I actually have two cousins that moved to DC this year. The other one is from the other side of my family. She’s about 10 years younger than I am and used to work in Korea for Lehman Brothers. During her last year in Korea, she worked for Merrill Lynch.
While we were having dinner, she began to tell me about her former Lehman Brothers colleagues. Apparently the entire mortgage division in Korea was closed sometime last year. The employees were given generous ‘early retirement packages’, which is actually what they call it, an ‘ERP’. But it sounded more like a severance package. One colleague from the mortgage arm interviewed with my cousin’s former boss and was hired after nearly a year of unemployment, as the ERP ran out. Just a sign of how bad the subprime meltdown is in the rest of the world. It took her nearly a year to find another job.
Then my cousin told me a story about Merrill Lynch. At Merrill, she worked in the Private Client division, i.e. services for high net worth individuals. I guess they guided their clients towards strong American financial stocks resulting in a lot of their clients holding Washington Mutual shares and now their net worth is severely eroded due to the crashing market in the US.
Later as she was showing me her iPhone, she happened to hit the Bloomberg application and we looked at the market results from last Wednesday. She gasped when she saw that the entire right hand column of the screen was red with declines across all international market indices.
While it’s bad here and people are probably going to lose their jobs, it’s just as bad in other places. Misery loves company I guess?
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My best friend works for Merrill Lynch Private Client Wealth in California and she said they’ll be okay. I guess they’re the crown jewels of Merrill, so at least her job is safe. Scary! And yeah, she pushes American Funds.
The situation is really scary but as an insider I can tell you that its tensed and people are even more alert than when it first hit us.