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This Happened

This Happened — September 15: Lehman Brothers Bankruptcy

Lehman Brothers, a global financial services firm, filed for Chapter 11 bankruptcy on this day in 2008. This event was significant in the 2008 financial crisis and had far-reaching implications for the global economy and financial markets.

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What is Chapter 11 bankruptcy?

Chapter 11 bankruptcy is a legal process in the United States that allows financially distressed businesses to reorganize their debts and operations while continuing their operations. It gives companies the opportunity to develop a plan to repay their creditors over time, potentially helping them recover from financial difficulties and avoid liquidation.

Why did Lehman Brothers file for bankruptcy?

Lehman Brothers faced severe financial challenges due to its exposure to subprime mortgage-backed securities and other complex financial instruments. As the housing market collapsed and mortgage defaults increased, the value of these assets declined sharply. Lehman's inability to secure additional funding and its deteriorating financial condition led to its decision to file for bankruptcy.

What were the consequences of Lehman Brothers' bankruptcy?

Lehman Brothers' bankruptcy had profound consequences on the global financial system. It triggered a crisis of confidence in financial institutions, causing severe disruptions in credit markets and leading to a credit freeze. The bankruptcy contributed to a wider global economic downturn, resulting in job losses, housing market troubles, and government interventions to stabilize financial markets.

How did the Lehman Brothers' bankruptcy impact financial markets?

The bankruptcy of Lehman Brothers had a domino effect on financial markets, causing panic and uncertainty. Stock markets around the world plummeted, and credit markets froze as banks became wary of lending to one another. The event exposed vulnerabilities in the interconnectedness of financial institutions and led to a crisis of confidence that required unprecedented government interventions to stabilize.

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Inside Malaysia's Intel Factory, A Global Hub Of The Microchip Market

As the importance of the global microchip economy continues to grow, companies like Intel may one day reign supreme over today’s corporate giants: Meta, Apple and Google. And, in a measure some are calling “reverse globalization," production is beginning to move back into the Global North, including Poland. In a rare visit to Intel’s factories in Malaysia, Polish daily Gazeta Wyborcza takes a look into what the future of its manufacturing will look like.

image of a woman fixing a computer

An Intel factory in Malaysia

Rafał Pikuła

KULIM & PENANG — Today, microchips are even more important than oil. Although some say that data is the gold of the 21st century, the existence of data, and its processing and analysis, would be impossible without integrated circuits.

And unlike oil, which can be bought from many countries, the production of computing power depends on tools, chemicals and software which are often available from only a few companies — or sometimes only one.

In this way, Intel, Texas Instruments and the Taiwanese TSMC are companies which may have a greater global impact in the future than Apple, Meta or Google.

“At the heart of digital computing, there lie millions of zeroes and ones. The entire digital universe is made up of these two numbers. Every photo, every button on your iPhone, email and YouTube video is encoded with endless strings of 0s and 1s. But these numbers don’t really exist. Rather, they are a representation of whether or not electricity is flowing (1) or not (0). A microchip (or "chip") is a system of millions or billions of transistors, tiny electrical switches that turn on and off to process and store strings of 0s and 1s, and convert real phenomena, such as images, sounds and radio waves, into millions of millions of these two numbers" — this is how economic historian Chris Miller explains the essence of semiconductors in his best-selling book Chip War: The Fight for the World’s Most Critical Technology.

In June, tech giant Intel announced its plans to invest $4.6 billion USD in a semiconductor assembly and test plant located just outside of the city of Wrocław, in Western Poland. The measure was hailed by Polish Prime Minister Mateusz Morawiecki as "the largest greenfield investment in the history of Poland."

To explore the future machines, processes and work philosophy which will reach Poland once Intel opens its plant in 2027, Polish daily Gazeta Wyborcza traveled to semiconductor assembly and testing plants in Kulim and Penang, Malaysia, which will be a model for the plant set to be built in Poland.

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