Monday, September 15, 2008

The Wall Street Blues

What is our luck that we moved to New York City at the worst economic time in recent history. It can't ever be easy, can it? Global stock markets continued to take a nose dive today with the collapse of U.S. investment bank Lehman Brothers. Its estimated that about 25,000 of the firm's remaining employees are being let go. News crews photographed (former) Lehman employees leaving the once prominent New York City headquarters office, carrying out their cardboard boxes as people watched.

This with news that Merrill Lynch & Co. sold itself to Bank of America and that AIG suffered billions of dollars in losses due to deterioration in the mortgage and credit markets. Both presidential candidates were talking about the current economic state. Barack Obama said eight years of Bush "brought us the most serious financial crisis since the Great Depression."

Obviously Wall Street bankers can say bye-bye to those former fat Christmas bonuses they've become accustomed to. Some of these bankers even start purchasing an excess of goods on plastic in anticipation of these bonuses. Unlike in other industries, where a yearly bonus is a tiny pat on the back, on Wall Street it's an important part of a worker’s salary package; often their bonuses can even exceed their annual salary. Wall Street bonuses are also seen as an important source of revenue for NYC when the bankers stop trading and start spending. Some of these bonuses are beyond imaginable for the average working-class Americans like us. For example, a few years ago Goldman Sachs CEO received the largest Wall Street bonus of $53.4 million. Yes, that's millions. Read this interesting 2006 article on these astronomically insane bonuses.

Just two months ago when we looked at the jobs and salaries postings on Craigslist, it was much greater than it is now. What a difference just a few months makes. So the economic atmosphere here (as the rest of the country) is bleak right now but we're going to try to remain positive and make the best of our experience here. Plain and simple, we have to. This financial meltdown is tough, but so are thick-skinned New Yorkers. We'll learn to be resilient like them. But the ones to feel sympathetic towards during these times aren't the bankers that won't get to travel to Europe this year or dine at five-star restaurants every night, it's the mom and pop stores that are suffering - like my aunts who just this week had to make the hard decision to close their small shop due to the decline in tourists and tourist spending. We wish the best for everyone.