Big Fat Story
Went broke short selling Volkswagen shares
German billionaire Adolf Merckle, 74, was once worth $9.2 billion, making him the 94th richest man in the world, according to Forbes magazine. He spent the last two months entrenched in negotiations with some 40 banks to raise a $6.7 billion loan after his former bankers lost faith in his ability to pay them back. A month ago he gambled a further $1 billion on the collapse of Volkswagen’s shares, but when Porsche stepped in to save the ailing car company, Merckle was literally caught short. He was portrayed in the German press as a “locust” whose rash borrowing was inflicting harm on the national economy. On Monday he wrote a farewell note to his wife saying simply, “I’m sorry,” then threw himself in front of a train, just like British banker Kirk Stephenson. Despite his wealth, Merckle was no jetsetter. He lived quietly in a village, and was an avid mountain climber whose only luxury was going on walking vacations.
Photo: Ho New / Reuters
Charlie Gasparino on “the human devastation”
Those who work on Wall Street are finding Meltdown fatalities are taking place among their close friends and colleagues. “The tragedy goes beyond the loss of jobs and wealth...I know of at least two other people who have taken their own lives because of the Wall Street Meltdown,” reports CNBC’s Charlie Gasparino. “The way things are going, I'm afraid there will be many more such incidents in the future.” Since his piece “Suicides on Wall Street” appeared on The Daily Beast, readers have inundated us with similar tales of woe as well as with unsympathetic comments about the rich deserving to lose their fortunes. Perhaps blogger GMCaesar best described the plight of money managers taking their own lives: “If you have been responsible for the losses of others—friends, family, customers—you have nowhere to go for comfort or sympathy. Your world is shattered.”
When top New York banker Rene-Thierry Magon de la Villehuchet slashed his wrists at his Manhattan desk just before Christmas, the trail of blood led straight to Bernie Madoff. The former Credit Lyonnais banker had spent most of the previous week trying to recover the $1.4 billion he had invested in Madoff’s $50 billion Ponzi scheme, to no avail. Although technically the victim of crime, Magon de la Villehuchet’s death was indirectly prompted by the Meltdown. Had the stock market not collapsed, the Madoff fraud may never have come to light. Having lived the high life for so long, wealthy bankers can find it hard to readjust to a world where they are merely rich rather than super-rich. As Alan L. Berman, executive director of the American Association of Suicidology, told the New York Times, “Sometimes, if the wealthy suffer a serious loss, they are probably not well trained or socialized to cope well with that since they’ve been successful. They haven’t had to function at a lower level.”
Photo: David X Prutting / PatrickMcMullan.com / Sipa / AP
More Crash Suicides
As in 1929, when bankers and businessmen start losing billions, they start taking their own lives. And money troubles can encourage deep, dark depression in everyone.
Mundane money troubles also take their toll
It is not just on Wall Street that money troubles are driving people to distraction. Chicago magnate Steven L. Good, CEO of one of America’s biggest real estate companies, was believed to have shot himself Monday because the housing bubble burst. In October, Karthik Rajaram, 45, of Los Angeles, shot his wife, mother-in-law, and three sons before turning the gun on himself. His suicide note said he was broke, having incurred massive losses due to the Meltdown. Dr. Mason Turner, chief of psychiatry at Kaiser Permanente’s San Francisco Medical Center, reports a fourfold increase in admissions during August, with “60 percent of patients saying financial stress contributed to their problems.” One blogger at the Huffington Post graphically described how money troubles drove her to repeatedly try to kill herself. And it is not just suicide. Debt counsellors are reporting a rise in the numbers threatening divorce, while mental health professionals warn tough that economic times lead to higher rates of depression and family violence.
