Today is a bad day in the Market. Well maybe not a bad day, but a painful one. The financial markets can be manipulated for only so long and then the Market will turn and expect its due.
I spoke to my friend and investment counselor and former colleague this morning. She was having a rough day and it was only 10:15 am. My former employer is being bought by Bank of America. Actually I think it is a good move for both parties, for BOA it is a great way to get into some big time playing fields on the cheap cheap. For ML, well it is preferable to going under completely. Which to be frank, was a real possibility in my opinion.
Lehman filed bankruptcy. The guys and gals who ran it into the ground, well they are sipping Mai Thai's and loving their windfall via their golden parachutes. The everyday back office Lehman employee, they are watching their retirement disappear down the toilet. Like in monopoly - "Down the Toilet, straight down the Toilet, Do not pass GO, Down the Toilet."
You can talk all you want about a shift in the financial landscape, hard times and the like but the bottom line is - people got greedy. Guys who had limited risk in the game wanted just a little bit more and well the rest of us pay. What many people do not know is that most executives and certainly those on Wall Street, the guy in the big corner office has some insurance in his or her back pocket. It is a golden parachute and he is covered. Why not gamble just a bit more, if you have no risk of lose. When things get bad, you dump and run and or get your buddy to ASK you to step down and you walk away with HUGE severance package.
The average employee at Lehman will be lucky to walk away with their 401K plan account and maybe some COBRA to cover their medical insurance (all paid out of their own pocket.) For those long term employees, the seasoned floor traders, back office processors and the clerical staff, who were close to retirement - kiss it good bye folks. Bankruptcy means that if Lehman pulls it out and can exit bankruptcy, it does so without the obligation to pay medical and pension benefits to existing retirees and the pension - dumped - a thing of the past - all those hopes wiped out in one little legal filing.
I have been feeling sorta bad about walking away from my license and a career that was rather lucrative for me. It could have been more so, if I had been willing to step it up and take it to the next level. Today brought it all back into perspective for me. Sure I made a good living and well it was fun sometimes closing the big deal - but at the end of the day - it is a dirty industries, with a dark underbelly and lots of pit falls. The time required of me to be away from my kids is too much of a cost for the potential reward. While my loyalty had a price - Wall Street is far from a good gamble. Clearly as is the case with Lehman - my loyalty and the loyalty of others is a one way street - when the times are tough - the FIRM will dump and run. And for what - a gamble? Bad Business? Greedy Big Shots?
I think Merrill is doing the right thing. The deal with BOA means that ML will remain solvent and those long term employees will be protected. My advice to the person considering that early retirement offer - jump on it baby. Take what you can while the getting is good! You can always find a part time job or something to fill in the gaps - cuz Wall Street owes you nothing and your loyalty - Yeah that and $3.50 will get you some Starbucks.