Merrill Blows Another $9 Billion on Gambling Losses, Firing 4,000 People Not Responsible

Merrill Lynch's mortgage gambling tab keeps growing. It was an $8 billion write-off in Q3 last year, then $12 billion in Q4, and now another $9 billion in Q1. That's $29 billion all told (so far), or approximately 4 years worth of earnings.

Put differently, four years worth of work by 60,000+ Merrill Lynch folks worldwide has been vaporized in the past nine months by a handful of dice-throwers on a trading desk and some idiot facilitators in senior management.

Thankfully, Merrill is addressing the problem: It's firing 4,000 people who had nothing to do with the losses.

See Also: Time For Bank CEOs Who Blew It To Step Down

Comments

[Bobotheclown]

There was a time when layoffs, like war, were considered the last resort. It's hard to believe, but there used to be a regulated corporate structure in this country. Even at Merrill only a decade or so ago there were large numbers of people who retired after a lifetimes work with a pension. Not so since the 90's and the beginnings of predatory restructuring that began equalizing the domestic workforce against a global underclass.

The power of these new forces can be seen in the effects on Merrill which once employed a management that was considered to be a leader in integrity and responsibility in the financial industry. Not so since Stan O'Neal came to power. Large numbers of people who honored the old Merrill philosophy were removed in the layoffs of 2000-2002 which reduced the workforce by 25,000, about 1/3 of the company at the time.

Corporations are merely tools of utilitarian economic forces with no foresight or morality. To work well they must be used well. To change the way they act there is only one choice: a return to the governmental regulation that created and protected the middle class in the first place.

When the middle class wants to reduce its pain it will vote it away. Until then the middle class will suffer.

[SydneyAustralia]

They will only fire Americans...or not... the Merrill Lynch head office is now in London, U.K. ?

[dadw5boys]

December 1, 2008 Merrill Lynch's Borad gave the C E O 546,304 SHARES OF STOCK FOR FREE!!!!!!!!!!


WHY ARE THE STOCK HOLDERS NOT RAISING HELL OR THE DTOCK BEING DILUTED WITH SUCH A LARGE STOCK OTION????????

[Rocket80]

There is nothing illegal about running your own business into the ground - nor is their anything wrong with firing employees of your OWN company. If you morally disapprove of their business practices don't use their business

[DanBest]

"There is nothing illegal about running your own business into the ground - " except that its a publically traded company with a fiduciary duty to make profits for its shareholders, No one person owns the company so no one person has that right. And yes there is something very wrong with throwing your shipmates overboard when you were the captain that wrecked the ship.

"If you morally disapprove of their business practices don't use their business"

More free market fundamentalist bullshit. This company (and a majority of companies particularly those with and business to business model) don't care if you boycott them. They don't do direct business with you anyway.

The idea that consumers can change a corporate structure is iffy at best. I've been boycotting Walmart for years and I don't think they've noticed.

[maggiemae656]

Where are those "sin taxes" when you need them? The government will tax you excessively for doing something to yourself that is supposedly "wrong", i.e. smoking, drinking...yet they let these people who take other people's money to squander away for personal gain and don't consider that "sinful"? Let's level the playing field. I don't believe in taxes, but I believe it's time to let them roll on these gamblers who are harming everyone but themselves. After all, what's fair is fair...

[Henry]

Four years worth of work by Merril employees has not been "vaporized" as you say.

Normal credit risk losses for a bank are charged to reserves that are established by charges to the income statement. They are an expense of doing business. Now comes the tsunami of charges and you state that the loss than ensues "vaproizes" the product of four years' labor. Hardly. There are millions of subprime homes out there built by value added (labor etc) that would otherwise not have occured. It was the George Boom if you recall. Stupidity and reckless are not criminal. It is hard to imagine, however, that some of the boys didn't pocket the easy money even though they knew (whaddaya think?).
It's like the farmer who fed his cows all they could eat, (I think this is supply-side economics), thinking this would put weight on faster. The cows all bloated after their windpipes constricted and they died. Darn said the farmer.

[WIpatriot]

Get real, Henry, no farmer is that stupid.

[LeftRight]

Do you REALLY expect them to fire the people actually RESPONSIBLE!?!?!?!? You know better than that!

On another note, why is it that whenever a company claims that they need to cut personnel costs, they always cut the wages of low earners, and then give the BIG earners raises?????

[fairandjust]

Yeah I REALLY DO want them to fire the idiots responsible for financial messes. Can we at least put a lot of them in jail????

[LeftRight]

I want them to do it too, I just don't think that they will!