why is lehman even allowed to survive?

9/14/2008 Preeti "preeturheartout" B. says:

What about the thousands of people dependent on the income from their jobs at Lehmans?

9/14/2008 juliana s. says:

i'm with you, scrub-a-dub.  but corporate welfare is the only kind of welfare we're good at!

....really, i just like saying scrub-a-dub.

9/14/2008 juliana s. says:

scrub a dub

9/14/2008 Steven "Team Snarky™" V. says:

i don't pretend to understand macro economics but on an emotional level i couldn't agree more.  why should taxpayer dollars by the BILLIONS go to prop up corporations who made horrible business decisions?  how are they going to justify tax cuts after continue to spend spend spend?

9/14/2008 norm "brave" g. says:

This post violated the Yelp Terms of Service and has been removed.

9/14/2008 Andrew W. says:

It's not about Lehman or its employees, it's about the entire system, which is connected though Auction Rate Securities and other counterparty connections. If they go down in a disruptive fashion, they endanger the health of the markets and the companies that they do business from.

It's obvious that they're going down and the government is not going to back them up, since they've long had access to cheap capital at the discount window and because the government can not afford to nationalize the entire investmant banking business. They already hold 60% of mortgages.  

Ultimately, it appears they'll be broken up and sold off. Pretty sad actually, but Dick Fuld's fault for allowing all of that exposure, then using faulty accounting to resist needed capital raising. If they sold Neuberger Berman last weekend, even at the reduced rate, they would have definitely survived, but instead they held out for a higher price (perhaps reasonably) and got slaughtered.

9/14/2008 pat "TroutPants" b. says:

preeti, those thousands of people have some skill sets.  they can find other jobs, or make small leaner companies that will actually be competitive in todays market place.  sucks for them, but they probably made alot of money in the past few years.

I could use a good MBA to be my secretary next year anyway.

9/14/2008 norm "brave" g. says:

there are a lot -- a lot! -- of "assistants", receptionists, mailrooms, security guys, juniors, administrators, clerks, production people, accountants and such that make only typical workaday salaries, not privy to the much more media-visible and sexy mega$$ positions. they live in queens. they don't have sailboats. they don't have nest eggs. they don't have safety nets. they will fall behind on their bills. they will have no benefits. and they will have a terrible time finding new jobs now.  they are the ones who are really screwed by this and deserve a little sympathy from us and dare i say even help from our socially supportive governmental structures. the top of the pyramid already made their fortunes so they can drown along with their stupid pride. but a big company like that does a lot of collateral damage to ordinary people when it goes under.

so what i'm saying is, give the situation a little thought before you go saying stupid stuff that, if it was followed, would wreck actual lives just because you may have it in for a couple of rich people, or even a class of people.

9/14/2008 norm "brave" g. says:

don't get me wrong, i like a good car crash as much as anyone. but at least i feel some guilt for it.

9/14/2008 Betty "Attica!  Attica!" B. says:

NORM:  True, what you said.  But I don't see the government BAILING OUT HOLLYWOOD during a strike that caused many workers (mostly, below-the-line workers) to lose their homes and also crippled many small businesses (laundries, caterers, etc).

9/14/2008 Preeti "preeturheartout" B. says:

Norm - Amen to that!

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9/14/2008 norm "brave" g. says:

ok, i'd like to spend a little time on this, bear with me please.

lehman's not on strike, so that is not the issue.

i think in general that if you are not one of the people on strike but your place of business temporarily ceases operation because of one, rendering you unable to earn your salary, there are things like unemployment insurance, which is not great but can at least help tide you over?

the govt is not bailing out lehman, but is playing an active role in trying to figure out how to help it survive. i would guess partly because all the rich power elite stick together, but also because if certain institutions fail, it's the equivalent of a nuclear bomb to the economic system and then it all goes to hell and it's 1929 again. so i reluctantly support trying to keep things afloat even if what my bloodlust and resentment really want is CEO heads on spikes parading down broadway. (pardon my analogy)

when major league baseball was paralyzed by a strike, clinton as president stepped in to send a govt mediator to try to help things along. same for auto workers when things get hairy there. govt involvement in the private sector happens, ie, the system is fixed in favor of the house.

