Disbelief and Denial On "Wall Street"- Or What's Left of It

I read Dennis Berman's piece in yesterday's Wall Street Journal, entitled "On the Street, Disbelief and Resignation," with great interest, and more than a little surprise.

Berman wrote, in part,

"Inside what's left of Wall Street, investment bankers are doing all they can to cope with a business that is disappearing before their eyes. Yes, there are tens of thousands of people still with jobs. They just don't have much work. Debt and stock markets are virtually shut, merger volume is down by 28%, and whole lines of structured finance are closed for good.

This would appear a moment of natural self-reflection. Perhaps the time to consider a career move out of New York, or pursue an abandoned passion. Oddly, few of the senior bankers seemed to be able to accept the basic reality of their own profession: that an overleveraged world created an excess of bankers, too.

It is a testament to Wall Street's inherent optimism -- and exactly why the boom-and-bust cycles will continue -- that bankers remain so committed. As the Goldman banker summed it up: "People are busy. They're just not getting paid."

Here's what I don't get.

Ten, five, even a year ago, these whiz kids were supposed to be able to out-think corporate CEOs and CFOs, identify mergers, create novel financing approaches, and, generally so it was presumed, add value.

How can a group of largely kids, with a few adults riding herd on them, be so currently misguided, blind, and clueless, yet be in a position to 'assist' US companies with financial consulting and engineering?

We're dealing with global deleveraging. A serious pollution of the world's financial markets by toxic securitized waste. Credit is being retracted, or only extended in rollovers at very high rates of interest.

Underwriting is probably headed back to the stone age, since nothing glitzy will be trusted by most investors for maybe a decade. There is no 'Wall Street' anymore, simply corporate finance and M&A divisions of commercial banks.

I was around in the 1980s, when investment bankers and corporate raiders routinely merged companies, engineered leveraged buyouts, and purged hundreds, sometimes thousands of employees from the affected companies.

Guess whose turn it is now?

Thaaaat's riiiiiight! Investment bankers, M&A mavens, and traders, both buy and sell sides.

The underlying markets and demand for much of what these typically-younger, well-educated, highly-financially aspirational financial service workers are gone. Vanished. Vaporized.

Thus, so are the jobs serving those vanished markets and demands. And they likely will not ever return. Period. It is a new era. Publicly-held investment banks are gone, and will not return.

It's revealing to see how, when it is now apparent to all who understand these markets and sectors, that there has been a one-way sea change in employment opportunities and careers in investment banking and trading, these young worthies still cling to the hope that there will be a dawn following this night.

If this represents their considered business judgment, that's just another reason for the once-vibrant, overheated investment banking sector to have vanished as publicly-held companies.