From this slideshow, (http://businessjive.com) these are other things that also may have caused this:
1) Naked short selling: selling stocks you don't own or haven't even borrowed.
2) SEC not releasing information concerning hedge funds when they should have under the FOI act, because that may have revealed funds' "proprietary trading strategies", which may have been illegal due to their naked shorting.
3) The failure of large derivatives broker Refco in 2005, where in its failure, a significant amount of stock was scattered through the market that wasn't actually capitalizable due to naked shorting.
Since the failure of Lehman, the domino effect has been caused by a lack of trust in the positions of would-be lenders and borrowers: no one believes or can accurately determine another party's viability for a transaction to occur: a lack of commercial grease.
With the US being a central pillar in the global economy, other countries have failed too partly due to their connection to it.
Solutions: greater transparency, perhaps a business organization that companies can join if they reveal more about their actual balance sheets. Members can opt-in to view one another's positions before doing business: like befriending someone on Facebook or Friendfeed.
Also, perhaps from this pillar of transparency, it may be possible to cancel net debt positions computationally rather than let markets gradually build again. Many people may lose out, but others should be held accountable and people can move on.
the greater transparency solution would be only avalaible to big companies, who would employ armies of consultants and accountants to be declared "transparent", since a small business needs a minimum of $20k to get their balance sheets audited/certified
1) Naked short selling: selling stocks you don't own or haven't even borrowed.
2) SEC not releasing information concerning hedge funds when they should have under the FOI act, because that may have revealed funds' "proprietary trading strategies", which may have been illegal due to their naked shorting.
3) The failure of large derivatives broker Refco in 2005, where in its failure, a significant amount of stock was scattered through the market that wasn't actually capitalizable due to naked shorting.
Since the failure of Lehman, the domino effect has been caused by a lack of trust in the positions of would-be lenders and borrowers: no one believes or can accurately determine another party's viability for a transaction to occur: a lack of commercial grease.
With the US being a central pillar in the global economy, other countries have failed too partly due to their connection to it.
Solutions: greater transparency, perhaps a business organization that companies can join if they reveal more about their actual balance sheets. Members can opt-in to view one another's positions before doing business: like befriending someone on Facebook or Friendfeed.
Also, perhaps from this pillar of transparency, it may be possible to cancel net debt positions computationally rather than let markets gradually build again. Many people may lose out, but others should be held accountable and people can move on.