What railroad bankruptcies, two world wars, and the Great Depression couldn’t do, the housing crisis did. The tale of collapse of Lehman Brothers, once a hallowed institution on Wall Street, is a cautionary and sobering one. (See also: Case Study: The Collapse Of Lehman Brothers).

Today is the eighth anniversary of the firm’s collapse. In 2007, the firm had reported record profits and revenues. A year-and-a-half later, it was requesting the Federal Reserve for a bailout after the housing market crashed. Just days earlier, the government agency had bailed out another investment, bank Bear Sterns. And insurance giant American International Group Inc. (AIG) was next in line to apply for a bailout.  

Senior Fed officials at that time, a list that included former Fed chief Ben Bernanke and former Treasury secretary Timothy Geithner, said they concluded that Lehman Brothers was insolvent after looking through its accounts. A 2014 account from the New York Times offers a different version of events, however. According to the Times, Lehman was “narrowly solvent” based on analysis by a group of Fed officials. But that analysis did not make it to Geithner or Bernanke before they decided that the firm could not be rescued. 

The bank’s collapse brought home the enormity of the housing crisis. U.S. markets suffered their worst rout since 9/11 and Lehman’s bankruptcy claim set in flow a number of events that led to the worst recession in America since the Great Depression. The S&P 500 was to fall another 40% (see below) before it began recovering. 

The S&P 500 is up 110% since the day Lehman filed for bankruptcy. Sounds easy but it also fell another 40%+ before the bottom was in

— Ben Carlson (@awealthofcs) September 15, 2016

The same index is up 110% since that day in September.

Despite slow growth, corporate earnings that have missed analyst estimates, and stagnant wages, we are in the midst of a bull market. Even as regulation has curtailed the banking industry’s excesses, quantitative easing and low interest rates have kept a check on savings and spurred consumer spending. Still, there are fears of another Lehman-like bankruptcy. For example, a CNBC story discusses the possibility that Deutsche Bank may be another Lehman in the making. It also mentions non-performing loans in Italian banks’ balance sheet, a figure that is equal to $401 billion. For context, the Fed had a plan to take $60 billion worth assets off Lehman’s balance sheet before the bank declared bankruptcy. But, Mark Peden from Kames Global Equity Income states that the "toxic asset exposure" in the world's financial system has been "run down or run off."