The 2008 financial crisis · September 2008
The Lehman Weekend
It is Friday night. Lehman Brothers needs a path before markets open on Monday.
- Ages
- 16 to 18
- Time
- About 20 minutes
- Shape
- 3 decisions and a defense
Part 3 of 3 in the series Holding It Together
The situation
After a surge in risky home lending from 2004 to 2006, losses spread through mortgage securities and short-term lending markets. Bear Stearns was rescued in March 2008. Fannie Mae and Freddie Mac were taken over by the government on September 7.
On Friday, September 12, officials from the Treasury and the Federal Reserve and the heads of Wall Street's biggest firms began a weekend search for someone to buy Lehman Brothers.
Your teen is in that room, choosing among the options officials actually weighed, with public anger over bailouts rising outside.
The background is real. The decisions are an imagined game set in it, so your teen can practice the same kind of reasoning. What really happened is shown only after your teen writes a defense.
What it builds
Tracing how one firm's fate ripples through others, and weighing fairness against panic.
Weighing trade-offs
Names what is gained and lost for each option and chooses on purpose.
Seeing ripple effects
Traces second- and third-order effects through the system.
Judging risk
Names likely and severe risks and how to reduce them.
Seeing other sides
Explains how other players see it and predicts their moves.
Subjects it touches: Economics, History, Government. It sits beside your core curriculum; it doesn't replace it.
Try the first decision
A short preview. It has no AI and saves nothing. Want two minutes with the background first? Try a mission free
Decision 1 of 3 · Preview, no AI, nothing saved
It is Saturday, September 13, 2008. Lehman has about $600 billion in assets and no buyer willing to move without government help. The Fed has legal limits on lending without enough collateral. Anger over bailouts is rising, and another giant, AIG, is wobbling. You must choose a path before Monday.
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