At the risk of being both wrong and alarmist, one can only hope that the latest financial news is true: that the American financial industry is in free-fall, and that the Government’s proposed bail-out of AIG–did I hear $25 billion out of our pockets?–will cause a popular uprising. It would be only right.
The latest rumor is that Morgan Stanley may be in talks with Wachovia to merge. Considering Wachovia made the approach, take a guess who’s going to be running the show if this actually comes to pass
And guess how many good people are going to be out on their asses.
So if we move beyond the level of what “ought” to be, there is great and justified fear and sadness in the financial industry right now:
People and their employers are losing their pensions and 401(k)s.
Employees of financial shops–not directors and principals–are about to be fired en masse, glutting an already glutted employment market.
Some businesses that cling to the big brokerages like barnacles to a hull will simply roll over dead.
In other words, the Earl of Kent in King Lear was right: “The worst is not when we can say ‘This is the worst.'”
I worked in the financial houses for a lot of years. March 1995 through October 1998, Morgan Stanley. October 1998-May 2000, Deutsche Bank. December 2000-December 2001, Merrill Lynch (the less said the better), January-June 2008, back to a much different Morgan Stanley (through a contractor). I never worked on a trading floor–I was far too high-strung to be as high-strung as some of the traders–but back office IT work could be fun and as stressful as anything you’d want to find. There was hard work and some nice bonuses. There were backbiting scumbags. Every business has them.
Someone likened it to drinking the Kool-Aid in Jonestown, but nobody appears to have ordered this.
I cannot speculate on why this has happened: the collapse of Lehman Brothers and the sell-off of Merrill to Bank of America. All I can absorb is that a lot of good people are going to get killed in this winnowing out, and it won’t be the right people.
It won’t, for example, be one of the Directors at Morgan who talked, during the first wave of layoffs in the wake of the subprime mortgage debacle, about the layoffs as “Corporate cleansing.” Shades of Serbo-Croatia, Rwanda, and Kampuchea. I wonder if this man is going to get his this time around. I pray so. I hope he has to go out and get a job.
It won’t be the guy at Merrill we called Jabba the Hutt. On 9/11, this bastard was more interested in perfect system performance than in the possibility that around (our first speculation) 40,000 people had just died a half mile from us. After all, you’ve gotta keep your investors in Dubuque fat, dumb, happy, and churned even if it means turning your back on the catastrophe unfolding in front of you. I remember that even his boss was appalled.
This will be a boom in applications for jobs in Quik-Chek, CVS, Walgreens, supermarkets, gas stations, and WalMart. WalMart will even be able to require its applicants to have MBAs so they can pay them $8.00 an hour.
News to the well-invested: if the bad news keeps happening for long enough, you too can be out of a job and then money! You can follow me. For at the end of May I had a job at Morgan Stanley when they decided to dissolve their less cost-effective projects, and the employees and contractors got catapulted over the wall like the cow in Monty Python and the Holy Grail
(“Fetchez la vache!”). I spent the summer having a breakdown and working in A&P, though it’s hard to tell which was which. Things have looked up a bit, but they will never again look up at the financial houses because that is rather over right now.
For the financial shops it’s high time someone besides the drones paid. Unfortunately, the drones are the very ones who keep on paying.