you may be confusing lehman with bear stearns and fannie and freddie. with bear stearns, it was the first and anticipated to be the only instance and it happened so suddenly that the govt just jumped in and tried to prevent a falling dominos scenario, which might really have occurred at that point, and which might have led to a total crash. they provided a guarantee to enable another company to buy bear stearns, which thus far i think it has not been drawn on. and it avoided the immediate crisis and has allowed some time to do some analysis, even if it hasn't cured anything.

for the mortgage companies, they were already chartered in some way as tied to the govt. the govt didn't bail them out so much as take them over and throw out the management and maybe restore them to what they were originally supposed to be. of course, you could say that the govt policy in recent years tacitly encouraged them to do all the shady stuff they were doing, taking all that risk, and now that it blew up in their faces, here comes the govt to the rescue. but i don't think there is a taxpayer bill for that. yet.

i hope i got my facts straight here.

as for hollywood, well during the writers strike there was never a sense that the entertainment industry was facing impending collapse, and the strike didn't last long enough for the govt to get involved in trying to solve it. but yes people got hurt collaterally.

betty, i see you refer to attica in your name. i applaud you for that. the purpose of my comments is just to broaden the discussion and get beyond simple good/bad, and maybe stimulate someone into saying something that i might learn from.

uh oh, did i just kill this thread?

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9/14/2008 norm "brave" g. says:

whether or not anyone feels that the financial crisis is real and crucial  or a bunch of malarkey to make the rich richer has nothing to do with hollywood or anyone's feelings of love or demonization of it.

so chill.

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9/14/2008 Vishal D. says:

JT's on the money here, as per usual. Losing Lehman has singificant economic consequences that far exceed just the job losses (which obviously is a tragedy in and of itself).

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9/14/2008 norm "brave" g. says:

i think it's time to revive JT's thread.

9/14/2008 pat "TroutPants" b. says:

i think the amount of "economic consequences"  that will be seen from the crash and burn of make-believe profits is grossly overblown.  Its a great scare tactic to get people to think its a good idea to thrown more money into a bottomless pit.  

besides, (vishal) do you really think there wont be a smaller, quicker, leaner, more competitive firm that would thrive once all the big dogs die?  there is too much opportunity for someone to not seize.  

as for all the middle class jobs that will be lost, they can grab jobs at other facilities.  its not like a security guard can only work at lehman - they have a wide net that can be cast.  (sorry for the harsh tone).

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9/14/2008 Vishal D. says:

http://online.wsj.com/...

If Lehman's assets were allowed to flood the market, we'd be talking about a massive markdown in price for all sorts of financial instruments out there, causing further losses, and increasing the costs of counterparty risk.  If it becomes too costly to do swaps with all the major investment banks, we're talking about a major liquidity problem and it'll be even more difficult to get a mortgage or any kind of credit.

Eventually, as Pat says,  some firm could come to the front and take advantage, but a) is the US really willing to take the consequences over the short term and b) are you willing for that firm to be some foreign presence?

9/14/2008 juliana s. says:

we're fucked.

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9/14/2008 Vishal D. says:

Wonder if BofA will be able to manage this kind of size and not fall into the same traps as Citi.  That's a gargantuan financial entity there...

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9/14/2008 Andrew W. says:

B of A can easily spin of Merril Lynch in a few years once this all resolves and make a killing

9/14/2008 Chris "Film by Uwe Boll" H. says:

60 trillion in CDS is hanging by a thread right now.  On the other hand, the UK recently loosened up their visa requirements for US ex-pats.  With the impending economic fuckery and a probable McCain/Palin presidency, I think i'm going to start looking for flats across the pond.  Anyone have any suggestions for reasonably priced cities?  Liverpool?  Darby?  Leeds?

9/15/2008 jeff "walking.Yelp.com" c. says:

Steven "Snarky" V says:
i don't pretend to understand macro economics but on an emotional level i couldn't agree more

----------------

With a degree at tower records, no one expects you to.

9/15/2008 JP "My Work Blocked The Talk Threads" G. says:

The financial services industry is fucked.

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9/15/2008 Kate "the present king of france" T. says:

Well, at least the media is getting something out of all of this. There were trucks from at least 8 different news channels parked outside Lehman this morning.

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9/15/2008 Kevin "diet mountain dew addict" K. says:

Peter M. says:

why do we have to bail out, when they made billions in their rip off schemes?
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Yet again you prove your current events illiteracy.  Pick up a newspaper before you post next time.

