Merrill Lynch’s stock price plummeted by two thirds in a mere three months—not as severe, and certainly not as enduring, as the 92 percent loss from top to bottom in Long-Term’s equity, but astonishing nonetheless. Komansky and Allison had taken such pride in shielding Merrill from proprietary trading, but Merrill’s bond traders lost close to a billion dollars all the same. Suddenly anxious that Merrill’s own credit rating would come under pressure, Merrill, led by Allison, aggressively cut costs and fired 3,500 people, largely in the bond department. By mid-October, not only was Long-Term
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