On September 15, 2008, thousands of employees streamed out of a Times Square skyscraper carrying cardboard boxes, witnessing the largest bankruptcy in United States history and the spark that set off the global financial crisis. This episode traces the full 158-year story of Lehman Brothers, an institution that survived the Civil War, the Great Depression, and the 9/11 attacks, only to be destroyed by the financial instruments it helped popularize. We demystify investment banking and the deadly concept of leverage.

Lehman’s roots trace to an 1844 Alabama dry goods store that profited from slave-produced cotton before pivoting into finance and helping build modern American business. After family control ended and a bitter culture war between bankers and traders, the firm aggressively expanded into subprime mortgage lending. By 2008 it operated at a 30-to-1 leverage ratio, meaning a mere 3 percent decline in assets could wipe out its entire capital base, while accounting tricks hid the deteriorating reality.

• How a 30-to-1 leverage ratio made a 3 percent asset drop catastrophic
• Running a global bank from Sheraton hotel rooms after 9/11
• The Repo 105 accounting gimmick used to disguise toxic assets
• Why UK regulators blocked the last-minute Barclays rescue
• The fire sale that saw European units sold for a nominal two dollars