9/15/2008 Joe "shop smart, shop S-mart" O. says:

First of all, while I understand the markets and have worked for an IB in the past, I don't agree with the gov't's bail out of Lehman. It totally sucks that as the company goes, so do thousands of jobs - a lot of which are medial, lower-income jobs that are not that easy to come-by in this economy.  That said, there are also thousands of people who were making BANK at this place for decades (I'm talking year end bonus' of more than $200k) - if you think for once second that these corporate big wigs are "struggling" you are sadly mistaken.  I have friends that worked there and they are fine.  Wall St is a pretty small community - if you were good at what you did at Lehman, you're gonna find work in no time.  I know my friends aren't worried...now, bailing out Fannie and Freddie - I don't agree with either....and their CEO's get severances worth millions?!?  That shits messed up.

9/15/2008 Kevin "diet mountain dew addict" K. says:

Joe "First you wanna kill me, now you wanna kiss me." O. says:

while I understand the markets and have worked for an IB in the past, I don't agree with the gov't's bail out of Lehman.
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The gov did NOT bail out LEH.

9/15/2008 jeff "walking.Yelp.com" c. says:

if you were good at what you did at Lehman, you're gonna find work in no time.

----

agreed..company/profession is irrelevant in that regard

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9/15/2008 Kevin "diet mountain dew addict" K. says:

Peter M. says:

why do we have to bail out, when they made billions in their rip off schemes?
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LEH went bankrupt.....not a bailout.  A newspaper costs less than $1.  Have a nice day.

9/15/2008 Chris "Film by Uwe Boll" H. says:

I walked by LEH last night, it was a spectacle.  

The classic moment for me, is when I overheard two tourists surmising as to which celebrity was getting all the attention.  Their guess was Hannah Montana or Puff Daddy.

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9/15/2008 Mike "'~The-Boss~'" V. says:

Years ago when I went to renew my mortgage and saw how easy it was to get credit, well, I sort of saw something like this coming down the pipe and called my broker who said to get out of the banks sooner than later. Never had LEH, but I did have some others. Now I see that LEH shares are really not even worth the paper the shares are printed on..sad for the many investors and employees and sad for the waves this will send throughout the economy.

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9/15/2008 Joe "shop smart, shop S-mart" O. says:

JT - regardless of the thousands they don't make this year, they've made a shitload of money in the past.  sucks for them that they won't be able to renew their $25,000/yr country club membership and might have to sell their yacht.  rough life, I tell ya.

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9/15/2008 Kate "the present king of france" T. says:

J T. says:
The facts are if they made a significant bonus at Lehman then a large portion of it was deferred for up to 5yrs. So if they had 5 yrs worth of comp deferred then they are out a significant amount of money due to the bankruptcy filing. You don't know how leveraged their lifestyle is especially if it was based on deferred comp. Also if u think $200k is alot of money(which it is for a majority of people) you would also be surprised at how quickly you can spend it once you pay taxes and cover your expenses living in Manhattan.

--

Everything you said is true, but as someone who's never made anything near $100k/yr in pre-tax salary, these guys who are leveraged in their million dollar homes can suck parts of the human anatomy that i don't have. With income like that, they should have been able to manage _some_liquid savings.

I got laid off after less than a year at my Manhattan job, after a year of unemployment, and i kept myself afloat just fine for a few months until i found a new job. Yes, it meant breaking my lease and giving up my Manhattan studio in trade for a (much larger) apartment in the Bronx, but yeah, life sucks that way sometimes. If they can't sell assets (yes, perhaps at a loss, but it's still cash) to make ends meet, i just can't muster much sympathy.

And if they don't get their deferred compensation, they _lost_ nothing. They just didn't get something they were told they'd get.

9/15/2008 R "Meat baby" P. says:

does anyone find it funny that J.T. is trying to defend these people?  I expected J.T. to be outside of Lehman's office offering to bend over any of the ladies that want to really feel what it's like to get f*cked!

9/15/2008 Kate "the present king of france" T. says:

Why can't he do both? Do you think The JT is incapable of multitasking?

9/15/2008 R "Meat baby" P. says:

Despite all of J.T.'s alpha male talk, I think he has a soft spot for his fellow finance workers.

