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
This is likely to be ugly.
I guess having 6 months since Bear Sterns wasn’t enough for the other investment banks to get their finances stabilized.
Bear, Lehman, and Merrill gone. Wonder if Goldman and Morgan Stanley can hang on as independents or not.
I feel sorry for the honest hard working people at those companies but don’t have much sympathy for those who thought it would be a great idea to borrow $40 for every $1 they had and invest it in real estate derivatives (I’m mean, at least if they had invested it in real estate, they could give each employee a house as a severance package!).
I actually didn’t think Merrill’s situation would get resolved so soon. If Goldman and Morgan can either convince everyone they are OK or find partners quickly, that will probably get everything to the bottom faster, but I don’t think there will be a strong “up” trend in the NY economy (or tax receipts or real estate) for a while.
It’s likely new regulation will squeeze profit margins (and thus salaries and bonuses) for the Wall Street survivors.
Anyway, remind me not to look at my 401k for a while…
suburbandude-
“But you would be nuts to buy today.”
IF you have cash in the bank, a job and great credit, why would it be nuts to buy today? Should buyers wait for prices to fall or for the pending global depression 1st?
Suburbandude, today might be a good day to take a low ball offer to any seller. They might be inclined to take at given the circumstances.
BTW the markets only down 270 because many stocks have not yet opened!!!
Better make sure to get the $400k out of your bank, since the FDIC doesn’t have enough in the insurance fund to cover prospective failures.
he can only post here if he manages to keep the curse word:liturgical ratio down at 10:1 or below.
Even after the blood bath, there are plenty of people who can afford to buy high-end housing in Manhattan and Brooklyn. But you would be nuts to buy today.
The What has been blocked?? You mean that now only those that want to engage him can while the rest of us can have reasonable discussions??
THANK YOU BROWNSTONER!!
Now that IS good news.
He’s posting on the Forum and says his posts here are being blocked!!!!
“Wall Street Reorg: Impact on Real Estate?”
Absolutely no impact at all. This is a blog about crown moldings, wainscotting and the nabes they define. Why are we discussing this? All the turmoil is accross the river.