Plunge in markets brings another kind of depression

By Denise Gellene - Los Angeles Times

October 8, 2008

Porter Ranch murder-suicide is an extreme example of the stresses gripping the American psyche, experts say. Mental health professionals say referrals have soared.

A Porter Ranch man who murdered his family and killed himself last weekend as he faced financial ruin is the latest and most extreme case of a wave of distress washing over the American psyche.

Karthik Rajaram, an unemployed financial advisor, left a suicide note saying that his financial state left him few options but to kill his wife, three children and mother-in-law. Los Angeles Deputy Police Chief Michel Moore described Rajaram, 45, as a man stuck in a rabbit hole of despair.

The tragic case of the Rajaram family is at the bleakest edge of the economic turmoil that is rattling Americans' emotional well-being. Worries about home foreclosures, job losses and plunging stock prices have sparked a surge in mental health problems.

"The closest I have seen to this in the last 10 to 20 years is the spike after 9/11," said Richard Chaifetz, chief executive of ComPsych Corp., a Chicago-based company that coordinates mental health referrals for employers. "But this is more geographically dispersed and is not going to get better in a month."

Rich Paul, a vice president at Virginia-based ValueOptions Inc., which also handles mental health referrals, said that calls about stress related to foreclosure and financial hardship have gone up 200% in California in the last year.

At Kaiser Permanente's San Francisco Medical Center, Dr. Mason Turner, chief of psychiatry, said there was a fourfold increase in psychiatric admissions at his hospital during August, with roughly 60% of patients saying financial stress contributed to their problems.

In Stockton, the epicenter of California's home foreclosure crisis, mental health counselor Victoria Tabios said that more than a third of her cases revolve around foreclosures. Inevitably, problems spill into other parts of family life.

"They are falling behind on their house payments because of bad loans, so they begin fighting and blaming each other. Some resort to drinking," she said. "It's a domino effect."

By comparison, some people experience relatively minor symptoms -- fatigue, headaches and lack of motivation. The problems can gradually wear down a person as the economic turmoil continues.

"I'm so drained, I feel like a need a B-12 shot every 15 minutes," said glass artist Darin Jackson, 44, whose Moreno Valley neighborhood is pocked with foreclosed homes.

For others, like, Rajaram, the financial pressures can seem like an inescapable pit.

What drove him over the edge to total despair is a mystery. By all accounts, he had enjoyed a successful career as an investor in start-up companies before running into an economic crisis that led him to a violent end.

Rajaram, his wife, 39, his 69-year-old mother-in-law, and three sons, ages 7, 12 and 19, appeared to be a typical suburban family, although one former business associate said that "he had some behavioral problems. . . . He was not an emotionally stable person."

Police found no obvious foreclosure looming in Rajaram's future and no bankruptcy. But one investigator familiar with the case said Rajaram "lost a lot of money in the markets."

"We know he believed he had no options," Police Capt. Sean Kane said. "It is a shame he believed that, because he clearly had options."

Rates of depression and suicide tend to rise during hard economic times. A study that looked at economic shifts between 1972 and 1991 found suicides rose an average of 2% when the economy faltered.

Depressed over their financial situation, people often begin to isolate themselves from family and friends, setting themselves on a downward spiral, Turner said. Cut off from a support network they so desperately need, they sink into hopelessness.

But suicides are rare. More common is a nagging sense of unease that begins to disrupt work and personal relationships, and makes problems in other areas seem worse.

The early signs, such as insomnia, sadness, irritability and intestinal problems, can be subtle and easily missed by family members or friends.

A survey released by the American Psychological Assn. on Tuesday found that eight of 10 Americans say the economy is a major source of stress in their lives. Nearly half say they are worried about providing for their families' basic needs.

"If a person feels stressed about one thing they feel stressed about everything. It's a snowball effect," said Santa Monica psychologist and American Psychological Assn. representative Elaine Rodino.

The study was conducted before the last big declines in the stock market, and Rodino is certain the figures have gone up even further.

