On the seventh day, they worked, amid finance crisis

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The credit crisis in the US has also affected the weekends of employees of financial institutions.

Sunday is the new Monday. From Wall Street to Washington, the US credit crisis has claimed the leisurely weekend along with Lehman Brothers Holdings Inc and Washington Mutual Inc.

“The news cycle is ruining everyone’s weekend,” Chris Rupkey, chief financial economist for Bank of Tokyo-Mitsubishi UFJ in New York, said in an e-mail. In addition to working more at the office, he’s tethered to his BlackBerry on Saturdays and Sundays “waiting for the next shoe to drop.”

Every weekend since Labour Day, the meltdown has forced US Treasury and Federal Reserve officials, members of Congress and Wall Street executives to huddle under pressure to react before Asian markets reopened.

On Saturday, Sept 6, Treasury secretary Henry Paulson gathered with the CEOs of Fannie Mae and Freddie Mac. On Sunday, Sept 7, the government seized control of the mortgage-finance companies.

The following weekend, New York Fed president Timothy Geithner summoned Wall Street leaders to discuss the possible sale of Lehman Brothers. By Sunday night, Lehman was preparing bankruptcy papers and Merrill Lynch & Co was selling itself to Bank of America Corp. The next two weekends, government officials met in Washington to discuss a proposed $700bn bailout of the financial services industry.

The Senate approved the rescue on Oct 1 and the House of Representatives passed it Oct 3.

“Every weekend, there’s been a crisis,” said David Kotok, chief investment officer at Cumberland Advisors Inc in Vineland, New Jersey, which manages $1bn in assets.

Kotok said he had planned to spend his September weekends on a fishing boat. Instead, he’s been on his computer and phone, trying to translate details of the latest news to worried clients.

“I’ve been here the last three Sundays, and I’ll be here this Sunday,” John Silvia, chief economist at Wachovia Corp, said on Sept 26, referring to the bank’s Charlotte, North Carolina, headquarters. “A lot of people are here.”

Sundays at Wachovia were more like strategy sessions rather than actual workdays, Silvia said. He and his colleagues followed the news and came up with “what-if” scenarios, he said.

The what-if for Wachovia came on the morning of Monday, Sept 29, when the company agreed in principle to sell its consumer banking business to Citigroup Inc. The deal, triggered by Wachovia’s mounting mortgage losses, was brokered by the Federal Deposit Insurance Corp over the weekend.

Citigroup had more than 200 people “working on this nonstop” for the 72 hours before the deal was announced, Citigroup CEO Vikram Pandit said in a Sept 29 teleconference. Wells Fargo & Co said earlier this month it had agreed to buy Wachovia for $15.1bn in stock without federal assistance, ending the Citigroup deal.

Wachovia’s Silvia said he’ll be working again this weekend, studying the continued fallout from the crisis.

“It’s almost most like the bubonic plague in Europe,” Silvia said.

“It just goes from one town to the other town and you wipe out the entire population fast.”

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