9/15/2008 Kevin "diet mountain dew addict" K. says:

Rocky "Lenny Bruce" P. says:

does anyone find it funny that J.T. is trying to defend these people?
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J.T. is right, it's just that not many people appropriately understand the great complexities of these issues.  It's far easier for the masses to just snicker and slap "evil corporations" and "Corporate greed" bumber stickers on this matter.

9/15/2008 R "Meat baby" P. says:

See, I expected Kevin to stick for his fellow finance guys. All my friends in finance feel bad whenever there are layoffs and "the arrogant assholes" that they were complaining about a month ago become "good guys" who don't deserve to lose their livelihoods.

But that's besides the point. My point was about J.T.'s alpha male stance and his newfound sympathy for others.

9/15/2008 Joe "shop smart, shop S-mart" O. says:

JT - while I understand the points you're making, I rode the LIRR with a lot of these corporate big wigs and know a few of them personally.  What I am saying is that I don't feel bad for them.  They rode the IPO craze in the 90's, made a shitload of money and were out spending.  Even in the last few years, I see signs of extreme wealth all over the North Shore. So boo-fucking-hoo if they don't get their promised bonuses, or don't get to buy the wifey a brand new X5.  Sucks but everyone deals with it  and these guys have more money than they know what to do with.  It's the same guys eating at Nobu 4 times a week....now they have to cut that to once a month.  

Kate - did the fed bail you out in your time of need?

9/15/2008 Jen "Sporky" D. says:

I don't know why people are so bitter towards bankers... I used to work for Lehman and it was a great place to work.

So what if the bankers were making millions? You think their job is easy?  Are some of you jealous? If you took the time out to put yourself through a half-way decent school and strived enough, maybe you could have made millions just like them. All of you are being so sarcastic when over 20,000 people just lost their jobs and it isn't just the bankers. Yeah, so what if they miss out on thousands a month? They probably aren't getting any severance and let's not even get started on stocks. What about the non-bankers? Like the admistrative support. There were thousands. You think it's easy to just go back out and get a job?

So why don't all you haters shut the fuck up and be happy that you have a job, even if you're not making millions.

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9/15/2008 Kate "the present king of france" T. says:

Joe: If you count three months of NY state's unemployment insurance as a bail-out, then yes. But if you can live in Manhattan on the payout from that, you're a better miser than i.

9/15/2008 Kate "the present king of france" T. says:

Jen "The Gijibeh" D. says:
So what if the bankers were making millions? You think their job is easy?  Are some of you jealous? If you took the time out to put yourself through a half-way decent school and strived enough, maybe you could have made millions just like them. All of you are being so sarcastic when over 20,000 people just lost their jobs and it isn't just the bankers. Yeah, so what if they miss out on thousands a month? They probably aren't getting any severance and let's not even get started on stocks. What about the non-bankers? Like the admistrative support. There were thousands. You think it's easy to just go back out and get a job?

--

I don't think their job was easy. I don't envy them the workload or the income. I think it sucks that all of these people are losing their jobs. But there's no way in hell i'm going to sympathize with the financial woes of people who were making hundreds of thousands of dollars per year, _especially_ if they worked in finance. They have no excuse to not have something to fall back on, at least for a little while. If they didn't have 3 months of solvency in a hole somewhere, then they weren't really thinking.

As for the admins and such, they have my sympathy. Their income was (relatively) low, and even the most confused of critics couldn't claim they had anything to do with the company going bust.

9/15/2008 Jen "Sporky" D. says:

I was an admin and of course we had nothing to do with the company going bust. Actually, most of the bankers didn't have anything to do with it either. It was bad mortgage sub-prime bets and blah blah blah. But just like those bankers might have solvency, they also have families to support just like others and it isn't easy to bounce back from something like this. At a time like this, it just isn't.

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9/15/2008 Jen "Sporky" D. says:

wow... i couldn't have said it any better.

So yeah... What JT said...

9/15/2008 peter d. says:

Yes. What JT said.

Scroll down to the video for "The Perils Of Reporting Live From Lehman Brothers". Hilarious.

http://www.dealbreaker.../

9/15/2008 Joe "shop smart, shop S-mart" O. says:

Hang on a second here - I just want to say that I do feel bad for the people that lost their jobs - even the one's making seven figures.  What I have a problem with is our gov't sticking thier noses in and trying to "rescue" them.  That's what I'm saying.  Did the gov't jump in and bail Kate out?  No.  Do the millions that get fired or laid-off each year get special treatment from the gov't?  No.  And don't even start with "Well they can collect unemployment" because if you say that about them, than you can say that about the dude that just bought his 4th home in Southampton.  Sorry if you lost your job but I don't think my taxes should be spent bailing you out.

