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Lehman's Collapse Rattles the Really Rich
The phone has rung off the hook all weekend. "Are you OK?" I've asked friends whose husbands have been at Lehman Brothers. No, of course they are not. They just saw everything they've worked for go down the drain. A lunch barbecue with a Lehman executive who has been there 16 years was canceled. No explanation needed.
The Saturday papers predicted the end of other institutions, too: Merrill Lynch, AIG. On Sunday morning one of my savviest investor friends told me not to worry about Merrill Lynch. He said it had too many good parts to implode. He had seen John Thain, the chief, very recently and had a long talk. Thain had said his bank was too valuable to go under.
By Sunday night my friend was on the phone again. Now, the news was that the Bank of America was ready to buy Merrill at $29 a share. Given that Merrill's share price had fallen to $17 on Friday, this news, said my friend, proved that he and Thain had been right.
Sort of. We live in terrifying times. Even the election is not as much of a distraction as it should be from the economic pandemonium we are experiencing. At lunch and at dinner we all debate whether the panic is manufactured or whether a collective mental panic has always played an integral role in recessions, regardless of what the reality is.
Ordinarily people might be wondering about other things right now. For instance, there is artist Damien Hirst's brash step of cutting out the middle man in selling his works; there is the huge exhibition of contemporary art in Russia on Wednesday. Soon Daniel Radcliffe comes to Broadway in Equus. We're ending fashion week. But women talked not about clothes but about children, schools and how stressed their husbands were.
Until this week I've never heard really rich people -- as in billionaires -- sound scared. But now they do. Sure, they say, it's no time to be panicking. Stay calm and there are fortunes to be made. There are lots of assets going cheap and some people are going to get rich.
But for most of us it is time to hunker down. Time to hope we don't get that phone call: "Are you OK?" The answer, for all of us in New York, is no, we are not.
This article was originally published by the London Evening Standard
Follow Vicky Ward on Twitter: www.twitter.com/VickyPJWard
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How can anyone feel sorry for these companies, their shareholders or anyone else that is attached to them. They are going under because of their GREED. Yes they will take several others that are a lot less innocent than them, but GREED breeds corruption & they are getting what they deserve.
And my story, not so much unlike many others:
I have been unemployed since Feb. 15, 2008. I have interviewd for several different companies but have yet to receive that all important call that I have been hired. While the Government bails out big companies my question is will the government help me? Will the government bail me out? I need help and I need it now! I am an American borne citizen. I have paid my taxes. Where is my help when I need it? Am I & my wife going to loose our home? Am I & my wife going to have to live on the streets? Is this the great life that awaits us? I am not a liar or a thief, but I may have to become a thief for us to survive. Am I scared of what the future holds for me & my wife? You bet I am. Just wait, your turn is coming! Who will care when you need help? Who will you turn too?
James P. Gray
Service Number 775-49-44
US Navy Reserve-Active Duty 1965-1967
P.O. Box 10484
Conway, AR 72034
501 450-7663
Amen, brother...
I'm with you James. I'm 62 have worked my entire life. Have never complained about the taxes I pay because I believed they were there to help others in need. I've been unemployed twice in the past 5 years. Once when my own business failed after 911 and I was astounded at the lack of help I could get, even unemployment. We used our retirement savings, lost our home and after 1 1/2 years I found a job that was right sized out of existance in April 2008. At least this time I get unemployment, but have to pay $696 per month in Cobra Benefits to have single health coverage.
I'm angry at these greedy thieves running corporations and the Bush/McCain/Republican policies that support them but not you or I or the others of hundreds of thousand hard working families that make up the back bone of this country.
Well well well...I'm sitting here trying to figure out how I'm going to make $20 feed my kids for two weeks with no milk, bread, or eggs in the house and the power bill overdue. I would have had more money but I had to buy stamps to mail out resumes, having lost my job months ago. And I stumble upon this article saying that now even the billionaires are worried. How heartbreaking, I feel so bad for them...
In fact this is the time to strike and make some money. There are plenty of cheap buys out there right now. unfortunately the only people who can take advantage of this are those that have been waiting in the sidelines for this to happen. Anyone who was employed by any of those rinky-dinky firms didn't know too much about what they were doing anyway. Too impressed with marble columns and brass doorways. It was all a scam as they are finding out. The real shakers and makers don't have doorways you can walk through or marble columns to impress. What they do have is excellent timing and a willingness to sit in the darkness until it is time to strike. They don't get much sun but they do get rich. So tell your friends to get off their duffs, and pool their resources, quit complaining and strike out for new uncharted territory. Opportunity is abundant. Being poor is not an option.
If suffering breeds compassion, then let the rich come back down to earth,
Log onto - realtytrac.com - put in a really rich town, click on "site map", and you can see how
many home foreclosures the rich folks are experiencing along with the rest of us.
