Lessons From Lehman

With the global markets scrambling for safety in light of the latest debacle that was the bankruptcy filing of Lehman Brothers, it seems that the end of the financial meltdown, brought about by the US mortgage crisis, may not come earlier as hoped for. The expectation is that some more financial companies may fall in the coming months. Although, authorities are saying they know more now than they did when Federal Reserve bailed out Bear Stearns months before, the statement does not provide any reassurance.

One theory is that Lehman Brothers, a century and half old top investment banking institution, may have been hoping for the Fed to step in as it did with the Bear Stearns case, to avert the Chapter 11 filing.

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However, Federal Reserve would not be able to sustain bailouts in the medium to long term. Makes me wonder what if Lehman beat Bear Stearns to the punch and filed for bankruptcy earlier. Would the Fed otherwise helped the failing financial institution?

But I'm past speculation at this point. If there's anything that can be gleaned from our current global financial woes it's that you can't put so much at stake on risks. You put up some, you gain some. This way, if you do lose, your losses won't be too damaging. In the case of Lehman Brothers the losses were just so overwhelming that stockmarkets everywhere are tumbling like a house of cards.

We are in the midst of a worldwide crunch and it is clearly not the time to blindly hope for big gains and jackpots in any financial dealings. Track records are reset to zero in circumstances like these, as the Lehman's case clearly shows. People and business should just focus on buckling down to increase productivity, save up as much resources and patiently wait for this financial storm to blow over. Only then can we attempt to reshape our financial futures.