New Yorkers reeling from Wall Street crisis

James Berkeley flew off the handle Wednesday afternoon when he saw the price of Washington Mutual, a stock he owns, plunge to 2 dollars, which means 40 percent of his capital has evaporated.

In August, Berkeley, who works for a consultancy company in New York, told his friends that it was high time to buy American stocks in the financial sector as he believed they had reached a trading bottom. He bought 10,000 shares of Washington Mutual, the largest savings and loan association in the United States, at 5 dollars. However, things became worse and worse with each passing day. He had been hoping for a sharp rebound, but reality failed him.

Berkeley got infuriated Wednesday at the closing bell. He said his feelings were mixed these days — puzzled, angry and shocked, while trying to figure out what was really wrong with the U.S. financial sector.

“They took away the regulations, they thought they could do anything,” a lady in her 70s said while passing by the building of Lehman Brothers Holdings Inc., located in midtown of Manhattan, Tuesday afternoon.

“They (financial institutions) extended loans to the people who were not eligible for the loans,” she said, adding that it was the key factor causing the current financial crisis.

On Monday morning, in one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself Sunday to Bank of America for roughly 50 billion dollars to avert a deepening financial crisis, while Lehman Brothers filed for bankruptcy protection and hurtled toward liquidation after it failed to find a buyer. On the same day, The Wall Street Journal and The New York Times reported that insurance giant American International Group (AIG), staggered by losses stemming from the credit crisis, was seeking an additional 40 billion dollars in emergency funds from the Federal Reserve, without which the company may have only days to survive.

As a result, the Dow lost 504 points Monday and shed another 449 points in its second worst session of the year, as the government’s emergency rescue of AIG amplified fears about the stability of financial markets. With a cigarette in his right hand, a young employee who refused to disclose his name, was walking back and forth in front of the Lehman building, putting on a solemn face.

Blowing smoke rings in the air once in a while, he looked in perplexity at reporters, mobile control rooms and passers-by who were taking photos of the building of Lehman, a name that has become part of Americans’ life. “Why did you come today?” a journalist asked him. “I still have some job here, but possibility is there that I might not come very soon,” he answered.

“Where do you want to go?” the journalist asked again. “Financial institutions in New York are cutting jobs, don’t know yet.” With that being said, the young man extinguished the cigarette and refused to say anything. Peter Tuckman, a trader working at New York Stock Exchange, said he had already been numbed by the constant bad news from the financial sector.

New York, Xinhua