate liquidity runs on the company. if we were to land, what would happen would be a continual run. not nearly enough collateral to provide liquidity to meet the run. the company would fail anyway and the federal reserve would be left holding this billliquid collateral, very large amount of it. it was our view we could not lend enough to save the company and

we'll talk about lehman brothers and looking back at the economic recovery and the economic crisis. >> rose: tuesday marks the secretary anniversary of the fall of lehman brothers, the event that helped create the deepest recession since the great depression. in july president obama signed too law comprehensive financial regulation to prevent the next economic crisis but worries about rising unemployment and threat of a double dip recession have taken precedence leading to the midterm elections. in a move to stimulate the economy president obama's proposed extending the bush tax cuts to individuals makes less than 250,000. >> we are ready this week if they want to give tax cuts to every american making 250,000 or less. (applause) >> that's 98, 97% of americans. new for any income over this amount, the tax rate would just go back to what they were under president clinton. this isn't to punish folks who are better off, god bless them. it's because we can't afford the 700 billion dollar price tag. >> and for those who claim that our approach would somehow be bad for growth and bad for sm

years ago when lehman brothers collapsed? me, i was doing six hours a day on the imminent ltdown of our entire financial structure. it was a good time. are we really any better off two years later? what should we have done differently and what, if anything, can we do about it now in the show starts right now. >>> all right. good afternoon to you. in america today, new rumblings from the volcano of voter discontent that is america. the headlines read tea party coup, bye bye bums and gop nightmare. but to us, this all looks more like the last days of pompeii. >> we can't stay here. we have to go. >> tea party power boiling over in two states, nearly toppling the establishment and a third. christine o'donnell storming the castle, as they are saying in delaware. congressman mike castle who has never lost a race before last night ousted. she will be the party's senate canned do the come november. and of course, guesses who support she has all of a sudden the day after the primary? none other than 2012 presidential front-runner mit

should lehman brothers have been saved? would that have maybe staved off the larger financial crisis? >> coming up next, a daily rundown exclusive, tim geithner, he was at the center the storm then in a different position. what did we learn from the lehman collapse and what's being done to restore confidence back to both wall street and main street. >>> but first, a look ahead at f the president's schedule today. you're watching "the daily rundown" on msnbc. my name is vonetta, and i suffer from allergies. [ male announcer ] we asked zyrtec® users what they love about their allergy relief, and what it lets them do. the thing i love most about zyrtec® is that it allows me to be outside. [ male announcer ] we bet you'll love zyrtec®, too -- or it's free. [ vonetta ] it is countdown to marshmallow time. [ woman laughs ] [ female announcer ] start your morning... hey. what are you doing up? i thought i'd take a drive before work. want to come? [ female announcer ] or make his day. yeah. [ female announcer ] maxwell house gives

so lehman brothers had a holding company and a rubber deal. i'm talking about only the holding company. >> for everyone's information, the appropriate dealer was eligible to bar from the primary dealers facility and was allowed to do so so the question was should we create a new lending provisions to allow loans to folding company? >> yes. >> we were able to do so so long as we had sufficient collateral and we were prepared to do that. i was ready to call the board together to do that if that was going to be helpful. when i was informed by those working on lehman's finances, it was far too literal collateral available to come to the window to get enough cash to meet what would be the immediate liquidity runs on the company. if we were to land, what would happen would be a continual run. not nearly enough collateral to provide liquidity to meet the run. the company would fail anyway and the federal reserve would be left holding this billliquid collateral, very large amount of it. it was our view we could not lend enough to save the company and

. >> susie: tomorrow is the second anniversary of the collapse of lehman brothers. we're now learning just how much closing the failed investment house cost in legal fees and accounting services. a report in today's "financial times" puts that number at $2 billion. but tonight's commentator thinks closing lehman cost far more than that. he's allan sloan, senior editor at large at "fortune." >> you'll be hearing a lot tomorrow about the anniversary of the lehman brothers bankruptcy, which, two years ago, came close to melting down the world financial system. what you probably won't hear, but should, is that lots of people initially thought it was great that the feds let lehman go under. six months earlier, there had been lots of complaining about the government rescuing bear stearns. so there was applause when lehman croaked. the market was being allowed to weed out the weak. wasn't life grand? but the applause was short- lived, because lehman's failure had unintended consequences. it started a run on money market funds when a money fund that held lehman paper broke