9/15/2008 pat "TroutPants" b. says:

jen says "So why don't all you haters shut the fuck up and be happy that you have a job, even if you're not making millions."

well, I am happy with my job.  Its ironic that the groups that caused the bubble in the first place are crying poverty and expect sympathy by bellowing JT's sentiments "there will be a trickle down effect, oh the horror, yadda yadda yadda"... sorry, dont make up things like derivatives to jam people for cash and then turn around when it blows up and expect me to feel bad for the organization - or expect a handout.

JT  - "Stop focusing on a handful of people that make 7 figures and look at the the fact that thousands of people in a revenue generating business that helps to anchor the economy are gone."

please tell me how making up things that no one can understand (derivatives, "financial services" / mutual funds that cant beat index funds, etc.)  anchors an economy. financials are a small portion of the economy.  pharmaceuticals, oil refinement, entertainment, and software are 4 things off the top of my mind that we are good at that produce a large amount of income.

9/15/2008 peter d. says:

Maybe you should be posting in a Bear Stearns thread Joe, because the 26k employees at Lehman are losing their jobs because the gov't DIDN'T bail them out. And the vast majority of them do not make 7 figures.

9/15/2008 pat "TroutPants" b. says:

again, after I re read JT's post a few posts ago, there may be a short term scale down, but its NYC.  real estate hasnt been hit hard.  corporations still want to go here, even if they are international firms.  they'll still hire people that will move into the area and infuse money locally.  

big deal, the ex wall street coons arent employing delivery guys, frozen yogurt stands, etc.  there's a new batch coming down the pike.

9/15/2008 R "Meat baby" P. says:

pat, I think J.T. was referring to the New York economy. There's no question that finance is the financial engine. I don't remember the stats off hand, but their wages and bonuses provide something like 20% of all tax receipts.

9/15/2008 pat "TroutPants" b. says:

7% of the income for manhattan- which is only the 3rd most populated boro behind brooklyn and queens.  Time to make wall street a biotech park.

9/15/2008 Joe "shop smart, shop S-mart" O. says:

Pete - my point was that it shouldn't even have been a question.  The Freddie/Fannie bailout is almost as absurd.

9/15/2008 R "Meat baby" P. says:

pat, for 2007 the wages for finance jobs = 20% of total wages even though the jobs only comprised 5%.

http://www.nytimes.com...

9/15/2008 Kate "the present king of france" T. says:

Jen "The Gijibeh" D. says:
I was an admin and of course we had nothing to do with the company going bust. Actually, most of the bankers didn't have anything to do with it either. It was bad mortgage sub-prime bets and blah blah blah. But just like those bankers might have solvency, they also have families to support just like others and it isn't easy to bounce back from something like this. At a time like this, it just isn't.

--

No, it's not easy to bounce back, especially when the economy as a whole seems to be in the crapper. But i say again, anyone who has (/had) a solid job and doesn't have ~3 months of money, enough to pay their mortgage and credit card and food bills and gas and electric and such, on hold for this or whatever, didn't plan ahead. People pulling in under $50k have a much better excuse for this than people making $250k+. If they chose to build up debt without building up a reserve (i'm not talking about being able to pay down all the debt, i'm talking about enough to pay the interest for a little while) at the same time, well, it wasn't the best idea. My heart does not break for them.

9/15/2008 norm "brave" g. says:

i must interrupt for a second:

what a wonderful thread. except for one apparent dumbo with tourette's who can't help himself from ending his discourse with a two-bit variation of  something resembling  "...you great big stupid idiot" (a la andy kaufman), you guys sound almost rational. feels like a college study group in one of those sepia toned 'remember when' movies about elite schools in england. anyway, this is better than reading a newspaper today.

and isn't anyone going to say BIG HI TO JEN FROM THE FAR COAST, NICE OF YOU TO DROP IN TODAY!!!!!

thanks for your patience and please go back to what you were doing.

