I remember the talk when Texaco became insolvent in 1987 (my great uncle owns a service station which formerly sold Texaco gas). Texaco's assets at the time of receivership amounted to $35.9 billion, which is bad enough for 5th on the all-time list.
Baseball fans in particular remember when Enron went bust because of the scandal surrounding the naming rights deal the company had signed with the Houston Astros. Enron's pre-bankruptcy assets were valued at $63.4 billion in 2001. That places Enron a distant third.
Remember WorldCom (aka MCI WorldCom), the long-distance carrier and rival of AT&T which tried to merge with Sprint in 1999 until the Department of Justice and the EU got antsy? Three years later WorldCom went down to the tune of $103.9 billion, the largest bankruptcy filing ever at the time. Today, WorldCom is merely second...
...to Lehman Brothers. Prior to this Monday, Lehman's assets amounted to $639 billion, outstripping the previous bankruptcy record by $535.1 billion. This is a massive number that's incredibly hard to contextualize, but thanks to the information provided by Condé Nast Portfolio, I think I've managed to accord it proper scale.
Ford Motor Company's total assets, including global operations in Europe, Australia, and Latin America amount to $178.82 billion as of August. Entities owned by Ford include Ford, Lincoln, Mercury, Mazda, Volvo, Motorcraft (parts and service), Ford of Europe, Ford of Australia, the Ford Motor Credit Company (financing), and manufacturing facilities throughout Latin America and Africa.
General Motors is the maker of Chevrolet, Pontiac, Saturn, Buick, Hummer, Saab, Cadillac, Holden (Australia), Opel (Germany), Vauxhaul (UK), Daewoo (South Korea), Delphi Electronics, and 49% of GMAC Financial. GM's total assets, including operations in Europe, Australia, South Korea, and China, amount to $65.92 billion, also as of August.
Chrysler's assets are a bit harder to ascertain. The company's divisions include Chrysler, Dodge, Jeep, Mopar (Chrysler's parts and service arm), ENVI (hybrid vehicle development), and Chrysler Financial, and previously was part of the now-defunct DiamlerChrysler consortium. Now a private company, with 80.1% owned by Cerebus Capital Management, 19.9% owned by former partner Daimler AG (think Mercedes-Benz, plus a ton of truck companies like Freightliner and Sterling and a bank), I couldn't find any data on the Condé Nast site. An estimation is possible, though. In 2007, Cerebus paid $7.4 billion for the privilage of owning Chrysler, this despite the later's $18 billion in liabilities. If you believe assets minus liabilities equals a sales price, then Chrysler's assets would be in the range of $25 billion.
Lehman Brothers' $639 billion in pre-bankruptcy assets outstrips the combined assets of Ford, GM, and Chrysler ($269.74 billion) by $369.26 billion. So, since we're still not even halfway across the abyss, let's make a few more additions.
Toyota Motor Corporation's operations encompass the Toyota Group (Scion, Toyota, and Lexus), Toyota Financial Services, and 521 other subsidiaries, including a majority stake in Daihatsu, nearly 9% of Fuji Heavy Industries (makers of Subaru as well as ventures in aerospace and eco tech). According to the Fortune Global 500, Toyota is the 6th largest corporation in the world. The total assets for Toyota in August of 2008 amounted to $120.86 billion.
Honda Motor Company is another multinational engineering and manufacturing concern. Honda manufactures cars (Honda and Acrua), trucks, motorcycles, scooters, robots, jets, jet engines, ATVs, watercraft, generators, marine engines, lawn mowers, and aeronautical equipment. As of August the company's total assets amounted to $48.47 billion.
Combine Toyota and Honda with Ford, GM, and Chrysler and the Lehman Brothers Canyon shrinks to only $199.93 billion.
Apple, Incorporated needs no introduction. The company's assets amounted to $28 billion in August. Only $171.93 billion to go!
Likewise, Microsoft Corporation is familiar to everyone. In August the company was valued at $43.24 billion. Lehman Brothers' lead is shrinking - merely $128.69 billion left!
Google, Incorporated adds another $16.32 billion in assets to the pile. Down to a mere $112.37 billion loss!
Dell, Incorporated pulls off another $21.78 billion from Lehman's Ravine, now $90.59 billion.
The Boeing Company eliminates $25.94 billion more. Lehman's Gulch has shrunk to $64.65 billion.
Hey, what it Bill Gates had a really bad day at the track? His $57 billion fortune gone, the Lehman Gap narrows to $7.65 million.
Let's say that Rupert Murdoch's NewsCorp empire goes down, taking with it HarperCollins Publishers, Dow Jones & Company, the Consumer Media Group (including The Wall Street Journal), all of FOX media entities, and hundreds more newspapers, magazines, etc. That's another $6.8 billion gone. Now there's only $850,000,000 left to account for.
California's Governator has an estimated worth of about $800 million, something I found rather surprising (more than Mitt Romney? Really?).
And the last $50 million? That's about what Rudy Giuliani spent to win a single delegate in the Republican primary (the Times' headline is somehow wrong).
Finally!
Ready for the bloodletting? To equal Lehman Brothers' pre-bankruptcy assets, the following companies and individuals would have to lose all value:
- Ford Motor Company
- General Motors
- Chrysler, LLC
- Toyota Motor Company
- Honda Motor Company
- Apple, Inc.
- Microsoft Corporation
- Google, Inc.
- Dell, Inc.
- Boeing
- Bill Gates
- Rupert Murdoch
- Arnold Schwarzenegger
- Rudy '08
That's how big Lehman Brothers was. Was. Now it's not worth a Roosevelt dime. Finita la commedia.
And now we know that Bernanke and Paulson told Congressional leaders that up to $1 trillion will be needed to prevent a second Great Depression.
Ladies and gentlemen, if you're scared shitless about Lehman Brothers' failing, you have every right to be. If you aren't scared, you should be.
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