for a very sobering post. I'm sure we have only seen the beginning of the trickle down. Nice to see you posting.

I used to hear that all the time from a Wall Street executive who was responsible for letting thousands of people "go" every time a merger took place. It was like cheap psychological pablum handed out to the unfortunate saps on the receiving end of those hastily arranged meetings where department heads from two different banks would compare their employment rosters and figure out which 200 people would have jobs and which 500 people would not.

If you were let go, you were supposed to summon up some inner fortitude after a few days of mourning, and "move on". Never show any anger, and on all your job interviews in the following months or years act like there were no emotional scars from being summarily junked by a system that one day decided your talents and experience were useless, or maybe your age was an impediment.

If you were lucky enough to remain in your job, the fear was ratcheted one notch higher, but you couldn't show it. You had to remain positive at all times, subservient and deferential to your masters, and willing to put in even more absurd hours, or you could be next on the list.

At least through the 90s you could blame all this on the necessities of industry mergers and cost cutting. But now it's much worse because the blame falls on the very management which put the industry into a death spiral, yet continues to reap absurd rewards while culling hundreds of workers from the rolls now and then.

It doesn't give you much faith in American capitalism or the corporate model.

One thing about the "hose the common stock holders" mantra that is going around is that common stock holders, while in theory owners of the company, are not. They don't have effective voting control. Instead what is happening is that holders of debt had effective control of the company, and were, in effect, treating common stock holders as "junk bonds in drag."

This means that the debt holders have the best of both worlds: they essentially direct the company, but their money is the last to go. LBHC went down not because it was really insolvent, but because the debt holders wanted to get theirs out now.

What you will find in a number of these large financial bankruptcies is that ordinary people held a disproportionate share of the common stock, Freddie and Fannie were marketed not as a high flying highly leveraged play on the housing bubble, but as a little old lady stock, and are going to take a disproportionate share of the losses.

The upper middle class has believed that there are two viable choices for their political allegiance, Republicans and Democrats, they are about to get hosed by both of the two major political parties.

"The upper middle class has believed that there are two viable choices for their political allegiance, Republicans and Democrats, they are about to get hosed by both of the two major political parties."

Yet another reason for instant runoff voting although I haven't got my hopes up about it.

Where's the impassioned plea for humanity when thousands of other workers lose their jobs?

Unfortunately, the answer to the employees of Lehman (and probably to many at Merril and BofA and AIG and WaMu and Wachovia) is the same given to the guy laid off at the local RV manufacturer or chip plant: "File your unemployment claim, start looking for work and look into retraining. Cut expenditures. Liquidate assets if you need to." The people at Lehman are probably in better shape than the guy who works in the cabinet shop at Country Coach--they have the education and some marketable skills.

A related question is has saving for a rainy day become unfashionable? I can understand that the guy who works on the headsaw at the local lumber mill doesn't make enough to save much, but the folks who actually have surplus income beyond their subsistence needs should be saving. My parents were depression-era immigrants and they never let me forget how tough things can get.

Like the former employees of Lehman Brothers, these were people without real world skills. . . .They had never tightened their belts or cut corners. They had never reduced, reused, and recycled. They've never clipped coupons or shopped from the clearance rack.

But I think an ex-IT person or ex-banker can learn reducing, reusing, and recycling somewhat more easily than an ex-textile worker can learn to work in a biotechnology lab, or than a construction worker and practical nurse can learn the scams that a realtor and banker may be pulling in pushing a subprime mortgage on them. Almost anybody can do almost anything. But nobody can do everything.

We've accepted a highly hierarchical society in which people with status credentials don't have to do "real world skills", and everybody else is plucked and then blamed for greed and lack of personal responsibility. I appreciate your instinct to empathize with all your brothers and sisters. I get empathy fatigue before I finish thinking about the people who paid full price for a retirement annuity from an insurance company that just became nearly worthless, especially since people who still have the high-flying jobs are still congratulating themselves on how they earn every penny through hard work and foresight, unlike the losers who deserve their losses.

Until we get the political will to acknowledge that nobody can do everything and to put in place appropriate protections against social predators, this will keep happening. Unless tax cuts fix everything, of course.

From Bloomberg:

Merrill Lynch & Co. Chief Executive Officer John Thain and two former Goldman Sachs Group Inc. colleagues he recruited may reap almost $200 million for their year running Merrill if they leave or are given lesser roles after Bank of America Corp. buys the brokerage.

Thain, who got a $15 million bonus when hired in December, stands to get an additional $11 million in accelerated stock payouts if he doesn't stay after the deal, compensation consultant Graef Crystal said. Trading chief Thomas Montag, who joined in August, may get $76 million including bonus and accelerated awards. Strategy head Peter Kraus was given $95 million including bonus and stock awards to replace a Goldman package he had to forfeit, people familiar with the matter said.

Credit Crisis: Just how bad can it get?

Have we reached a turning point in the credit crisis with the bankruptcy of Lehman or is this just the start of worst times to come? Sean Farrell, Sean O'Grady and Stephen Foley ask the experts

Wednesday, 17 September 2008

Is Citibank just the trustee for the bond debt, or are they actually into Lehman for $138 Billion? Page 7 of 19 - List of 30 largest creditors:

http://www.creditslips.org/creditslips/Lehman.pdf