The 2008 Financial Crisis & Lehman Brothers
The 2008 Financial Crisis refers to the period between 2008 and 2013 which brought severe economic downturn with low growth and rising unemployment. Partly caused by Wall Street banks and their subprime mortgage-backed securities, Behold the Dreamers features one such investment bank quite heavily: Lehman Brothers.
Lehman and Subprime Mortgages: At the time of the 2008 Financial Crisis, Lehman Brothers was the world’s fourth largest investment bank with some 25,000 employees across multiple countries. Besides investment banking, Lehman had expanded into loan origination, acquiring five mortgage lenders between 2003 and 2004. Some of these acquired lenders specialized in doling out subprime mortgages, which were given to borrowers with weaker credit who would not ordinarily be able to obtain a mortgage.
The Writing on the Wall: In order to create an enticing product for investors, banks like Lehman Brothers would package mortgages (many of which were subprime) into mortgage-backed securities (MBSs) which were then sold to the general public and labeled as great, safe investments. However, as housing prices began to fall in 2006, many subprime borrowers began to default on their payments, revealing the risky nature of these MBSs. Despite the writing on the wall, Lehman Brothers continued to originate subprime mortgages and increased its real estate investments so that by the end of fiscal year 2007, the firm held some $111 billion in real estate-related assets and securities. A number double what it had been in the previous fiscal year.
As the real estate market weakened and investors expressed serious doubts about real estate assets and securities due to their lack of liquidity, investors began to lose confidence in Lehman Brothers and its peers. Bear Stearns was the first to go under and narrowly avoided bankruptcy with a last-minute sale to J.P. Morgan Chase in March 2008. As the dust settled after Bear Stearns’ sudden collapse, rumors began that Lehman would be the next to fall.
To counteract its inevitable doom, Lehman raised $6 billion in capital by August 2008, despite reporting its first loss in the second fiscal quarter of that year since going public in 1994. Then in September, the firm announced that it expected $5.6 billion in write-downs (reductions in the estimated or nominal value of an asset) for its “toxic” assets and a $3.93 billion loss for the third quarter.
The Largest Bankruptcy in U.S. History: In response, Moody’s, the major debt ratings agency, downgraded Lehman Brothers and a meeting of government officials was held in New York City to determine the failing investment bank’s fate. Representatives of the Bush administration were adamant that the federal government would not bail out another investment bank. Additionally, hopes of a sale to another bank fell short as Bank of America purchased the faltering Merrill Lynch and the British government blocked Barclays from purchasing Lehman.
Out of options, Lehman declared the largest bankruptcy filing in American history on the morning of September 15th 2008 with $613 billion in debts. Lehman’s collapse sent financial markets into turmoil for weeks, and the Dow Jones Industrial Average, a common, general stock metric, fell more than 500 points the day of the filing. After the filing was complete, Lehman Brothers was seen as the unfortunate victim of the larger-scale credit crisis. Likewise, Lehman’s North American investments and capital markets business was bought by Barclays, saving more than 10,000 jobs. James Peck, the judge who approved the acquisition, said “Lehman became … in effect the only true icon to fall in a tsunami that has befallen the credit markets. I have to approve this transaction because it is the only available transaction.
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The Aftermath of the Great Recession
The Aftermath – Distrust of Financial Firms: Distrust of financial firms skyrocket after Lehman’s fall. The investing public, who had previously placed so much money (and trust) into “too big to fail” firms now had to reevaluate their standing. Customers who were trusting investment banks with their assets were now finding themselves skeptical of the economy altogether, and skepticism and uncertainty in financial markets is what breeds recession.
The Aftermath – Laws and Politics: The 2008 Financial Crisis and the scope of emergency public assistance to stem the tide of damage provided the perfect storm for new financial reform. In July 2010, the US government enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act, usually simply called the Dodd-Frank Act.
The Dodd-Frank Act market the greatest amendment to financial regulation since the explosion of such laws in the 1930s during the Great Depression. In general, the Act tightened up the financial sector by imposing regulations regarding derivatives, mortgages, many other financial instruments, and of course more regulation on financial institutions.
In politics, leftists generally think the Dodd-Frank Act is too lenient and does not punish wall street enough. Meanwhile those on the right feel that the Act is too restrictive and does not allow for free markets to function properly.
The Aftermath – Economic Recession: Lehman Brothers’ fall sent shockwaves through the financial sector and beyond. Thousands of people lost their jobs in the spiraling chaos as confidence in the stock market reached near record lows. Markets did not even begin to recover until the start of 2009.
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Overview: The United States is no stranger to immigrants and the trials that they face. Immigrants, refugees, and asylum-seekers alike have long made the journey to the United States in search of a better, safer life for their families and for a fresh start with “endless opportunities.” They flee their homes from persecution and do not carry much with them. However, oftentimes these individuals become so transfixed by the fictional grand lure of the “American Dream,” that the immense challenges lying ahead of them go unchecked, or overlooked, sometimes causing a dangerously slippery slope of destruction, or worse — deportation.
