Friday, February 13, 2009

Black Thursday

If you're not directly tied to the legal industry, yesterday probably felt like any other day. However, to many lawyers across the Northeast, yesterday will forever be remembered as Black Thursday. Unofficial tallies show that between 800 and maybe over 1,000 attorneys and staff were laid off at various law firms from Boston to DC.

It's unclear what prompted this move and how so many unrelated firms could coordinate a move to occur on the same day. At a time when so many in the US are suffering, I don't think anyone is going to have a pity party for some laid off lawyers, but I'll note again that like Wall Street, lawyers generate huge tax revenues for NYC and NY State. Moves like this have long-lasting budgetary impacts.

I don't feel like I've been able to accurately articulate my opposition to the bad bank proposal. So I thought I'd take another shot. With the Resolution Trust Corp of the 80's you had bad loans supported by assets that were sold at auction. It was a painful process but it had a cleansing effect. Unfortunately, the latest plan seems to be taxpayer financing for hedge funds to purchase worthless paper in an effort to support outdated valuations. Maybe something will hit the wires today that will change my mind.


1 comment:

Earthbob said...

Before the TARP Bailout I wrote our Congressman and referred to the process as "Price Fixing".

Bailing out deflated assets at their acquired cost by our Government was a giveaway at Taxpayers' expense.

Today "Toxic Assets" are being parlayed into a solution.

This in light of the imaginary derivatives and swaps that create the fog that surrounds our markets.

Looks like we will have to learn the word quadrillion.