on the second anniversary of the bankruptcy of lehman brothers and the near collapse of the american financial system, an important new agreement to help shore up the banking system worldwide. international regulators in basel, switzerland reached a compromise on new rules that will governor banks. it will force them to double the minimum amount of capital that they will hold as a cushion against unexpected losses. but it gives them eight years to comply with the results. new regulations can limit the amounts banks can lend and could drive up costs for customers. that agreement helped push the markets up on monday, but they broke a four-day winning streak on tuesday. they rose again on friday. retail sales are on the rise. august seeing the biggest spike in five months, with a gain of 0.4 of 1%. that's helping to ease fears of a double dip recession because the american consumer makes up nearly 70% of the u.s. economy. and technology giant cisco will start returning some of the nearly $40 billion in cash it has to shareholders. the company says it will pay a dividend in 2011 of about

sent finances spiraling out of control they blame the collapse of the failed investment bank lehman brothers for driving the country into debt sparking high unemployment and foreclosures. those were the day's top stories up next start he speaks with harvard professor and russia expert timothy colton about historical dilemmas facing the country resetting relations with the u.s. and power sharing challenges faced by the kremlin stay with us. tim of the colton professor and chairman of the department of government at harvard university and an expert on russia says all questions today thank you very much for joining us mr colton you're a regular participant of the discussions club this serious topic is russia's history and future development why do you think russia is so interested in history today in two thousand and ten more than it was say ten years ago i think it reflects a trend which is not just russian but think this whole part of the world. history has come back so to say you know after the collapse of the old system of the soviet system there was of course much ferment about history at

. >>> today marks the anniversary of the collapse of lehman brothers. two years ago, lehman filed for bankruptcy triggering a tsunami of global financial credit. >>> tonight, be sure to watch brian williams on nbc "nightly news." >>> finally a look what's coming up later this morning on the "today" show. tea party candidate christine o'donnell talks to matt lauer about her big win in delaware, an after more than a year in jail, one of three american hikers detained in iran is finally freed. >>> keep it on this channel fon continuing local news, weather, sports and more. i'm lynn berry. thanks for watching "early today." just your first stop of the day, today, on your nbc station. have a good one. -- captions by vitac -- www.vitac.com

one of the panelists who testified about lehman brothers is reported by the reporters watching it today as getting a sympathetic ear from of the commission, suggesting that if the government had helped him, his company, as they had others, that lehman brothers would still be around today and would not have been a bankruptcy of the size it was which people thought had a cascading effect. this is a way to get into the topic about whether or not you think some companies in the future whether you would be supporting keeping them in business to preserve jobs and prevent the cascading in fact, or you reached the point where companies should be allowed to fail and they for their mistakes and there should not be government underwriting, bailout, loan guarantees, etcetera, for those who make mistakes and get into bad situations. that is our question. we will begin with a telephone call from california. tracy on the independent line. you are on the air. caller: i believe that everybody has the right to pursue happiness and if you work hard, you can get it. but as far as the bailout, i don't think

and i wanted to ask you about lehman brothers, for example. and you have said if it had been -- you knew before it was allowed to fail as this failure would be catastrophic. in mr. baxter said yesterday that there was a significant concern beside it the otc derivatives market would be severely impact to pay the failure. was this a concern of yours with respect to lehman brothers? didn't also enter into your concerns about bear stearns and wachovia and other large institutions with concentrated derivatives positions? >> yes, it's not the only aspect of interconnectedness. there's a lot of a lot of funny relationships on so on. but it certainly is an important one. it's very difficult to unwind these positions and when you lose a counterparty, then you have to replace your protection. and so, it was a significant concern and one indication of our concern about lehman was we took a lot of steps to try to put foam on the runway so to speak is the expression went. and one of those things is to work with otc markets to get them to address these conc

we don't want to go back to the days where we had banks like lehman brothers, bear stearns with $30 ofdebt for every dollar of equity. that's a bubble that will burst. >> digging in spurs and pulling back the reins at the same time. >>> we all watched as oprah surprised her audience with an eight-day trip to australia. what may surprise you is taxpayers down under will foot the bill. australian tourism department spent about $3 million dollars for the trip. he says it's money well spent. harpo will cover taxes any audience members incur. this is a nice vacation for americans. do you think the publicity is worth it for australia? >> no question. arguably, if you look how much money they have spent in years past, the shrimp on the barbie campaign. how much do you think that cost? $3 million to get that group of people over there and back safely. that will be some of the best they have spent in a long time. it's very smart. >> i think crocodile dundee movie did more from them than almost anything? >> and fosters lagger. >> and that cost $14 million, not including p & a. >> exactly. you kn