The divisive nature of the American political cIimate creates an even greater challenge for contemporary migrants, as immigration and border security have become a central focus of the current administration and sparked a worldwide debate on issues of immigration.
In her debut novel, Behold the Dreamers, Imbolo Mbue offers an unparalleled look at a variety of issues in the immigration system that often burden, and/or threaten, migrants, asylum seekers and refugees, including: 1) proving their case for asylum, and the arbitrary deadline for filing asylum applications, 2) stress on immigrants with student visas, and 3) trying to assimilate and settle in, whilst being prejudicially stereotyped.
Seeking Asylum: Each year, tens of thousands of immigrants flee their home countries and reach the United States border seeking asylum, or protection from persecution, with hopes of being afforded certain benefits/civil liberties/human rights they didn’t have before, and to be reunited with their family members.
Generally, asylum is granted to non-citizens, or foreign nationals, who satisfy the international eligibility requirements for “refugee” status, which the Refugee Act of 1980 recognizes as individuals who are unable (or unwilling) to remain in, or be returned to, his or her home country, based on past persecution or a well-founded fear of being persecuted, “on account of race, religion, nationality, membership in a particular social group, or political opinion.” For example, children, women and men flee from violence, war, hunger, extreme poverty, because of their sexual or gender orientation, or from the consequences of climate change or other natural disasters. Often people will face a combination of these difficult circumstances.
The will and determination of immigrant families are often tested during both the complex navigation process of applying for refugee status (or for an immigrant visa), which can be a lengthy and difficult process, but most especially, when they finally reach their destination only to then realize that the path to prosperity has only truly just begun.
Settling In: What happens when immigrants are able to survive the dangers of their perilous journeys, possible deportation and actually make it to their destination? At face value, it seems like a great triumph — to flee from persecution, make it to America, be granted asylum or a visa, and be reunited with your family. But below the surface are all of the aspects and conditions of American culture that are essential for immigrants to learn and become accustomed with in order to actualize their new potential. Aspects of Western culture that Americans take for granted and hardly think about. Aspects of the “American Dream” that immigrants have only ever heard stories about, and never actually learned much about. First, there are the obvious things we, like obtaining work, citizenship, drivers’ licenses, economic mobility, etc.
Then take the less obvious aspects of society that immigrants struggle and cope with regularly. It is often especially difficult for child and teenage migrants to adjust to a wildly new culture. Think about moving to a nearby town and being the new kid at school — very difficult. Now, think about being the new kid in a new school in a new country. Learning the language will be challenging in itself, and even when you do learn it, you’ll almost certainly have a present and strong accent. You’ll have to learn about the culture, the music, sports, games, customs and everything else that other people your age in this new country like and don’t like to do.
“Immigrant Victims of Domestic Violence: Cultural Challenges and Available Legal Protections” February 2002 VAWnet: The National Online Resource Center on Violence Against Women
Power and Privilege
Power and Privilege: This novel offers a great opportunity to observe how systems of oppression intersect and influence how individuals function in their social environment. Intersectionality is a feminist analysis tool that allows for a deeper understanding of the experiences of individuals whose stories are not the dominant narrative. Race, class, gender, education, and income all effect how individuals are able to operate in their social setting. The hierarchy of identities is different for everyone. The lived experience of a straight, upper-middle class, white male differs vastly from that of a working class, pregnant, immigrant woman. The choices they make in order to succeed are influenced by the culmination of their identities.
Domestic violence is not designated to one type of abuse. Physical assault, emotional and psychological abuse, as well as financial control are all tactics used in order to maintain power and control over an individual, and the relationship. Domestic Violence is founded on there being an imbalance of power between individuals, this can be based on social or cultural factors.
Examples: Isolation, gas-lighting, micro-managing (choosing what you wear, what you eat, where you work, if you work at all), sexual and reproductive coercion, etc.
Immigrant families vs. Privileged Families
Shared gender roles
- Men are in charge of the household due to their financial contribution to the home and family.
- The women are expected to follow their directions with little push back or questioning.
- There is the expectation that the wives/mothers should put their entire family before themselves, and make difficult sacrifices in order to maintain family harmony.
- “Women in particular find their identities in their roles as daughters, wives, and mothers and live with the expectation that they will sacrifice themselves for their families”*
- Women with privilege are subject to the same emotional and physical trauma of DV as immigrant women, but the steps required to leave the relationship or gain independence vary. Privileged women may not be as isolated as immigrant women usually are. Access to family or social services is more readily available for them.
- Their status and value as a person is not questioned because of their class, ethnicity, or race.Their contributions to society are considered more valuable- usually monetary contributions.
- Immigrant women are expected to work harder to prove their competency and ability to contribute to society. Language barriers and access to education/childcare are added layers of oppression they must work through to be accepted in society.
- Privilege ensures power and dominance over minority groups. So they are still always one step ahead of minority women even if they did nothing to get there.
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