Sentenced to death four felony counts of Wall Street.

Subprime mortgage crisis intensified, not only all of Wall Street financial institutions is undeniable, the most shocking is that even the top five investment banks down three in one breath, leveraged play too far, but they focus on high risk products to expand business .themselves to blame, is the main cause of decline for the Wall Street investment banks, but they lose the stability of global financial markets. .<P> Subprime mortgage crisis has swept across Wall Street, the investment banking circles is clearly devastating disaster in particular, Bear Stearns six months ago, the first declaration of why he did not, by the acquisition of JP Morgan Chase, on Monday the day with Merrill Lynch and Lehman Brothers collapsed .two, by Bank of America took over Merrill Lynch, Lehman Brothers fell nobody wanted to buy and even the point of bankruptcy. .</ P> <P> now the top five Wall Street investment bank Goldman Sachs and Morgan Stanley, only to survive, and perhaps a smooth escape the two last, but certainly will be scarred. .</ P> <P> why the investment banks in the subprime mortgage crisis has killed the highest rate? .The problem is simply that, in its business strategy and model. .First, the operating leverage ratio is too high is the biggest key, Wall Street is essentially leveraged investment in the playing of the game, but when the lever is too high, when the situation has reversed, which was tantamount to playing with fire. .</ P> <P> high leverage investment banks just how far off the mark? .To Lehman Brothers, the from 2004 to 2007, the investment bank through the purchase of real estate mortgage bonds to nearly balance sheet expansion of billions of dollars, but only with a small capital of the Company during the six billion dollars by its .The result is total assets, share capital surged to more than 24 times from 31 times, and when asset prices fall, the impact on the financial particularly. .</ P> <P> followed by investment banks in recent years, the goal in the competition for profit, large-scale operation of high risk business investment. .Merrill Lynch and Lehman Brothers in recent years, mortgage backed securities to substantially sprint high profit but high-risk derivatives sales and trading business, in addition, proprietary trading desks of investment banks are also operating weight .rapid increase in five major Wall Street investment bank proprietary trading desks before the operation was all over the proportion of Liu Cheng. .</ P> <P> Another problem is different and comprehensive commercial banking, investment banking sources of funds to buy bonds does not depend on stable retail deposits, but some short-term debt instruments. .</ P> <P> overpaid investment banking operations are also overwhelmed because, simply said the company into the most profitable investment banks are the pockets of employees, especially executives, to chief executive of Lehman Brothers .Foer De example, according to statistics in 14 years by selling his stock realized nearly 5 billion U.S. dollars, the amount of Lehman Brothers 4 times the current market value. .</ P> <P> Sun Powder Monkey is now a tree falls, it is estimated that the number of people walking up and go on Wall Street this year will be high, exceeding last year's more than 15 million people from the building collapsed building, in addition to blame themselves, but also to blame? .</ P>.