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Lehman Brothers Bankruptcy: Then and Now | LPL Financial Market Signals Podcast

September 20, 2018

Ryan Detrick, LPL Senior Market Strategist, interviews John Lynch, LPL Chief Investment Strategist, about the 2008 financial crisis. They both offer commentary on what caused the crisis and how it still affects investors today.

Regulation hadn’t kept up with the modernization of the financial markets, so we had an antiquated regulatory system on a modern, interconnected global financial marketplace

- John Lynch, Chief Investment Strategist at LPL Financial

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This week marks the 10-year anniversary of the Lehman Brothers bankruptcy, one of the most massive bankruptcies in United States history. The collapse of Lehman Brothers is nearly synonymous with the 2008 financial crisis, and the US financial system is still feeling the after effects. In this special podcast, LPL Research’s Ryan Detrick and John Lynch talk about some of the drivers behind the demise of Lehman Brothers and whether or not they could emerge again to damage the US economy.

Acknowledging that there were warning signs back then, the analysts also note that few people, if any, realized the pervasiveness and extent of high levels of financial leverage in the system. Once things started to crack, it because obvious just how fragile the system was. The fallout had—and continues to have—repercussions for investors and the public alike. According to Detrick and Lynch, the real losers have been the investors that got out of stocks and missed out on the 300% plus rally since March 2009.

Currently, the US is undergoing one of the longest periods of economic growth ever. Markets peak with excesses, but Detrick and Lynch say they aren’t seeing the same levels of excesses compared with other peaks.  Listen to the podcast to learn more about their observations.

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