Reuter’s says the increasing number of suicides is related to shame more than loss.
Thierry Magon de la Villehuchet (December 23, 2008)
Co-founder and chief executive officer of Access International Advisors. Duped by Bernard Madoff.
Adolf Merckle (January 6, 2009)
German billionaire who made a bad bet on Volkswagen.
Steven L. Good (January 7, 2009)
Real estate power broker.
The Moral Stage of Wall Street from The New Yorker. Thanks, Ben.
Swiss bankers are not known as paragons of transparency and moral accountability, so it’s a nice surprise to read that the top officials of UBS, the foundering financial institution recently bailed out by the Swiss government, will forgo twenty-seven million dollars in compensation and bonuses. It appears that these Swiss bankers have a faint pulse of shame.
It has not gone remarked upon enough that their American counterparts apparently have none.” The rest of the article…
Message sent to a friend from his CEO. There are lots of messages like this going around:
I’m sorry to say that in light of deteriorating market conditions, senior management has deemed it prudent to institute a salary freeze. What I said last week still goes–we are widely diversified in our revenue streams and are in a good position to weather the storm. But the fact is that we are nevertheless going to be affected, and until we can assess the extent of the damage as the crisis in the financial markets plays out, we are doing what we can to manage our businesses as conservatively as possible. This is no fun, but it is certainly a lot better than Lehman’s fate, or even choosing to make staff cuts by our own volition. So please continue to push forward with your good work. Markets are cyclical and I’m confident this turn will be no different.
It’s difficult for me to convince friends that the U.S. economic outlook is bleak bleak bleak and we are going into a recession.
Partially, this is because my friends and I all live in and around Manhattan where everything is sunny and wonderful (uh, except for all the bankers getting laid off). Most of the people I know outside of finance and journalism (and a lot of people in journalism, sadly) do not pay attention to economic indicators. Apparently, few people read the financial parts of the newspaper, either.
The Wall Street Journal, which I sometimes get angry at, but which is still (for the time being, anyway), a superb resource has a great summary of our impending economic doom in today’s edition (which I just read since I am an insomniac):
As consumers max out their credit lines and banks clamp down on lending, many older and middle-class Americans are resorting to pricey, often-risky alternatives to stay afloat. Some are depleting their retirement accounts, tapping 401(k)s for both loans and hardship withdrawals. Some new fast-cash options allow homeowners to squeeze equity from their houses — without the burden of monthly payments.
Americans are resorting to these more extreme measures due to the combination of dwindling jobs, falling home prices, shaky credit markets and a sharp run-up in food and energy prices. Consumer confidence hit a 28-year low in May, according to the latest Reuters/University of Michigan survey of consumer sentiment. Consumer spending and income inched up 0.2% in April from March, but after adjusting for inflation were flat, government data show.
But Josh, pundits are saying that the worst is over! The banks have written down the mortgage problems! The government will ride to the rescue on housing (someday). The informative Barry Ritholtz links to a great article by Doug Kass pointing out how reliable the punditry has been. Some of the flawed predictions:
• Home prices will never fall (said repeatedly two years ago). REALITY: Look out above. Home prices are falling.
• Citigroup, at $53/share, is inexpensive at only 12x earnings (said last year repeatedly). REALITY: Last sale? $26. Res ipsa loquitur.
• The housing and credit crises are over (said frequently recently). REALITY: The housing depression and the seized up credit markets remain problematic.
• Buy stocks in the long run (always said). REALITY: Stock markets have historically gone through decade-long periods with no price appreciation.
On that last one, check out the history of the S&P 500 index (via StockCharts.com). Click to enlarge. Note 1962 to 1975. Note 1999-2000 to the present.
Want to be more depressed? Check out the DJIA adjusted for inflation.
* Top graphic from WSJ.
