Living dangerously: Diary of an ABS Professional, Week 20

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In which Mr ABS sees his friends being picked off one by one.

Last week was cardboard boxes week.

I had lunch with a friend who has been at Merrill for a few years. His morale was rather low as he had been told that there would be job cuts on his floor.

At least he heard it from his management, not the press. Top management is often keen to leak the news to the press, hoping that it will have a positive impact on their beleaguered shares. Informing the lower ranks is all too often overlooked as a priority. One day later the news was in all the newspapers, but from an employee's perspective it does make a difference.

He was told he should be spared, but in any case he's planning to put all his stuff into just one box. It sounds difficult to reduce several years of career at the same shop to the contents of a box, but he is adamant that he will. His rationale is that if he is going down, there is no way he will find a job in the same industry, so he doesn't need to take anything with him.

I admire his decision not to hang on to anything he has done so far. Unlike him I had about 14 boxes of stuff sent home by my team PA just after my boss was axed. Half of those were full of books that I kept at work as I used to live in a cramped flat. The remainder were jammed full of sheer junk: OCs, presale reports and my favourite tombstones. I have now binned them all and kept only one which is truncated and has been recycled as a door stop.

My Merrill friend had some harsh words for his former colleagues from the CDO team who were made redundant a few months ago. He used to work in a rating agency and, according to him, none of the analysts in the RMBS, CMBS, ABCP or whole business teams could understand the methodology of their CDO colleagues. This explains a great deal about the current state of the market.

I hope my friend will be spared: he has two children and a significant mortgage.

Citibank announced further losses and job cuts to follow. I might soon not know anyone left there. I had some good mates in their CDO team, but they are long gone now.

The Government's plan to inject 50bn of liquidity through the BoE is a welcome one. It's a shame it didn't materialise sooner; perhaps Alistair was just too busy increasing the tax burden on the poor.

At least support for the Government is falling - they may yet need the backing of the unemployed banker constituency. Subsidising cardboard boxes would be a start.

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