In thinking about the massive layoffs set to ripple through U.S. financial markets, not to mention the layoffs we've already seen, I went back and checked the latest securities industry employment data. Here it is, monthly back to 2000, followed by annual back to 1992.

Any bets on how long it takes to get back to current (peak) levels?

On a related note, Oppenheimer analyst Meredith Whitney recently pointed out in a note that i-banking revenue was down 63% in the first half of 2008, while expenses (most of which is compensation) was cut by just 10% during that period. In other words, we are set for a tsunami of exits.

[via SIFMA]

In case anyone's curious, it's been a hotbed of activity over at the Lehman page on Wikipedia. While we haven't seen a repeat of last week's attempted malfeasance, we have seen 36 edits to the page today (Monday), and we saw 48 page edits on both Saturday and Sunday of this weekend.

Since midnight Sunday, the edits have been coming it at almost 1 a minute: It's darn hard to get things straight when the facts keeps changing out from under you.

Speaking of which, I see that some helpful sort briefly changed the verb tense on the Merrill Lynch Wikipedia page. The BofA bought broker went from "... is a global financial services firm..." to "...was a global financial services firm..." Ah, the ignominy of it all, to be wiped out so unceremoniously.

Well that's it then. Lehman has now filed for bankruptcy, or at least its holding company has. As one European Bank official said somewhat plaintively to the Wall Street Journal as he looked to tomorrow's trading, "We are in the hands of the Americans". Indeed we are.

Interestingly, at almost the same time as that crossed the wire, making it official, the BofA/Merrill tie-up crossed too. Calling the combined outfit a "unique financial services firm", however, strikes me as praising it with faint damns. Nevertheless, BofA expects the deal to close in the first half of 2009, and there is no mention of break fees/terms.

[Update] Speaking of Merrill, Dealbook over at the NYT points out something interesting. With this deal, Merrill CEO John Thain's employment contract change of control clause will be triggered, and he will exit Merrill after merely ten months on the job with $25-million in total compensation.

That's impressive enough, but it's doubly so when you consider he got packaged out of the NYSE with just shy of $20-million not quite a year ago. Apparently Thain has turned executive exits into a business model.

Given today's news, expect a major round of the good old "Blame the short-sellers" game to commence. Louise Story's one-sided piece in today's NY Times is a good example of something we are likely to see more of as financial firms hunt for fall-out shelters during the current atomic blasts in equity markets.

What's my beef about Story's piece? It's that she only tells one part of the story, and when she pretends to tell the other side -- why short-sellers aren't necessarily, always, maybe so bad -- she hedges, ahems and clears her throat so much that you forget what it is she's trying to say.

Check the mischief and speciousness in the following quotes:

• "Short sellers and their free market supporters say they have done nothing wrong."
• "While Lehman’s shares have declined as investors lost confidence in its ability to repair its balance sheet, in the four months after Mr. Einhorn’s remarks, short-selling played a role in the [Lehman] erosion."
• "Short-selling against financial institutions has proved particularly lucrative for hedge funds. "
• "[Stock shorting] has become particularly controversial in the last year, when Wall Street firms started to be singled out as the credit crisis turned the financial sector upside down."

To summarize, short-selling is fine as long as you lose money doing it, never bet against sectors that are doing poorly, never bet against companies with weak balance sheets, and generally keep those damn "free market" supporters from returning press calls.

Thanks for the advice, Louise. Yeesh.

[via NYT]

As I alluded to last night, I'm out for most of the day today. My early impression of today's opening is that it's about as expected: Markets think this is bad, but not horrible, and they are trading sharply but not disastrously down. Rumors are helping, including the usual "Warren Buffett will help!" are being yanked out, like Linus's security blanket, so I refuse to take much of the non-price chatter seriously.

My take: As usual, the initial reaction to major financial market events, while interesting, is more emotional than substantive. Untangling the consequences of today's once-in-a-lifetime unraveling will only be seen over the coming weeks and months. We have insidiously complex and interconnected markets, and the old days of being able to readily detect all the co-moving parts are long gone.