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The phone has rung off the hook all weekend. “Are you OK?” I've asked friends whose husbands have been at Lehman Brothers. No, of course they are not. They just saw everything they've worked for go down the drain. A lunch barbecue with a Lehman executive who has been there 16 years was cancelled. No explanation needed.
The Saturday papers predicted the end of other institutions, too: Merrill Lynch, AIG. On Sunday morning one of my savviest investor friends told me not to worry about Merrill Lynch. He said it had too many good parts to implode. He had seen John Thain, the chief, very recently and had a long talk. Thain had said his bank was too valuable to go under.
By Sunday night my friend was on the phone again. Now, the news was that the Bank of America was ready to buy Merrill at $29 a share. Given that Merrill's share price had fallen to $17 on Friday, this news, said my friend, proved that he and Thain had been right.
Sort of. We live in terrifying times. Even the election is not as much of a distraction as it should be from the economic pandemonium we are experiencing. At lunch and at dinner we all debate whether the panic is manufactured or whether a collective mental panic has always played an integral role in recessions, regardless of what the reality is.
Ordinarily people might be wondering about other things right now. For instance, there is artist Damien Hirst's brash step of cutting out the middle man in selling his works; there is the huge exhibition of contemporary art in Russia on Wednesday. Soon Daniel Radcliffe comes to Broadway in Equus. We're ending fashion week. But women talked not about clothes but about children, schools and how stressed their husbands were.
Until this week I've never heard really rich people — as in billionaires — sound scared. But now they do. Sure, they say, it's no time to be panicking. Stay calm and there are fortunes to be made. There are lots of assets going cheap and some people are going to get rich.
But for most of us it is time to hunker down. Time to hope we don't get that phone call: “Are you OK?” The answer, for all of us in New York, is no, we are not.
Reader views (8)
Here's a sample of the latest views published.
Are Sainsbury interested. How to feed a family for a week on a fiver. 1 tin cheap tomatoes. half a bag of soya mince. Curry Spices. Coconut milk. Squirt of tomato puree. 5 onions. Garlic bulb. 1 large carrot = 6 pint pot. Serve with. 55p spuds day 1. 37p spaghetti day 2. 37p bag rice day 3. Repeat day 1 on day 4 repeat. Inbetween cheap bread and margarine with mushrooms from fields, tomatoes from garden, and eggs from chickens in garden. Eat your heart out Delia. Loads more recipes like this.
- Amadam, middx UK
Quit your whining, Vicky. You and your friends brought this on yourselves. There was a reason the industry was heavily regulated in the first place. Those rules protected you and yours as much as they protected "the little people" and the economy as a whole. But your sort didn't think the rules should apply to them. Well, you made your money the quick and dirty way, and now you're gonna lose it the old fashioned way. That's what happens when you turn back the clock on lessons learned. You get to relive the disastrous mistakes of your ancestors. Couldn't happen to a more deserving bunch of self-serving fools.
- Gavrielle Laposte, Chicago, Illinois, USA
Is this lady for real? Right now, nobody but the super rich is worried about the super rich, somehow they always seem to to come out of these downturns still very rich. My thoughts are, what effect this slump will have on the hard working people of london? The really rich people who were responsible for Lehmans downfall will hardly suffer at all, they will probably have made sure of that by investing their private capital in a much better run company than theirs.
- James Hennessy, london england
It's nice to see such an 'inclusive' discussion. Gone are the days when even a rudimentary grip of the facts is needed to have an opinion. Bravo! Let's put things into perspective. Of course nobody should feel sorry for billionaires who lose money, but where do you think all the cheap cash that people have been using to buy houses, holidays and cars came from? Everybody is worse off in a recession.
- Mark, London
I can't feel sorry for the "B"ankers that have been robbing us blind! Fourteen billion paid out in bonuses 06/07 and all from a shrinking pot! So what else can it be called, except theft. They are not that clever or they wouldn't have got into such a mess! So why the excessive bonuses? Because they can steal with impunity coz so many politicians end up on big fat cash consultancy directorships. Dishonest yes. Future, very grim under any party but under lying Labour not a chance.
- Mike, London
I so agree Mr/Mrs Essex. Am I supposed to feel sorry for the people that drained this market in the first place? Who offered credit to those who couldn't afford it? To those who laughed all the way to the Maldives (I'm sure that's far too naff for them), while the rest of us held our breath and tightened our belts. Its the banks themselves that are responsible for this complete and utter mess, and I hear via The Today programme that the people at the top responsible for this are still in positions of power. Get lost all of you, sell your second houses in Tuscany and give the economy back the money. Because its going to be us tax payers that bail the banks out. Again. Oo. Sorry. Bit angry.
- Flo, Bath
I don't think you speak for the whole of New York when you say "we are not OK", you are speaking on behalf of bankers, not ordinary people, so please don't pretend bankers represent the whole of NYC. I don't think a school caretaker or plumber could care less what happens to these people or your so called 'super rich'. About time they sounded scared, it's a mess of their own doing!
- Ken Joralemon, london, UK
And you expect us 'ordinary people' to feel sorry for you? Don't hold your breath.
Live like the rest of us, then you won't have to worry about 'school fees', second homes, 'fashion week' and the other unnecessary trivia that rich people concern themselves with.
- Down-To-Earth Person, Witham Essex