The economic turmoil has affected not only those who lost their homes or jobs, but also broad swath of the American economy that is dependent on investments for their families' future. This week, the Dow Jones industrial average sank to its lowest point in five years.

The economy "is an equal opportunity stress agent," Long Beach psychologist Jana Martin said. "It's touching people from all walks of life."

At a certain point of financial loss, even small expenses can balloon into crushing burdens. Martin said one patient, a teacher, was depressed about making a career change because she could no longer afford the gasoline for her 35-mile commute.

Another patient, a small-business owner, felt like a failure because she had to lay off employees.

Jackson of Moreno Valley said cheap pleasures like walks in the park or board games have become painful because they remind him that his family can't afford to do much else. "You can only play so many games of Scrabble," he said.

Unlike many emotional troubles, patients' depression is so connected to their financial state that mental health professionals say they must also tackle patients' money problems. Kaiser Permanente's Turner said some patients are so debilitated that he must take on the role of financial coach.

In some cases, he has helped patients apply online for mortgage refinancings during counseling sessions.

"These people are so depressed they just throw up their hands. They can't do anything, and problems pile up," he said. "They don't realize that if they fill out one piece of paper or make one phone call they could avoid some of these negative outcomes."

Even for those who manage to dig themselves out of trouble, the psychological effects of the downturn could be lasting.

"If they translate the financial crisis as personal failure, it could have long-term consequences. If they feel there is no need to try very hard they will lower expectations of themselves," Martin said.

After a decade of easy money and soaring housing prices, the bursting economic bubble has been hard for many people to face.

For immigrant strivers intoxicated with the American dream, the blow is particularly hard.

Rajaram was part of a model minority community that has achieved the American Dream in less time than almost any other wave of immigrants, said Lakshmy Parameswaran, a family counselor and founder of Houston based DAYA Inc., an organization that help South Asian victims of domestic violence. With that success comes incredible expectations and pressure.

"There is a constant pressure to make good and for one to show to those back home you are living the American Dream," she said. "There is a lot of pressure to have it all."

A few weeks ago, the family seemed relaxed and happy at a party in Beverly Hills, recalled a friend, Uma Rajaram of Tustin.

"I don't think any of their close friends even know what is going on," said the woman, who is not related to the family. People don't talk much about finances, she said. "It's the culture you grow up with."

Losses Mount, Fears Overwhelm, and a Life-Ending Decision Is Made

By Landon Thomas Jr. - The New York Times

November 6, 2008

Walter Buczynski was a top executive at a Maryland mortgage lender before he killed his wife and jumped off a bridge last January.

K. Upender was a distraught stock speculator in India who suffered steep losses in the Indian stock market this fall, according to the police, just before he chose to open the gas line in his house, light a match and kill himself, his wife and his 2-year-old son.

Mr. Buczynski, 59, who lived in an affluent suburb in New Jersey and made close to $330,000 in 2007, and Mr. Upender, a 32-year-old former stock broker who had taken to trading stocks out of his home in Hyderabad, a fast-growing city in central India, were worlds apart.

What they had in common was a livelihood in the financial industry, a wrenching downturn in that industry and death by their own hands.

The reason for a suicide, particularly one that also involves homicide, is never cut and dried. Mr. Buczynski, for example, left a note saying that problems with his marriage caused him to kill himself and his wife.

Although there are no hard statistics yet to show an increase in suicides related to the financial crisis, anecdotal reports are coming from around the globe.

As markets continue to tumble worldwide, with the prospect of a deep global recession to follow, some experts predict suicide could increase as those who once enjoyed the fruits of a global asset boom watch their fortunes evaporate in the broadest and most abrupt destruction of wealth since the great crash of 1929.

Suicide reports have come from a wide variety of places, involving a diverse range of people. A chief executive of an Arizona-based commercial lender wore a tuxedo, swallowed pills and lay down to die in June as his company collapsed. A suburban stock broker in Connecticut jumped from an 11th-story window in July; a private equity financier based in London leapt in front of a train in August.

