- Sep 27, 2005
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By BEN WHITE and JENNY ANDERSON
Published: September 14, 2008
Fear and greed are the stuff that Wall Street is made of. But inside the great banking houses, those high temples of capitalism, fear came to the fore this weekend.
As Lehman Brothers, one of oldest names on Wall Street, filed for bankruptcy protection, anxiety over the bank?s fate ? and over what might happen next ? gripped the nation?s financial industry. By Sunday night, Merrill Lynch, under mounting pressure, had reached a deal to sell itself to Bank of America for $29 a share or about $50 billion, according to people with knowledge of the deal.
Dinner parties were canceled. Weekend getaways were postponed. All of Wall Street, it seemed, was on high alert.
In skyscrapers across Manhattan, banking executives were holed up inside their headquarters, within cocoons of soft rugs and wood-paneled walls, desperately trying to assess their company?s exposure to the stricken Lehman. It was, by all accounts, a day unlike anything Wall Street had ever seen.
In the financial district, bond traders, anxious about how the markets would react on Monday, sought refuge in ultrasafe Treasury bills. Greenwich, Conn., that leafy realm of hedge fund millionaires and corporate chieftains, felt like a ghost town. Greenwich Avenue, which usually bustles on Sundays, was eerily quiet.
A year into the financial crisis, few dreamed that the situation would spiral down so far, so fast. Only a week ago, the Bush administration took control of Fannie Mae and Freddie Mac, the nation?s two largest mortgage finance companies. Then, before anyone could sigh a breath of relief after that crisis, Lehman was on the brink.
As details of Lehman?s plight began to trickle out on Sunday, the worries deepened that big financial companies might topple like dominoes. Bank of America began discussions to buy Merrill Lynch, the nation?s largest brokerage.
?I spent last weekend watching Fannie and Freddie die. This weekend it was Lehman,? said one longtime Wall Street executive.
By late Sunday, a consortium of banks, working with government officials, announced a $70 billion pool of funds to lend to troubled financial companies.
The rat-a-tat-tat of bad news has frayed nerves up and down Wall Street. ?People are just weary,? said another executive. And even more ill tidings loom. Thousands of employees at Lehman are likely to be laid off, casting them into one of the worst Wall Street job markets in years. Other banks are cutting back, too.
Even employees who manage to hold on are likely to make a lot less money this year. Bonuses are not only going to decrease; for many, they will evaporate completely.
While people were stunned by the near collapse of Bear Stearns in March, they were flabbergasted that Lehman, a respected firm with a 158-year history, could be brought to its knees. Many were equally shocked by the downfall of Richard S. Fuld Jr., Lehman?s chairman and chief executive.
story continues here:
http://www.nytimes.com/2008/09/15/bu...Kw&oref=slogin
Published: September 14, 2008
Fear and greed are the stuff that Wall Street is made of. But inside the great banking houses, those high temples of capitalism, fear came to the fore this weekend.
As Lehman Brothers, one of oldest names on Wall Street, filed for bankruptcy protection, anxiety over the bank?s fate ? and over what might happen next ? gripped the nation?s financial industry. By Sunday night, Merrill Lynch, under mounting pressure, had reached a deal to sell itself to Bank of America for $29 a share or about $50 billion, according to people with knowledge of the deal.
Dinner parties were canceled. Weekend getaways were postponed. All of Wall Street, it seemed, was on high alert.
In skyscrapers across Manhattan, banking executives were holed up inside their headquarters, within cocoons of soft rugs and wood-paneled walls, desperately trying to assess their company?s exposure to the stricken Lehman. It was, by all accounts, a day unlike anything Wall Street had ever seen.
In the financial district, bond traders, anxious about how the markets would react on Monday, sought refuge in ultrasafe Treasury bills. Greenwich, Conn., that leafy realm of hedge fund millionaires and corporate chieftains, felt like a ghost town. Greenwich Avenue, which usually bustles on Sundays, was eerily quiet.
A year into the financial crisis, few dreamed that the situation would spiral down so far, so fast. Only a week ago, the Bush administration took control of Fannie Mae and Freddie Mac, the nation?s two largest mortgage finance companies. Then, before anyone could sigh a breath of relief after that crisis, Lehman was on the brink.
As details of Lehman?s plight began to trickle out on Sunday, the worries deepened that big financial companies might topple like dominoes. Bank of America began discussions to buy Merrill Lynch, the nation?s largest brokerage.
?I spent last weekend watching Fannie and Freddie die. This weekend it was Lehman,? said one longtime Wall Street executive.
By late Sunday, a consortium of banks, working with government officials, announced a $70 billion pool of funds to lend to troubled financial companies.
The rat-a-tat-tat of bad news has frayed nerves up and down Wall Street. ?People are just weary,? said another executive. And even more ill tidings loom. Thousands of employees at Lehman are likely to be laid off, casting them into one of the worst Wall Street job markets in years. Other banks are cutting back, too.
Even employees who manage to hold on are likely to make a lot less money this year. Bonuses are not only going to decrease; for many, they will evaporate completely.
While people were stunned by the near collapse of Bear Stearns in March, they were flabbergasted that Lehman, a respected firm with a 158-year history, could be brought to its knees. Many were equally shocked by the downfall of Richard S. Fuld Jr., Lehman?s chairman and chief executive.
story continues here:
http://www.nytimes.com/2008/09/15/bu...Kw&oref=slogin
