Name withheld is totally shocked that Lehman and Merrill are gone!! WTF is going on? This was my world for the last 11 years? Where am I going to work after B-School??This is from an FB. Sums up what alot of people are thinking now.
I have been hearing a lot of chatter at a certain bank that is famous for hunting a large Ursa and it is either good or bad. Depending on who you are.
I am unsure if I have told you all this story but even if I did it is still a good story.
This incident occurred between the Bear Stearns acquisition and the Lehman Brother implosion.
This banker was at his desk when a new customer came to open a new account. At first the banker thought this guy was going to open a small account. The banker realized his initial impression was mistaken because the customer sat down, took out his lunch and placed it on his desk. The customer that both of them were going to be here awhile. For almost 3 hours, the customer began transfer money from his account at Wachovia over the phone to his new bank
Apparently the Wachovia telephone banker repeatedly ask the same question which was “Do you realize your closing your account?” which the customer repeatedly responded “Yes.”
Perhaps the reason for the Wachovia telephone banker’s concern was due to the fact that the customer was transferring about 4 million dollars to his new account.
The next conversation occurred today while I was trying to get service on the phone at this particular bank. It was quite frustrating because I was constantly put on hold. When I finally got a branch service representative, I was peppered with apologies. All day this branch was being bum rushed by Washington Mutual customers who were opening up new accounts and transferring their funds.
I would like to address the following comment that was left by a former reader
I have long been a fan of your blog but this bitter tirade about some guy playing his stereo too loud deserving to lose his job is utterly ridiculous. Your posts have gotten weak as of late with many having little to do with your "trench reporting" on real estate. I'm not a banker nor am I particularly fond of bankers but this post is just plain stupid.
For someone who claims to be a longtime fan you would know what I wrote was not a tirade. If it was a tirade the screen would be dripping with blood. I was showing a tremendous amount of civility with this person in my interactions with him and in that entry. And it was more than he deserved. It wasn’t just about loud music but his absolute lack of respect and disdain of me that was completely unwarranted. I make an effort to leave others alone and respect their privacy. And even when they violate mine, I make an effort to use the proper channels to address the issue in order it to be resolved in a diplomatic manner.
I asked him to lower the music down in a polite manner and he interpreted it as an insult to his manhood. It is simple as that.
I take no satisfaction from his occupational demise, for all I know of him he has a mortgage and family to support, which is going to make it quite difficult without job and trying to find a job in this economy. In fact if the following is true
he might be starting from scratch.
“Over the past decade an increasing amount of the compensation had been given in stock and stock options,” said Robert Willens, a tax expert who worked at Lehman from 1987 to this year. “Employees were paid in restricted stock that took several years to vest. Stock was granted at the current price.”
If he has kids, he has to figure out another way to fund their college education. God forbid he has no health insurance because if he or someone get seriously ill, they are heading straight to the free clinic.
All I presented is my observation of this former neighbor and his employer. It is completely unscientific, but it is in my opinion that it is not by accident of these two share their current fate.
It said that Lehman Brothers CEO Richard Fuld own hubris
played a key role in his company’s sudden and tragic end. So it does not surprise that my former neighbor exhibited the same attributes that as his former boss did.
On a personal note, I am not perfect. I have made a lot of mistakes in my life and because I am human I will be most likely make more. I only hope that I will have the humility and discipline to recognize those mistakes and make the effort to learn from them.
As for my “trench reporting” becoming weak, you are correct on two points. Real estate is no longer an island. It is connected to other investment vehicles and to society. This “trench” has become quite wide and includes places like China to superfunds sites across the United States. It is not just New York City anymore, it is the world.
As for my writing being weak, you are right. It is weak because this whole situation is weak. The United States economy is no longer in a position of power and we are now at a point where we are fighting for our survival and it does not seem like it will get any better in the future.
As for my words being stupid. You have no idea how right you are. This whole thing is so stupid. There was no reason for this to go this far. All Wall Street had to do was to apply the principles of asset allocation, diversification and make the effort to re balance their portfolios. But no, they didn’t. In fact even after the housing market crashed and even after Bear Stearns became JPMorgan Chase, the band played on and it was business as usual for Lehman Brothers. It is not just them, Merrill Lynch has already been sold to Bank of America and now the cross hairs are on AIG and even Morgan Stanley is looking skittish. All because greed was replaced by common sense we are now dealing with a situation that is stupid on epic proportions.
The irony is that the people that work for these companies are not stupid. They are highly educated and are well experienced in their fields. They worked for companies that are quite prestigious and yet here we are circling the bowl wondering when the next time it flushes.
Sunday night I was having an IM conversation with a family member and that family member made a very sobering argument for Obama not to win this presidential race. Because whoever is elected is going to be a one termer since they will be faced with the very unattractive prospect of not cleaning up but surviving this nightmare.