On Wall Street, employees brace for next disaster

By Aarthi Sivaraman

NEW YORK (Reuters) - Who's next? Hours after the U.S. Federal Reserve threw an $85 billion lifeline to American International Group Inc, Wall Street workers took little comfort from the massive rescue and instead tried to guess who would get swept away next.

Even staff at Goldman Sachs Group Inc, among the few investment banks largely unscathed by the credit crisis, signaled fear as the firm's stock plunged.

"We're all in this together," said one Goldman employee who has been with the firm for six years and currently works in its asset management unit. She declined to give her name.

"We are still concerned since we work on Wall Street. We are not secure. Nobody is secure."

Such worries had already gripped investors, who slaughtered the shares of Goldman Sachs and Morgan Stanley, who are seen as the next possible victims of a financial industry crisis after AIG was bailed out and Lehman Brothers Holdings Inc filed for bankruptcy protection.

Goldman, which made billions of dollars last year with a timely bet the housing crisis was going to worsen, fell as much as 26 percent. Morgan Stanley took a 42 percent hit.

Instead of quelling concerns, the AIG rescue seemed to have ignited fears that more bad news is to come.

At stake for tens of thousands of Wall Street employees are highly-paying jobs that help prop up New York City and the wider U.S. economy, as well as billions of dollars in personal stock wealth and bonuses that may be erased.

Across from AIG's office near Wall Street, Deutsche Bank AG employees were also fearful of a financial tsunami.

"I have not read much about us in the papers, but that makes me nervous," said one Deutsche staffer, who said she had just returned from vacation.

"I only heard all these things about AIG from last week," she added, pointing out how the global insurance giant's status seemed to have evaporated overnight.

Still, some Deutsche employees said the firm may not be in the direct line of fire.

"We are solid. We don't fool around with mortgages and double mortgages," said Juan, a Deutsche Bank employee for 14 years, who said he knew people at AIG. He declined to give his last name.

WHY AIG?

The consensus among many Wall Street workers was that the Fed was right in jumping to AIG's rescue.