Wall Street Reorg: Impact on Real Estate?
After a weekend spent huddling together, Wall Street chieftains were unable (or, more precisely, unwilling) to come up with a plan to save faltering Lehman Brothers, which is now expected to file for bankruptcy. Merrill Lynch, which had seen its shares drop along with Lehman’s in recent days, agreed to be acquired by Bank of…
After a weekend spent huddling together, Wall Street chieftains were unable (or, more precisely, unwilling) to come up with a plan to save faltering Lehman Brothers, which is now expected to file for bankruptcy. Merrill Lynch, which had seen its shares drop along with Lehman’s in recent days, agreed to be acquired by Bank of America for close to $50 billion. Meanwhile, questions about giant insurer AIG’s ability to weather its own set of mortgage-related problems continued to mount. My goodness. I’ve been in the business 35 years, and these are the most extraordinary events I’ve ever seen, said Peter G. Peterson, co-founder of the private equity firm the Blackstone Group, who was head of Lehman in the 1970s and a secretary of commerce in the Nixon administration. The big question is whether these moves will increase investor unease or, by removing a few of the major question marks, hasten its recovery. The same can be said for the local real estate market. While many of Merrill’s remaining 60,000 employees will undoubtably be kept on, the same can’t be said for Lehman’s workforce of 25,000; on the other hand, market’s hate uncertainty, and maybe this just helps ensure that New York market is on target to meet Jim Cramer’s projected turnaround date of June 30, 2009.
Two Major Wall Street Banks Falter [NY Times]
Crisis on Wall Street [WSJ]
Photo by huachen
I guess I’ll just cut and paste part of my response to the forum post:
A lot of people who work (or used to work) in the finance industry are going to be selling. A lot. And not many people will be buying.
The impact of these events will disproportionately affect NYC. The combined loss of income and wealth in the City is staggering.
Apart from that, the world is not ending, and if you are not too leveraged (and if you don’t work in finance) you will be fine. In the long run, NYC real estate will be fine. But can you survive to see the long run?
Physical threats on Brownstoner?! Who knew people would get all gangsta over Brooklyn real estate. Although the What has a major case of crazy- his doom day scenarios is panning out.
Everyone is nervous! Here today, Gone tomorrow. Perhaps the banks, like the housing market needs some correction. I wouldn’t buy anything right now, since there are still a few more bumps coming. AIG & WAMU are next.
I didn’t see them either. But I think Brownstoner was well justified in banning here. There are many many ways to express yourself that are challenging, thought-provoking, even scary, that wouldn’t justify banning. He had every last chance to behave like a human being and didn’t take them.
“But you would be nuts to buy today.”
Not if the right deal lands in your lap. Lowball to where you think the price will be. You have absolutely nothing to lose. The feedback would likely suprise you.
JANE JACOBS I HAVE THEM IN SEPARATE ACCOUNTS, ONE JUST OVER 100 GRAND AND THAT BANK IS DOING FINE. Surely, if these banks all go under than cash won’t matter any more and in that case I am happy I own a home… and a rental since they won’t be bothering me for rent. If this kind of thing happened it would be imperative to jump to precious metals cause the fed would just start prinTING…
Physical threats? – jeeze louise. Of course he should be banned in that case. But on the eve of his affirmation! How ironic.
I didn’t see the physical threats postings. What was he saying???
Ditto! Great to see you. We need some humor around here today.
Dave, why haven’t some stocks opened yet? What’s your guess on the total number of points the Dow will be down today?
Sorry, folks, but when he started in with the physical threats yesterday, enough was enough.