On October 18th Merrill Lynch announced that it was going to lay off 3,400 workers, about 5% of its workforce. They stated that they were preparing for tougher times ahead and that this move could save them $500 million. I hope they fired those people quickly, because they announced really tougher times six days later!
On October 24th the AP reported that Merrill was taking a $7.9 BILLION writedown on their sub prime mortgage portfolio. Bloomberg confirmed the AP's reporting but said the writedown would be $8.4 BILLION. What's a half a billion dollars among friends? Is Merrill's problem so big that a half a billion is a rounding error? And what did this all lead to?...the biggest quarterly loss in Merrill's history. Do they really think that laying off 3,400 workers will solve billions of dollars of writedowns? Or as a trial balloon floated less than a week before their earnings announcement would soften the blow on Wall Street? Give me a break. Once again workers are the expendable currency for corporate growth.
And how does management position themselves after they make these announcements? They "come clean" and say it was bad judgment and weak risk management strategies, careful to avoid saying that it was their BAD JUDGMENT. Whatever happened to accountability? Whatever happened to credibility? How stupid do they think we all are? Why aren't the shareholders (along with the regulators) banging at Merrill's doors? And why aren't the workers who are getting fired rising up and refusing to sign those general releases that the tough guys in HR make them sign in order to get their severance? Ooops, we know the answer there.
MERRILL LYNCH (and many of its Wall Street counterparts) ARE OUT OF CONTROL! And everybody is losing. What a shame that what was an admired symbol of of all that is good with capitalism has been reduced to a pile of its own excrement...from bull to bullshit. Somebody should write a book with that title.