I gotta tell ya - it warms my heart to see the rich eating the same Bush/Cheney crap that the rest
of us have had to eat for so long now.
If they are losing their home they were only pretending to be rich.
It is going to be alot of millionaires and billionaires that want to get cold hard cash in their hands pretty soon.If they are nervous,then we should be very nervous!!
As soon as I saw the article's title - I was eager to read it. I want to see the rich suffer as
much as is humanly possible. The rest of the country has been drowing in pain and sorrow
for the last eight years, and rich folks just say - - - SO ? ?
When billionaires Warren Buffet and Bill Gates pay LESS TAXES than their freaking secretary,
then this is a sick country run by a bunch of really sick people - Bush/Cheney. And I want to see
all the rich forced to eat from the garbage dump like the rest of America.
I sincerely hope the rich are in a world of hurt - so I can happily say - - - SO ? ?
i feel badly about the shadenfreude i'm experiencing but i do feel it. i was raised by a blue collar family that struggled hard for everything just to see good jobs go overseas and the rich fighting tooth and nail to keep the minimum wage stagnant for years, not even keeping up with inflation. then, when you are talked into refinancing by big shots who seem to know everything and wind up losing your home, you suffer without complaint and blame yourself for your failures, as the rich have been blaming you all along. stupid, stupid, they tell you. meanwhile, you keep pushing on, paycheck to paycheck, terrified of falling ill, afraid to make one mistake, with no safety net.
so who will stand up for them, who will care what happens to them, if they now lose everything? i have to say, not me.
No, the panic is real. The preceding calm was manufactured. Recessions happen when the rate of change in inflation-adjusted income is less than the rate of change in productive output, but the market doesn't respond immediately. Instead, they lie to themselves and everybody else until it becomes clear that the lies aren't working anymore, at which point the panic that was always there is allowed to emerge.
This whole financial crisis is a manifestation of the lies used to cover up the fact that, for some time now, the American economy has been producing more value while the American worker/consumer has been earning less income. The time to panic should have been when people started realizing they couldn't make ends meet, not after they've defaulted on the loans they subsequently took out in order to stay afloat.
But of course, Wall St. doesn't care if we can't pay our bills until our problems create a situation where Wall St. can't pay its bills. None of this had to happen. If wages kept pace with GDP (they don't even keep pace with inflation), and if lenders didn't bombard us with marketing about how home equity loans and platinum cards can make our dreams come true, then Vicky and her husband could have had a lovely barbecue this past weekend.
Anyone with a brain saw this coming. When you don't pay the people then how can they spend?
Eat the rich!
My tiny violin is playing for them.
Leftlibertarian. Funny, why, I can hear your tiny violin playing for the multi-billionaires.
If I lose my job I'm out in the street in about two months. Do you understand what "out in the street" means? Somebody asked Ralph Nader one time if he ever worried about the rich people. "Of course not" he said (paraphrasing) "the rich are doing fine".
Kinda wondered about this when you see vacant empty foreclosed and repo houses in Bel Air Ca, and reports of same in Greenwich Ct. and that town in 'The Hamptons' having bankruptcy problems.
What? No Wall Street ticker tape parade? Seems like the rest of the country burned, Wall Street was buying new luxury items. Now, since their taxes have continued to be cut, they are coming to the public trough for relief. Meanwhile, we are losing our homes and our jobs.
Why on earth would I care if these people are OK? Let them eat their Rolex watches.
next time dont be complaining why people arent getting car loans, home loans, student loans even with 700+ credit score.
the credit market is dead. its all straight cash homey..
What everyone seems to be forgetting, what with all the hand-wringing over canceled barbecues, is that no one "went gunning" for Lehman. Lehman committed suicide through arrogant and aggressive ignorance. That's an unforgivable sin, in so-called "free markets", and I don't understand why anyone should feel sorry for them. Lots of less arrogant, less aggressively stupid firms saw all this coming from miles away, and they're doing OK. So let's reward competence, and not waste tears over mediocre so-called bankers.
Again, we compensated the incompetent with huge bonuses and look where it got us. Just like the trickle down worked so well for the middle class, right?
I wish I could find how to get rich myself! Who knows the insrcutable Divine designs! They had their good times. Now is the time for people like you and me! The CEO's were drinking whiskey and filling their pockets with millions. They drove expensive Bentleys and Mercedeses. They assured the Congress that "all was well. " They drank together, as a matter of fact. They robbed the last pennies from the poor, the orphans, and the widows. They left people like you and me without bank accounts and without home. My car is standing idle for a year for lack of gasoline! I am hoping that we the poor can get rich from this Lehman experience. Let's put all our trust in God!
Why put our trust in God? Isn't that what got us here, a little too much faith?
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