Query: should it make us feel better to know that the folks in the bottom 99% of the top 1% sometimes take a hit quite like that we bottom 99ers so often take from them? (Can you follow that?)
In today’s Times we learn that the guys most directly responsible for losing billions at the top financial institution (who often walked away with multi-million dollar severance packages) are being actively sought for high paying jobs to wreak destruction elsewhere, while the folks at the bottom of that section of the totem pole who were laid off due to the fallout from the havoc caused by those exalted few have few if any prospects for finding new jobs:
Under the stewardship of Dow Kim and Thomas G. Maheras, Merrill Lynch and Citigroup built positions in subprime-related securities that led to $34 billion in write-downs last year. The debacle cost chief executives their jobs and brought two of the world’s premier financial institutions to their knees.
In any other industry, Mr. Kim and Mr. Maheras would be pariahs. But in the looking-glass world of Wall Street, they — and others like them — are hot properties. The two executives are well on their way to reviving their careers, even as global markets shudder at the prospect that Merrill and Citigroup may report further subprime losses in the coming months.
Who can blame them. After all, no one but the looney left saw this one coming. In any event, they have precedent on their side:
Perhaps the most notorious example of failure leading to prosperity is John Meriwether. Ousted from Salomon Brothers in 1991 for his role in a bond trading scandal, he became a co-founder of Long Term Capital Management, the hedge fund that nearly collapsed in 1998, rattling markets worldwide. He has since founded a second fund, JWM Partners, with assets of around $3 billion.
More recently, Brian Hunter, the energy trader at Amaranth Advisors whose disastrous bets led to the disintegration of that $9 billion hedge fund, is now advising a private equity fund called Peak Ridge on starting a hedge fund. Howard A. Rubin, a trader at Merrill Lynch, who lost $377 million in 1987, quickly landed a job at Bear Stearns, where he had a successful career.
But for the relatively hapless folks occupying the lower rungs, things don’t look so good:
The quick comebacks of these executives stand in stark contrast to the plight of the hundreds of investment bankers who have received pink slips in the last two weeks. They also illuminate a peculiar aspect of Wall Street’s own version of a class divide. Senior movers and shakers often land on their feet, no matter how egregious the losses tied to them. The industry rank and file, however, from mergers-and-acquisitions bankers at Bank of America to sales executives in Citigroup’s hedge-fund servicing business, see their jobs eliminated despite being far removed from the subprime crisis.
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