by Deb Cupples | ABC News reports:
"It had been a long time coming, but in the last week, with the collapse of the investment bank Lehman Brothers and the distress sale of another, Merrill Lynch, thousands of jobs and some 700-billion dollars in wealth, in stock, simply disappeared...."
Below is where it gets funny (in a bitter way):
"A lot of those people will have to sell their homes, they're going to cut back on the private jets and the vacations. They may even have to take their kids out of private school," said Frank. 'It's a total reworking of their lifestyle....'
"'It's going to be very hard psychologically for these people,' Frank said. 'I talked to one guy who had to give up his private jet recently. And he said of all the trials in his life, giving that up was the hardest thing he's ever done.'
"And the city's leading real estate broker, Kathy Sloane, says the worst is yet to come for New York real estate. Some say it's too soon to know but she estimates the value of a $5 million apartment has already dropped almost a million dollars in value, with no end in sight.
"Because a month from now, that same $5 million apartment may be lucky to achieve $3.5 million," Sloane said.
Only $3.5 million? My tears are creating a river. What about the $50,000 a year secretaries, the $100,000 accountants, or even the $150,000 a year lawyers who worked for these firms?
Chances are they'll be unemployed for a long time. Will they lose their houses? How will they afford health care?
Incidentally, most of the higher ups will be just fine:
"Many at Lehman blame Fuld for dallying while his investment bank went bust, taking risks with other people's money while he cleared over $40 million in salary and stock in the last year alone....
"Fuld isn't the only top executive who remains well-off despite his firm's collapse. Former Bear Stearns CEO Alan Schwartz collected more than $38 million in salary and bonuses in the last three years for which figures are available, though he and Lehman executives also saw their net worths drastically plummet as stock values crashed. Bear Stearns was on the brink of financial ruin when JP Morgan Chase bought it in March.
"The CEOs get no sympathy from Lorraine Hankinson, whose husband worked for decades in the mailroom at Bear Stearns.
"The average guy when he loses, he loses everything and he's got nothing to fall back on," said Hankinson." (ABC)
It's not just CEOs that will come out of this with millions of dollars (or at least hundreds of thousands) to fall back on. Hundreds (maybe thousands) of lower executives and managers will also come out of this without missing meals -- some of the same people who made irresponsible decisions in order to get commissions or cash out their stock options at higher prices.
Let's hope that Congressman Waxman's probe leads to some real accountability. Some of the people who caused these disasters might deserve prison. All of them should be disgorged of whatever shareholder dollars they took from the company based on their irresponsible or fraudulent conduct.
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