Photo: California Department of Motor Vehicles / AP
An end to success causes a precipitous drop in self esteem
A hedge fund analyst came to Richard A. Friedman, psychiatry professor at Weill Cornell Medical College, complaining of anxiety. “The anxiety was expected and appropriate. He had lost a great deal of his (and others’) assets, and like the rest of us he had no idea where the bottom was,” writes Friedman. “I would have been worried if he hadn’t been anxious.” Then, his anxiety suppressed by drugs, the patient returned. “I’m over the anxiety, but now I feel like a loser,” he said. The doctor concluded that “his sense of success and accomplishment was intimately tied to his financial status. He did not know how to feel competent or good about himself without this external measure of his value.” Or, as another patient put it, rather more succinctly, “I used to be a master-of-the-universe kind of guy, but this cut me down to size.” Friedman concludes that depressed traders cannot win. “On Wall Street...a rising tide lifts many boats and vice versa, which means that there are many people who succeed—or fail—through no merit or fault of their own.” And while they imagined—or were encouraged to think—they were masters of the universe, the poor saps were impotent slaves to the system all along.
Comedian Eddie Cantor, who lost a fortune in the 1929 Crash, turned his misfortune into a routine. “Nowadays, when a man walks into a hotel and requests a room on the 19th floor, the clerk asks him: ‘For sleeping or jumping?’. . . Personally, I shouldn't worry about my stocks. I know my broker is going to carry me. Yes, sir. He and three other pallbearers.” Comic Will Rogers joined in. "When Wall Street took that tailspin, you had to stand in line to get a window to jump out of,” he joked, “and speculators were selling space for bodies in the East River.” Although historian J.K.Galbraith played down the 1929 Crash suicides, there are plenty of examples of bankers who jumped rather than face penury. Winston Churchill, staying at the Plaza, even witnessed one. “Under my very window a gentleman cast himself down 15 storeys and was dashed to pieces, causing a wild commotion and the arrival of the fire brigade,” he wrote.
Photo: NBC Universal / AP
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Just reaffirms the old adage: money can't buy you happiness. My condolences go out to those famililes who've lost someone to suicide.
I remember reading years ago that more people committed suicide because of financial devastation than for any other reason. I guess I just never expected to see a collapse of this magnitude in my lifetime. Let's hope that this year will at least see us on the path to a reversal.
A recent blog on Reuters stated the following:
Charlie Gasparino at the Daily Beast writes that his death is seemingly a tragic trend that "underscores the tragic personal cost of the financial meltdown."
While the pressure of his job and the deep impact of the crisis may be an obvious motive, Megan McArdle from The Atlantic writes that "you don't commit suicide because you're mad at regulators. You commit suicide because you have deep mental health issues."
I think Gasparino has a lot more insight than the gal from The Atlantic who may have read one too many psycho babble books. The realization that the system that you have spent your life in, helped create and believed in is a fraud is a pretty big hit for most people to take, especially a 41 year old who has lived his life in the "success" bubble. The crap that success and money is merely the result of hard work and talent is a myth that those in positions of power believe to put them selves above the rest of us "failures". The bottom line is if your first boss had decided to "take you out" rather then promote you, you would be in the failure bubble instead of the success bubble. This has a lot more to do with your inability to see a lot of stuff and your ability to "play the game". Talent is not really the issue. Add the realization that all was never as it appeared; fraud, corruption and malfeasence have always been part of the system, and most but the most cynical find it overwhelming. Add a highly public position and a crumbling way of life and death is often considered. The Great Depression saw men jumping from buildings.....
It takes unbelievable forititute and moral strength to turn your back on "Social Values".To say Fuck You to the world and refuse to play societies' games. It is HARD and results in social ostracisim. It is also hard to pay for misdeeds previously thought of as " OK for our kind of people".
Attorneys learn early you have to sell a little part of your soul as you advance. I was an attorney. Law Review no less. I have permanently retired. My soul and family was a little more important than career advancement or social recognition. I am 45. And no pension or trust fund supports me. I do not qualify for benefits.
This guy's realization that his life, mentors, and the system were a sham most likely led to his death. Ms McArdle
may want to explore this side of "mental illness" before she makes such sweeping statements.
As a side note, I send my children to religious schools in hope that when they realize what their world is really like, faith or at least a strong religious background stops them from putting a gun to their head.
No do not say I need counseling- Been there done that.I just found out at 32 what most find out in their 50's and 60s. Last shrink, a 90 year old Irishman finally set me free. Officially not crazy, just a highly intelligent woman who can actually see the world and her community for what it really is, not what is portrsays its self to be. Not something most people can handle.
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