Great Wall of Terror

October 31, 2008

It all started when some not so creditable people were allowed to take loans to buy them homes.  Down the line, some of them started defaulting on their mortgages. Suddenly banks were competing with each other in writing off billions of dollars of assets. Bear sterns went down. Lehman Brothers went down.  AIG went down. Washington Mutual went down. Wachovia is lined up. Overall some sixteen banks in the US have shut down this year.

Wall street has laid off over a hundred thousand people so far this year, and there’s no end in sight.

For those who didn’t know, Indian faces abound across all levels and departments on Wall Street. There’s a Vikram Pandit heading Citi. Finding an Indian MD at a Wall street firm is as hard as watching TV for a few hours without hearing about Raj Thackeray. There are Indian traders, Indian bankers, Indian techies (lots of them). Heck, wall street loves indian food.

No wonder then that Indians have been directly affected as a result of this crisis. I am not even going into the indirect consequences (prices skyrocketing, Sensex crash, IT downturn, movie tickets getting costly etc).

Especially affected are two families that were so taken in by their fabulous lifestyle that they just don’t know what to do.

“It’s ironic but I feel even poorer now,” she adds. “Maybe it’s because . . . we got used to having things. Now we want things more, and it’s heartbreaking for us.”

That’s Mona Mond. This couple was another of the high flying wall street families, coming  to terms with  a reduced income, and unwilling to live like “normal” people.

She’d married a man with a career on Wall Street, and at the very least she was going to live in a house, preferably brand new, with a Jacuzzi in her bedroom and a pool in that yard. There’d be a maid — and no skimping, no worrying that any day Amar, her husband, would lose his job.

“I’m so angry,” says Mona, who is 32 and about to have a second child. “We are living so tight, and we feel so limited. I wanted a big nice house. . . . This was planned.”

This one appeared on the front page of Hindustan Times.

Anand was this high  flying IT guy making a lot of dough, living in a huge apartment, and unable to find a job for many months after he got laid off. Meanwhile, he kept living in his 3000 dollar a month apartment, and applying to 20 jobs everyday with no success.

Anand was ‘let go’. He applied for at least 20 jobs daily. So that’s close to 100 jobs a week. And waited. Waited for e-mails. Waited for interview calls. The bad news kept getting worse. Anand kept cutting his asking rate. From $130 an hour to whatever. For days and weeks, clicking the refresh button on the computer screen and checking missed calls was the only thing to do. And, pay the bills. Grocery, house rent, electricity, water, cell phone, car insurance. The house rent cleaned us out. Almost $3,000 every month.

That’s a shame. On more counts than one. Among others, what self respecting techie applies to, and gets rejected from several hundred jobs? Besides, what happened to living within ones means, or adapting to conditions. Things are bad no doubt, but stop posing for sensationalistic stories, and get yourself out of the mess you are in.

Having been on wall street for the past three odd years, i know a thing or two about how things work here myself. And these (and other) stories amuse me.

Wall street is such a different world from any other industry. It doesn’t produce anything. At least nothing that you can see and touch and feel, and most importantly, hold on to. It’s all virtual money. One day a commodities trader is up by a million dollars, and suddenly crude goes up by 20% and he has lost all of that. Leave alone professional traders, common Joes (plumbers and others) looking for a safe future are losing their entire life savings that they put into stocks.

The high salaries are much talked about. People seem to almost hate wall street bankers for their fat pay packets. What no one mentions is that they are paid so much probably because of the inherent risk that a wall street job entails.

Then there are the wall street employees such as Anand and Mr Mond. Burying your head under the sand does not make you immune from the coming storm. And the ones who didnt’ see this coming, or take action when they saw this trouble starting up, or tone down their lives trying to come to terms with the state of affairs should not get anybody’s sympathy.

Wall street has seen such downturns earlier, and recovered from them. Maybe things will get back to the high and dizzy levels of recent years. But this should serve as a good lesson about the immortality of it all.

No job, no fortune is safe enough. Deal with it.

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9 Responses to “ Great Wall of Terror ”

  1. Great Wall of Terror · I Article on October 31, 2008 at 3:07 pm

    […] Go here to see the original:  Great Wall of Terror […]

  2. Dinesh on October 31, 2008 at 3:37 pm

    You know, it is always a simple philosophy. Live within your means, whatever Job you may be doing, whatever amount you may be earning. You can make a million dollars a month but choose to live a simple lifestyle in a 2 bedroom apartment paying $1000 to $2000 rent. It is up to us to choose this simplicity. The problem was people who couldn’t afford to live lavishly did so. They swiped credit cards like wiping their spectacles every now and then. By the time they come in terms with reality, it was too late.

    I think we as Indians are more traditional and know the value for money, but it is easy to get too carried away when we live in the west for too long. Whenever I was in India my parents word would be Save and then spend what you can, not what you want. But here you spend what you want and save if possible. Most of the times there is nothing left to save. People should know and understand the value of saving and spending wisely.

  3. […] Continue Reading […]

  4. Reema on November 1, 2008 at 4:51 am

    I just hope the crisis is over by the end of this year.

  5. amreekandesi on November 2, 2008 at 11:11 am

    @Dinesh – Very true. And this is why i was surprised by the stories in the media about these Indians so caught up with their inflated little worlds. But then of course, you cant weigh everyone with the same balance.

    @Reema – That would be nice, but unfortunately it doesnt seem very likely. Things are still getting worse.

  6. Shefaly on November 5, 2008 at 11:17 am

    @ Dinesh

    They were living within their means but the means vanished/ shrank. :-) Coping with change is not everyone’s cuppa tea. It is easier becoming richer; harder becoming poorer.

  7. amlistening on November 15, 2008 at 12:01 am

    Just saw “Fun with Dick and Jane”…am glad I did not see that a month back. Anyways nice movie to see but only when you have a job in hand ….;)

  8. vikram pandit on December 6, 2008 at 7:18 pm

    Citi CEO Vikram Pandit will address employees today about the bank’s reduction in workforce, reports CNBC’s Charlie Gasp… G20 Plan Enough? As world leaders at the G20 meeting agree on further coordinated action in an attempt

  9. london plumbing on February 7, 2010 at 8:07 am

    Some times the loan takers have many problem regarding with refunding,as they haven’t get much money.

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