NEW YORK (AP) -- Steve Levy left Lehman Brothers in 2005 but called his former secretary there on Monday to offer his support. She burst into tears after answering the phone.
She wasn't the only one.
The financial hurricane that whipped through Wall Street Monday suddenly made the Street, long a source of fabulous wealth, look uncertain and scary. In New York, where a half-million people work in finance, nearly everyone was shaken, from hedge fund billionaires to secretaries from Queens.
Lehman, the No.4 investment bank in the U.S., filed for Chapter 11 bankruptcy reorganization Monday, the same day Merrill Lynch was bought by Bank of America Corp. in a snap deal for roughly $50 billion. Meanwhile, American International Group Inc., the world's largest insurer, and Washington Mutual Inc., the nation's largest thrift bank, were rumored to be close to ruin.
"How did this mess get so big?" said Levy, who worked at Lehman Brothers Holding Inc. for seven years before leaving in 2005.
As groups of grim-faced employees walked into Lehman's million-square-foot headquarters on Seventh Avenue -- many of the men wearing Lehman-green ties and the women in green shirts -- the consensus in finance was that this would just be one more in a succession of grim days following the mortgage bust.
"It's like a bad flu," said Steve Schlussler, a director at CapitalSource, a small financial firm near Lehman. "You have to get violently ill to get better."
"The Fed can't bail everyone out," he said.
Stocks tumbled, but not as sharply as feared. Analysts had sent notes to clients Sunday night reminding them of the magnitude of losses that could occur before trading was halted on the New York Stock Exchange. The first of such "circuit breakers" kicks in when the Dow Jones industrial average loses 1,300 points before 2 p.m. By midday Monday, the Dow had lost 283.67, falling 2.5 percent to 11,138.
"I haven't gotten any real panic phone calls," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc. "Stocks aren't capitulating."
For workers, the year has brought waves of layoffs -- some announced cuts of thousands of jobs, some quieter culling of hundreds. Wall Street firms have slashed the ranks of contractors and hacked at expenses like car service and business travel. Now, the roughly 25,000 workers at Lehman, as well as many of the 60,000 at Merrill, are likely to be hunting for new work.
Bad times in finance mean bad times in New York City, because the sector is an outsized proportion of the city's total payroll.
