Sunday, September 14, 2008
Two More Twin Towers Gone!
In a development eerily reminiscent of yet another New York City cataclysm, coming as it did almost seven years to the day after the attack and destruction of The World Trade Center Towers, two of Wall Street's most venerable investment banks, Merrill Lynch and Lehman Brothers, met their demise. Both firms were, to a greater or lesser extent, victims of their own over vaulting ambition and greed, and while Merrill Lynch was merely bought out by Bank Of America in a desperation deal, Lehman Brothers was in such poor shape that no large financial institution could be persuaded to take it over. After over one hundred and fifty years as a fixture in New York City's investment banking scene, an insolvent Lehman Brothers ingloriously collapsed. Until its demise this weekend, Merrill had existed for ninety one years. Interestingly, this is almost as long a span as the still breathing Federal Reserve Bank, which came into being in 1913.
Not too many years ago, something of a Faustian bargain was struck by powerful American entities such that the U.S. exchanged its manufacturing prowess for the prospective glories of what became known as the FIRE economy. Fortunes were made to be sure, but that ill advised arrangement-ill advised for the nation as a whole- has now, for all intents and purposes, come a cropper. Insurance giant AIG is rumored to be in the financial equivalent of cardiac arrest, and so it is no exaggeration to suggest that New York City, once considered, along with London, to be the greatest financial center on the planet, is now in a state of terminal decline. Ponder, preferably with a double shot of your favorite alcoholic libation in hand, just what this all means, not just for the citizens of New York and The Empire State, but for the entire nation.