And last month, a onetime dot-com millionaire shot five family members and himself in an upscale neighborhood in Los Angeles, blaming the financial crisis for his woes.

Those deaths are the most extreme manifestations of a wider mental health challenge presented by the economic malaise.

“The majority of the calls I am getting now are from people overly stressed over their finances,” said Daniel J. Reidenberg, a psychologist and the executive director of SAVE, a Minneapolis-based suicide prevention organization. “And I have talked to business executives as well as people who have just lost their jobs. The severity of the credit crunch is causing people to engage in more extreme behavior.”

While stories of financial executives jumping from tall buildings on Wall Street during the 1929 crash have long been part of the popular lore, experts and academics say there were only a few instances of such behavior as the market plunged.

Most of that era’s suicides came in the years after the crash as the Great Depression gathered steam.

“My research showed that a lot of people committed suicide in the privacy of their own homes as their fortunes and reputations were depleted,” said Selwyn Parker, the author of “The Great Crash.” “It happened all over the world — in New York, the bushes of Australia, Germany and Austria.”

In fact, the highest suicide rate recorded in the United States was 17 out of 100,000 people in 1932, when unemployment peaked at 25 percent. That compares with 11 out of 100,000 people in 2005, the most recent year for which data is available. The reported total in 2005 was 32,637.

Anecdotally, it would seem that more finance-related suicides stem from people losing their homes in foreclosures. However, the smaller cluster of executives who have taken their lives suggests that the global collapse of asset values has been enough to persuade some people of means and high position that their lives were without hope.

Steven Stack, a leading researcher of suicide trends at Wayne State University, said that Emile Durkheim, the French sociologist, reached a conclusion more than 100 years ago that holds true today. “His argument was that those who are the highest suicide risk are those with the greatest fortunes who lose the most and have the furthest to fall,” Mr. Stack said.

Scott Coles, the 48-year-old chief executive of Mortgages Inc., an aggressive lender to some of Arizona’s largest commercial development projects, experienced that kind of precipitous downturn.

He became a multimillionaire by signing off on large commercial loans that were financed by high-yielding mortgage investments — a business strategy that resulted in the collapse of his company and of his prominent reputation.

The police ruled his death in June a suicide, and his company filed for bankruptcy later that month.

At 82, Edwin Rachleff was nearing the end of his long career as a broker, most recently running A. G. Edwards’s New London branch in Connecticut. He was a pillar of his local community and had been married to his wife of 60 years.

But on July 28, one of his main clients, the $12 million New London Security Federal Credit Union, was declared insolvent by regulators and shut down. That day, he leapt to his death from the 11th floor of a building.

Investigators are examining his ties to the defunct credit union.

Mr. Rachleff left no note, but he was said to be upset over his worsening eyesight and the possibility that he might lose his broker’s license.

When Kirk Stephenson, 47, jumped in front of the morning commuter train that would have taken him from his country home to his office in London, he left no note either.

Friends and family were in shock, as there were no evident signs of distress from Mr. Stephenson, who was married and had an 8-year-old son.

While no public explanation has been given, his death came in late September, as Olivant, the small investment company where he worked as chief operating officer, was confronted with the news that substantial assets it held at Lehman Brothers would not be recovered anytime soon because of the investment bank’s bankruptcy.

Karthik Rajaram, 45, who had founded an Internet business incubator, was an out-of-work investor living in an upscale Los Angeles neighborhood when he fatally shot his three children, wife and mother-in-law before turning the gun on himself in early October. In a letter addressed to the police found at the site of the shootings, Mr. Rajaram blamed economic hardships for his actions.

Although research is scant, M. Harvey Brenner, a professor at the Johns Hopkins School of Public Health in Baltimore, says that at higher income levels, those suffering financial distress will on occasion lash out at those closest to them.

“If these people are not alive,” Mr. Brenner said, “they will not be in a position to rebuke the head of household or suffer further embarrassment.”