9/15/2008 Kevin "diet mountain dew addict" K. says:

Joe "First you wanna kill me, now you wanna kiss me." O. says:

JT - while I understand the points you're making, I rode the LIRR with a lot of these corporate big wigs and know a few of them personally.  What I am saying is that I don't feel bad for them.  They rode the IPO craze in the 90's, made a shitload of money and were out spending.  Even in the last few years, I see signs of extreme wealth all over the North Shore. So boo-fucking-hoo if they don't get their promised bonuses, or don't get to buy the wifey a brand new X5.  Sucks but everyone deals with it  and these guys have more money than they know what to do with.  It's the same guys eating at Nobu 4 times a week....now they have to cut that to once a month.
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Your stereotype of everyone on Wall Street, while common, is inaccurate.  There are plenty of people only making salaries of $55,000 or $65,000 etc...

9/15/2008 Kevin "diet mountain dew addict" K. says:

Jen "The Gijibeh" D. says:

So why don't all you haters shut the fuck up and be happy that you have a job, even if you're not making millions.
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It's called jealousy.  They dont have high-paying jobs and cant live that nice lifestyle, so they gloat and are filled with glee at the demise of others.  Sad and pathetic.

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9/15/2008 Srini "®" V. says:

J T. says:

Providing access to capital is an anchor of our economy. Come on dude, lets get serious here.

---

Yes, access to capital is important.  The so-called sources and uses of money.  Aided by buy side and sell side firms.  That is how the best drugs are brought to market, large car makers are financed, and so on.  All that is great.  But fact remains, investment banking and corporate finance fees are disproportionately high.  And greed pervades all of capital markets activities.  Anyone who is playing this high stakes game should be prepared to deal with the downside risk.  And doesn't expect our sympathy.

9/15/2008 Kevin "diet mountain dew addict" K. says:

Srini V. says:

But fact remains, investment banking and corporate finance fees are disproportionately high
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What does this mean..........  How are they disporportionately high?  And with respect to what?

9/15/2008 pat "TroutPants" b. says:

In "getting serious", lets take a little history lesson on the city:

It survived GE moving, along with 600K in jobs.  It survived the early 90's with over 300K jobs lost and unemployment at 11%.  It  survived the dot com bust.  It survived 80K in jobs lost on 9/11.

so I ask again, do you really think people are going to leave NY in droves and make it a ghost town?  History speaks against this myopic view.

9/15/2008 Srini "®" V. says:

Kevin "I'm Kevin K, and I approve this message" K. says:

What does this mean..........  How are they disporportionately high?  And with respect to what?
---

Take professional services, for example--management consulting or Legal.  They employ people with comparable pedigree as the investment banks.  Compare partner compensation and staff bonuses between professional services and banking (3-4x in most cases).  That is just one data point.  When the driver of fees is not the number of hours worked or widgets manufactured, the sky is the limit.  

By the way, I won't argue this point further.

9/15/2008 norm "brave" g. says:

sympathy and survival are two different things.

sometimes punishing bad people ends up hurting good people too. is that an acceptable price to pay for satisfying resentment? it's worth at least considering -- get your revenge, but who else gets hurt.

does anyone think that an economic crash won't result in fewer services? one way that shows up is twenty panhandlers on every subway car. another is fewer EMS vehicles, so a longer wait while you're lying in the street after being hit by a car. less firemen. just a few examples. there are hundreds.

no one is expecting the entire population of nyc to leave for parts unknown. no one is talking about nyc becoming a ghost town. those kinds of arguments are lame and distracting. you should know better.

but we can certainly expect the quality of life in nyc to take a hit, all the nice invisible stuff we've been taking for granted the past ten years will degrade.

i left a meeting an hour ago in a w.houston street tenement and there was a guy asleep in the vestibule and i had to wake him up just so i could open the door enough to get out. his legs were in the way. he was ok about it, but he could just as easily been weird and attacked me. i didn't know until it played out which way it was gonna go. that's no way to live, for him or me. on my corner tonight there were three people sleeping on cardboard on the sidewalk. that was new. i remember in the late 80s/early 90s there was a lot of this. constant hassles on the street. everything smelled. everything was decrepit. streetlights broken and dark, more danger, tons of break-ins in the tenements, window gates, women not walking the streets alone at night - which they've had no problem doing these past few years - and so on.

we've been living in a golden age here lately, and yelp is after all a product of exactly that, a symbol of the new wealth, all the carousing, eating out, disposable incomes, buying stuff. you call them staples, previous generations call them luxuries. historically that's not particularly normal. i don't know, but we might be at the end of all that. a new cycle may be coming.

