Lehman Brothers and Merrill Lynch

[Guest Jules]

edit: I understand that this is probably a totally unfair characterization of financial professionals, but seriously, this is how it has long appeared from my perspective, even during the boom times.

No, you're pretty much on point there.

 

Edit: I just realized I have some exposure with Lehman. Depending on what happens, I might only get 60-70% on the dollar. Fantastic.

[Duck-Billed Catechist]

http://www.thislife.org/Radio_Episode.aspx?episode=355

 

I liked the This American Life piece of the subject, The Giant Pool of Money. Click on "full episode."

[austrya]

Sadly, I doubt we'd be able to sell for $10K less than we paid right now, despite all the money we've put into the place in the last three years.

 

Our house is the same way. We bought it 3 years ago (new construction) and they are selling the exact same floorplan but with upgrades like a bigger kitchen, upgraded master bath, etc for about $40K less than what we paid. It really sucks. There's a house that forclosed down the street. It's about 700 square foot bigger than our house, and a year newer selling for $23K less than what we paid for ours.

[Edie]

There is going to be a lot of pain for many people before this shakes out. Our story is that we just got an equity loan so we can remodel our kitchen (since we can't move) and I think we have now maxed out the amount that we can borrow -- or pretty close to it. Last year we had a sizable cushion.

 

There has been ($billions? $trillions?) lost nationwide in home values -- to where this whole mess can traced.

[M. (hristine]

Oh gee. I wonder where all the money went?

[bjorn_skurj]

My homie Franklin D. once said something about having to save capitalism from the capitalists.

[Edie]

The thing is -- the money has always largely been on paper. If you borrow $X for 30 years for a home (because its valued to be at least X) and after 2 years your home value is estimated to be $X+Y but you don't sell-- that increase of Y is just on paper. The biggest problem is that the + is becoming a - for many people.

[EL the Famous]

so, am I still supposed to think that the economic policies of the last 8 years were good ones and the economy is getting healthier?! frankly, i'm scared shitless about things as a whole.

[EL the Famous]

The thing is -- the money has always largely been on paper. If you borrow $X for 30 years for a home (because its valued to be at least X) and after 2 years your home value is estimated to be $X+Y but you don't sell-- that increase of Y is just on paper. The biggest problem is that the + is becoming a - for many people.

 

after agent fees, taxes, prior home improvements, buyer requested improvements...my neighbors just sold their home at a loss. man, i'm crossing my fingers for something to improve or even level out in the next 2 years before we look to getr outta' ours.

[bjorn_skurj]

so, am I still supposed to think that the economic policies of the last 8 years were good ones and the economy is getting healthier?! frankly, i'm scared shitless about things as a whole.

Me too, and I don't own shit, except some Mets throwbacks and some old D&D books. Thank cod my sister is rich.

[Sir Stewart]

man, i'm crossing my fingers for something to improve or even level out in the next 2 years before we look to getr outta' ours.

Seconded.

[NightOfJoy]

so, am I still supposed to think that the economic policies of the last 8 years were good ones and the economy is getting healthier?! frankly, i'm scared shitless about things as a whole.

 

Paraphrasing here from a post I located elsewhere....

 

"From a silver lining perspective, this is a golden opportunity for the Obama campaign to jump ALL over McCain. The

economy is going to be the main subject for the next couple of weeks. McCain is going to have a hard time explaining what he's going to do about this crisis without either 1) enraging the rabid pro-market right wingers, or 2) looking like a do-nothing

candidate. This should be a good media cycle for Obama."

[MattZ]

Holy crap this market is imploding. Down 500 points!

[fortuneinmyhead]

Ah yes trickle down economics at its best.

 

Someone forgot to look at their balance sheet ....... arg now the Titanic is sinking. Poor poor investment bankers. I'm gonna drink a beer for them.

[MattZ]

Poor poor investment bankers. I'm gonna drink a beer for them.

 

If you think those are the only people that will be impacted by this, well, I am not sure what to say.

[bjorn_skurj]

Shit trickles down a lot faster than money.

[Winston Legthigh]

Shit trickles down a lot faster than money.

Trickles? you should eat more fiber.

[EL the Famous]

Paraphrasing here from a post I located elsewhere....

 

"From a silver lining perspective, this is a golden opportunity for the Obama campaign to jump ALL over McCain. The

economy is going to be the main subject for the next couple of weeks. McCain is going to have a hard time explaining what he's going to do about this crisis without either 1) enraging the rabid pro-market right wingers, or 2) looking like a do-nothing

candidate. This should be a good media cycle for Obama."

 

i'd rather just buy a few 'change' t-shirts and yard signs...this is an issue NOW, not just a campaign bullet point.

[Guest Jules]

Trickles? you should eat more fiber.

B-A-N-A-N-A-S

[bjorn_skurj]

B-A-N-A-N-A-S

I had a banana today with my Kashi cereal. Strawberries too. The Dow fell out its asshole today.

[fortuneinmyhead]

If you think those are the only people that will be impacted by this, well, I am not sure what to say.

 

oh i realize it affects everyone ~ harder to get credit, more businesses closing, more layoffs, dollar worth even less ... i have been expecting it for a while. sad to see it happen, not a lot i can do about it except attempt to vote for candidates that might institute sound monetary policy (do they even know what that is?).

 

the irony is the highest ups at lehman's will probably leave with a golden parachute of millions or else end up the ceo of another bank. hey they might even head up the Fed!

[EL the Famous]

throw in strains on the FDIC making the money in your bank accounts much less safe or at least hard to get at. if you've got over $100K tied up in your bank, might not be a bad idea to look at spreading a little of that around.

[Guest Jules]

What El says is true, but there are many banks out there that are in fine financial shape, some bad loans notwithstanding. Do your research.

[NightOfJoy]

i'd rather just buy a few 'change' t-shirts and yard signs...this is an issue NOW, not just a campaign bullet point.

 

I know. As I said.....looking at the silver lining.....

 

I spoke with a couple Lehman guys today.....who pull in 500k all-in easily....and they're freaking out.

[MattZ]

Just wait until the libraries start closing, the trains stop running so often, the garbage isn't picked up so often, etc. I am not suggesting anyone anywhere should shed a tear for the i-bankers of the world. But the financial industry funds 20 percent of the entire state's revenue. It accounts for 9 percent of the city's revenue. This is bad news for all new yorkers -- not just the dudes getting laid off today.