Lehman Brothers and Merrill Lynch: What It's Like

Two women caught in the eye of the economic hurricane share their stories with us ... anonymously of course

Woman of the Week

What It’s Like … To Work at Lehman Brothers and Merrill Lynch

Two women caught in the eye of the economic hurricane share their stories with us … anonymously of course

-April Daniels Hussar

Lehman Brothers bankruptcyBailouts, bankruptcies, foreclosures, a plummeting DOW … everywhere we turn lately we hear yet another frightening story about the miserable state of our economy. But what is it REALLY LIKE to be in the center of all this chaos? We found two women – one from the recently bankrupted Lehman Brothers and one from the recently acquired Merrill Lynch – to share their experiences (and some great financial advice) with us.

First we spoke with an associate of Fixed Income Sales based in the San Francisco branch of Lehman Brothers. Just a few days after the bankruptcy was announced, she took the time to answer our questions about what her life is like now that the financial giant has crumbled, and her entire life has been thrown into uncertainty.

How have you been affected directly by Lehman Brothers’ recent bankruptcy?

My entire career, position and opportunities vanished before my eyes. Everything I had worked for over the past four-and-a-half years seemed to disappear. In a “normal” environment, we could all utilize our network of peers, clients and competitors to find new (potentially similar) positions, but today’s Wall Street is like a game of musical chairs, with chairs getting taken away at the same time that more people are pouring into the game.

Was this all a complete, out-of-the-blue shock, or had there been rumors or an inkling of this coming?

Complete out-of-the-blue shock. There were rumors about Lehman not being sustainable, but everyone (clients, employees, competitors) all thought that this just meant Lehman would be acquired or merge with a depository institution (a bank). Never did we envision Lehman having to close the doors.

When you found out about the bankruptcy filing, what was your first reaction? Have your feelings changed since then?

First, it was utter sadness. Lehman is not just a company or a job; it’s a team, a career, a life. My brother works here. Many of my colleagues have become more friends than co-workers. Then I started to feel angry … was this avoidable? Is this a result of management’s greed? Now I’ve realized that anger is certainly not the answer. I’m just sad that none of my options seems even half as good as what I had here (both in terms of people and opportunity).

What’s the climate like at work now?

Probably like the New England Patriots after Tom Brady went down for the season … we are all trying to be optimistic and focus on opportunities ahead. But it’s really hard not to be sad and look backwards.

What’s your biggest fear personally?

My biggest fear is “settling”, whether that means becoming unemployed, having to accept a position that I am not excited about, or only being offered jobs that reflect my abilities years ago instead of today.

Do you have any advice for our readers in terms of finances and the economy?

Many women leave it up to financial advisors or their significant others to take care of their investments and future. Take ownership. Learn the facts for yourself. Understand the risks of where your money is and make sure you’re comfortable with that risk.

Is there anything that you can tell us about being inside this situation that you think outsiders might be surprised by?

Lehman Brothers went into bankruptcy because of a few terrible decisions by a few key people. Lehman Brothers was number one in both equities and fixed income (sales, trading and research). This is both the biggest bankruptcy in the history of the United States as well as the most successful company to file bankruptcy (in most aspects of what we do).

What do you think is the general perception of the public about the company and its employees? Do you think that’s fair and accurate?

The general perception is that we are ALL those very few people who made bad decisions. It’s completely unfair. There are 27,000 employees and probably less than 100 who were involved in the decisions surrounding those toxic assets.

How is this situation affecting your personal life?

It’s been difficult, but at the same time wonderful. The one silver lining to this truly terrible situation has certainly been the support from my friends and family.

Next we heard from a vice president at Merrill Lynch, which, of course, was recently acquired by Bank of America. Her position, for the time being anyway, is less tenuous.

How have you have directly been affected by the recent merger?

So far, we are in “business-as-usual” mode. The acquisition still has to be confirmed with regulatory entities. It is expected to close in Q1 of 2009. That gives the firms several months to determine how each group is handled. Clients are obviously concerned about everything going on in the markets, not just the acquisition.

Was this all a complete, out-of-the-blue shock, or had there been rumors or an inkling of this happening?

This was definitely out of the blue, as the pressure was mounting for a Lehman buyout or bailout. The news Sunday evening that Bank of America had acquired Merrill Lynch was definitely a shock.

When you found out about the merger, what was your first reaction? Have your feelings changed since then?

Though it was a surprise, it was a huge relief Monday morning. My feelings haven’t changed as we realized that the outlook for ML was not looking good in this environment, and there were lots of rumors of ML “being next”. Thain [Chairman and CEO of Merrill Lynch] did the right thing.

What’s the climate like at work now?

People are obviously concerned for their jobs and their bonuses. The general mood is not positive, but time will tell.

What’s your biggest fear personally?

That my job be eliminated when the deal is closed; that I won’t get paid much of a bonus, if at all, in January.

Do you have any advice for our readers in terms of finances and the economy?

As investors search for the “safe” investments, 3M Treasuries are yielding 0 percent. Investors in general should continue to be diversified and not panic. Diversified within equities that they own, fixed income, but also in other asset classes such as currencies and commodities. This is not a time to run for the hills and take huge losses; waiting a bit to see how the dust settles will give a better picture of the conditions of their investments.

Is there anything that you can tell us about being inside this situation that you think outsiders might be surprised by?

Management is making a big effort for the day-to-day to be as “normal” as possible for the employees. Yet they have made a big effort to reach out with conference calls and town halls to be available to answer questions. They are being very positive and communicative.

What do you think is the general perception of the public about the company and its employees? Do you think that’s fair and accurate?

Considering the price movement of the stock, the post announcement increase in MER stock price is quite evident of what the market believes, this is positive…

How is this situation affecting your personal life?

I will definitely hold off buying a new apartment until I see what I get paid as a bonus, if I have a job and where in the city it will be (will it be at the new B of A building?)

Anything you’d like to add?

Despite the government “bailouts” and acquisitions that make everything appear that it is “not as bad as we thought”, we are not out of the woods. CDS [credit default swaps] spreads show the low confidence in most financials still. I don’t think that the consolidation of Wall Street is over. My main concern going forward is that the presidential and vice-presidential candidates know nothing about what is going on on Wall Street, or Main Street for that matter. The outlook for the economy is concerning going forward without the leaders of the country having much clarity on the situation.


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