Job Losses Mount on Wall Street

According to Bloomberg:

Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months, the most since the dot-com boom fizzled in 2001.

Citigroup Inc., Lehman Brothers Holdings Inc. and Morgan Stanley are among the firms that have disclosed headcount reductions so far.

After the Internet bubble burst, 39,800 jobs were eliminated during the same period; the number climbed to 90,000 in the next two years, according to the Securities Industry and Financial Markets Association.

Lehman's home-loan unit, BNC Mortgage LLC, employed 1,600 people before the firm closed it down in August. Mortgage lender First Franklin Financial had 2,300 employees when it was acquired by Merrill Lynch & Co. in January 2007. Merrill shuttered the business this month. All told, at least 100 mortgage companies have suspended operations, closed or been sold since the start of 2007.

It's been widely speculated that when the dust finally settles, Banks will end up losing $700 Billion dollars in this subprime mortgage fiasco. If that happens, wall street will lose over 100,000 jobs!

Bear Stearns Biggest Loser

Joseph Lewis, the billionaire investor who bought 9.4 percent of Bear Stearns Cos. last year, lost $1.16 billion on his stake after the firm agreed to sell itself to JPMorgan Chase & Co. yesterday for $2 a share.

Lewis, the New York-based firm's second-largest holder, paid an average of about $107 apiece for 11 million shares, according to a filing submitted last year to the U.S. Securities and Exchange Commission. Bear's biggest investor at year-end was money manager Barrow Hanley Mewhinney & Strauss Inc., whose 9.7 percent holding has fallen by $991 million.

Mutual funds run by investment bank Morgan Stanley were the third-largest Bear Stearns holder with a 5.4 percent stake and may have lost about $546 million since Dec. 31. James Cayne, Bear's former chief executive officer and fourth-largest holder with a 4.9 percent stake, saw the value of his holding drop by $504 million.
Bear's fifth-largest shareholder, Baltimore-based Legg Mason Capital Management, a unit of Legg Mason Inc. run by Bill Miller, may be down $493 million.

Still No Inflation?

NYT reports that government figures, released Friday, showed that grocery costs had jumped 5.1 percent in 12 months, the latest in a string of increases. In fact, the nation is undergoing its worst grocery inflation since the early 1990s.

With a few exceptions, nearly every grocery category measured by the Labor Department, which compiles the official inflation numbers, has increased in the last year. Milk is up 17 percent, as are dried beans, peas and lentils. Cheese is up 15 percent, rice and pasta 13 percent, and bread 12 percent.

No food product has gone up as much as eggs, jumping 25 percent since February 2007 and 62 percent in the last two years.

"It's a great time to be an egg farmer," said Paul Sauder, a third-generation farmer in Lititz, Pa. His farm ships eggs to food service customers and grocery stores, including Stop & Shop. "We've never encountered this kind of run like we've had right now."