9/15/2008 Kevin "diet mountain dew addict" K. says:

Srini V. says:

Take professional services, for example--management consulting or Legal.
------------------------------ ------------------------------ ------------------------------ ---------------
The above functions do not take in anywhere near the same amount of money as I-banking activities.   Generally speaking, I'm not a fan of I-bankers on a personal level, but they do bring in the bulk of a banks' revenue, and as such, they're compensated extremely well.

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9/15/2008 Srini "®" V. says:

J.T., let's break bread and have a drink sometime, and I will bring you up to speed on my thinking.  Trust me, I am not as unsophisticated as you paint me to be.  And I don't need any more formal training in economics or business (have enough of both).

9/16/2008 Kate "the present king of france" T. says:

J T. says:
Greed is what caused the average Joe to buy a house with no money down, lease a new car every 2yrs that he can't afford and to use $25k on a credit card.  No one was complaining when times were good but everyone wants a scapegoat now that times are bad. The evil I-Banker.

--

Not true. Some of us think the average joe deserves what he's getting right about now, if he was stupid enough to do what you describe.

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9/16/2008 Joe "shop smart, shop S-mart" O. says:

"Saying that the govt should not get involved in bailing out institutions simply because a handful of people made millions is simply a ridiculous rationale."

again, we disagree.  so you feel the same way about the gov't bailing out GM and the entire US auto industry too? where does it stop?

9/16/2008 Jen "Sporky" D. says:

Just got a message from my friends at Lehman. They were bought and for the time being all get to keep their jobs. YAY!!!!!!!!!!!

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9/17/2008 Laura J. says:

Yeah that's pretty much what happened with Bears Stern right? Some departments were let go.
Someone I know working there describes being on an empty floor set up for 100's of headset wearing power brokers
and now there are ten people sitting in it.

9/24/2008 Steve "10 Lemon" M. says:

What I want to know, is when will the stupid populace who keeps electing the political whores who rent themselves out to entities serving at the discretion of such corrupt, DC entrenched, government allied entities such as Freddie & Fannie and who keep doing their bidding instead of ours stop voting these jerks into office over and over, every election?

Here is a list of the politicians who received the most money from Fannie and Freddie over their federal careers, thus most likely enabling what will be costing we taxpayers whom they work for hundreds of billions in out futures:
http://pfds.opensecret....

Don't let the title of the article fool you - there are enough Republicans on that list too.

9/24/2008 Steve "10 Lemon" M. says:

PS - a lot of the politicians on that list are party leaders and heads of committees who deal in just such matters. There should be investigations into their dealings and why they were not working in the best interests of the American public. At this point I am SO disgusted with these at best incompetent, in all likelihood lazy and in the worst case, traitorous assholes whom after all are supposed to be working for US - not themselves!

9/30/2008 fil C. says:

I work in technology and this boom and bust reminds me of the the tech bubble. Venture caps were handing out $3+++ million dollars to startups and the techies were riding the waves of internet age. Entry workers were making huge amount of money and then things went sour. The market tide leveled and reached a certain equilibrium throughout the world.

The financial market was a time bomb waiting to happen. Global analyst and economists saw this way back because America has been cavorting in credit ease. What's detrimental is that financial woes produce global financial crisis.  Unlike the tech bubble, the global financial system is intricately woven  or should i mention, it started to seam right after World War ll when America puts itself as the world power and countries pour their holdings into America's coffers with a confidence in government intervention in case of emergency.

Simply glossing over discrepancies in salaries is mundane, at most. This framework are approved by shareholders who  put their stake in the company and thus flow into the circle of investment, re-invesment and returns. Furthermore this cycle creates more jobs and innovation in all sectors of the economy.

Democracies, communism, socialism etc.. has its own problems on distribution of resources. There is no equality in income dissemination in any country I've come across to (man's innately greedy). The only consolation to global affairs is the status of America as a middle class pioneer.   You have apt purchasing power comparable to the rest of the world.

The only crisis for America is when consumer finds itself unable to pedal economic progress with its purchases.  The sad crisis is that we have been peddling artificially with credit cards and loans.  Thus it bore an artificial balloon that has NOW popped right before our eyes.  

I believe the government will bail this one sooner or later --- The Economy's Flat.