The Dow took a big hit today during the last two hours of trading, falling nearly 700 points or about 7 percent to finish below the 8,600 mark. This, of course, is not a good sign, especially since the sharp decline came on the same day as a slew of government announcements here and abroad (such as Hank Paulson’s plan to buy stakes in banks) that were supposed to improve investor confidence, not hammer it away.
Yet again, several big banks' stock prices took dives today, particularly Morgan Stanley, whose shares fell drastically on rumors that Mitsubishi UFJ Financial Group may not pony up $9 billion to invest in the bank after all (as it did yesterday, Morgan denied the rumors, saying the deal is on track, which investors apparently weren’t buying). Speaking of rumors, looks like National City might be on the auction block, so yet another large bank could soon change hands.
Although the market plunge today means common perception here in the U.S. is perhaps even the staffs of state can't help us now, let's not start stock piling tap water just yet; time will tell whether the second coming of the Great Depression is for real, or just perception. That said, as we wait to see who’s holding the high card, it’s probably a good idea to be cautious with our cash.
To that end, below you’ll find some ideas on how to scale back your spending, inspired by the changes being made by a bunch of out-of-work employees who used to work for a handful of companies that, up until a few weeks ago, were widely known as the investment banking bulge bracket. Indeed, that was then, and this is now ...
Then: Black car to Luger's
Now: J train to White Castle
Then: Courtside seats at the Garden
Now: Bleacher seats at P.S. 46
Then: Lap dances at Scores
Now: Brushing up against rush-hour commuters
Then: Dining at Nobu
Now: Fishing in Red Hook
Then: Shopping at Dean & Deluca
Now: Joining the Park Slope Co-Op
Then: Range Rover to East Hampton
Now: The A to Rockaway
Then: Hair by Fred (Fekkai)
Now: Hair like Ted (Kaczynzki)
Then: Long weekends in the Cayman Islands
Now: Afternoons in Coney Island
Then: The Amex Black card
Now: The Starbucks gift card
Then: Liar's Poker
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