From a family member:
A protester's sign in front of the New York Stock Exchange: "Jump you fuckers!" with the comment "I try not to forward things, but I just had to send this. Points for creativity and brevity of message."
Zero points for forgetting that your sister worked across the street from the New York Stock Exchange for seventeen years.
It's fun to demonize someone else, isn't it? But the majority of people who work in financial services in New York are just regular folks, trying to cover their bills. Think folks like Doug and Carrie in The King of Queens--that's what most people who work in financial services are like. Then there is a layer of professionals very like me...in fact I was one of them.
The financial industry expands and contracts much more than other industries. I haven't seen the job loss numbers in a few weeks, but I seem to recall losses of over 170,000 jobs in the last survey I saw. That's not just in banks, investment banks and insurance companies--it also affects cab drivers, coffee shops, hair salons.
I can tell you from personal experience in 1998 when I was laid off the first time that it is a double hit when these waves of job reductions occur. Not only do you not have your old paycheck, but there are very few jobs to compete for. And the bills keep coming. Not surprisingly, there were a few people who jumped. One woman I knew jumped under a subway car.
I know you didn't intend to offend me, and you didn't. But I do find these flip responses annoying. There is plenty of blame to go around for this crisis, and plenty of pain as well.
Was there greed on Wall Street? Yes. But if you rounded up the people who were driven solely by greed, I believe you would be able to fit them in the average small town high school gymnasium. Add the ones who simply did not understand the complexities of the financial instruments they were selling, and then you need a much bigger venue.
But that is the nature of the financial industry. Do you think that the people who sell variable annuities with guaranteed income streams really completely understand the embedded risks? Very few do. We have to rely on regulators to bullet-proof the products that are sold, and regulation tends to focus on the general public, not on the supposedly sophisticated investors that bought mortgage backed securities. Regulators failed us in the years since mortgage requirements were relaxed. And individuals who took out mortgages that they couldn't afford deserve blame as well. Plenty of blame to go around.
Personally, I have lost about 40% of my retirement savings if you measure it today. But I have great confidence in the US financial system to rebound. I was on Wall Street (literally, in an office overlooking the New York Stock Exchange) in 1987 when the market crashed.
And I was there on 9/11/01. We really thought the world was ending then. This crisis does not feel anywhere near as bad as that--we were unsure whether the markets or the city itself would survive the attack. An attorney I worked with briefly appeared on the front page of the New York Post head down on his way out of an upper floor window of the World Trade Center. Another jumper.
From one of our recent newsletters, here are a few other downturns for your consideration:
October 1973: Arab Oil Embargo launced a financial crisis, time to market improvement was 12 months
October 1974: Franklin National bank collapse (bankruptcy), time to market improvement was 2 months
May 1984: Continental Illinois bankruptcy, time to market improvement was 2 months
May 1986: Drexel Burnham Lambert bankruptcy, time to market improvement was 2 months
October 1987: US market crash (financial crisis), time to market improvement was 2 months
February 1995: Barings Bank bankruptcy, time to market improvement was 0 months
September 2001: 9/11 attacks (political crisis) time to market improvement was 12 months
There is no guarantee, of course, that we will see a near term recovery in the markets, but my experience of past downturns gives me a lot of confidence in the future.
And I hope that nobody jumps over loss of a job or part of an IRA.