I can’t resist saying something about this whole Bear Stearns thing. One aspect that keeps popping up in media reports on it is the effect that this will have on the firm’s employees (potential lawsuits aside). I wonder if people fully appreciate the risk they are taking by tying not only their income but also much of their wealth to a single firm. Incentive contracts are generally a good idea to encourage performance, but so is diversification (of wealth, if not income).

It’s worth thinking about for a moment — how would it affect you if your current employer imploded tomorrow?