I sent a message to an old colleague asking if she knew about the state of Lehman, She replied, “Its just speculations. Nothing is final.” Two things; either she was in denial that her company was going down the toilet or she was clueless about the severity of the situation. The wildfire has begun as banks are watching their backs. There are two parties in this saga; those that will be devoured and those that devour. Right now the fate of AIG and WAMU is hanging on a thread. I don’t think anything drastic will happen immediately, as that would only put the market in disarray. The street has a lot to deal with now that Bank of America bought Merrill and Lehman is filing for bankruptcy that any more news of another bank faltering fast will increase the suicide attempts in the city. Haven said all hope isn’t lost; the future of Corporate America rests on the top very very few banks. The feds are not going to be bailing anyone out it seems, so the likes of Goldman and Morgan are going to take drastic steps. I see negotiations well on the way and a few compromises.
On another note, the US will increase high unemployment rates, NYC will suffer as people will begin to curb their spending; theatres, restaurants, operas, clubs will experience a slow down. Maybe the bars will see a surge in operations as people will be drinking themselves to stupor in the months to come. There will be an increase in business school application, especially the class of 2010. Getting into the top ten or even twenty will be even more competitive. Getting a job in the already wounded market will be excruciating. But, we will endure like we have always endured. The big apple will remain sturdy. All that there is to do is wait for the tide to pass.