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The end of wall street

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The end of wall street [#permalink] New post 25 Nov 2008, 15:47
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Not sure if this has already been posted. If it has, it's worth reading twice:

http://www.portfolio.com/news-markets/n ... reets-Boom
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Re: The end of wall street [#permalink] New post 25 Nov 2008, 17:07
Wow! Great article. I don't know much about finance, but the article explains it pretty well.

I love this quote:

Quote:
His dinner companion in Las Vegas ran a fund of about $15 billion and
managed C.D.O.'s backed by the BBB tranche of a mortgage bond, or as Eisman
puts it, "the equivalent of three levels of dog s#$t lower than the original
bonds."


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Re: The end of wall street [#permalink] New post 25 Nov 2008, 17:14
I think the article is a little doomsday. He is probably looking to sell some more books.
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Re: The end of wall street [#permalink] New post 25 Nov 2008, 17:51
terp26 wrote:
I think the article is a little doomsday. He is probably looking to sell some more books.


Doomsday? He is pretty much just recounting things that have already happened. I didn't see a whole lot of doom-and-gloom predictions, just mainly that the days of making a ton of money by selling crappy mortgages are over.

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Re: The end of wall street [#permalink] New post 25 Nov 2008, 18:13
This is supposed to be a really good article. That said, the length of it has always scared me away so far. Maybe I'll print it out before my flight home for Thanksgiving.

Michael Lewis is supposed to be coming out with a new book with a similar theme - "The End".
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Re: The end of wall street [#permalink] New post 26 Nov 2008, 00:20
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i didn't read the full article.. so take what i say with a grain of salt. (the 9 pages scared me too agold)

while there's really terrible stuff happening, and likely more ahead... i think predictions that wall street as a concept is dead are ridiculous. bankers aren't going anywhere. things will adjust.. lessons will be learned... but financiers will always be needed. Perhaps we won't be as leveraged... and securities wont be as exotic, but the core functionality is still important.

the guy's been saying the same thing over and over again for the past 20 years.
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Re: The end of wall street [#permalink] New post 26 Nov 2008, 06:36
egy wrote:
i didn't read the full article.. so take what i say with a grain of salt. (the 9 pages scared me too agold)

while there's really terrible stuff happening, and likely more ahead... i think predictions that wall street as a concept is dead are ridiculous. bankers aren't going anywhere. things will adjust.. lessons will be learned... but financiers will always be needed. Perhaps we won't be as leveraged... and securities wont be as exotic, but the core functionality is still important.

the guy's been saying the same thing over and over again for the past 20 years.


Agreed. The advisory services and investment banking divisions are not going anywhere. Sales & Trading is due for a radical overhaul, but that has only been a recent phenomenom. Back in the 1980s, a majority of the big banks revenues came from advisory services. Over the past few years, they have come from S&T and these wild bets on the markets. It is bound to revert back to the old system.
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Re: The end of wall street [#permalink] New post 26 Nov 2008, 06:55
agold wrote:
egy wrote:
i didn't read the full article.. so take what i say with a grain of salt. (the 9 pages scared me too agold)

while there's really terrible stuff happening, and likely more ahead... i think predictions that wall street as a concept is dead are ridiculous. bankers aren't going anywhere. things will adjust.. lessons will be learned... but financiers will always be needed. Perhaps we won't be as leveraged... and securities wont be as exotic, but the core functionality is still important.

the guy's been saying the same thing over and over again for the past 20 years.


Agreed. The advisory services and investment banking divisions are not going anywhere. Sales & Trading is due for a radical overhaul, but that has only been a recent phenomenom. Back in the 1980s, a majority of the big banks revenues came from advisory services. Over the past few years, they have come from S&T and these wild bets on the markets. It is bound to revert back to the old system.


Wall Street isn't going anywhere, but there will be much fewer bankers (and positions for mba and undergrad students) at least for a few years. I agree parts of S&T such as prop trading will be reduced if not eliminated, but basic market making will not go away. Even now, spreads are much wider due to low liquidity.
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Re: The end of wall street [#permalink] New post 26 Nov 2008, 07:28
Wall St will reinvent itself over and over again and they will be the cause of at least one financial crisis every decade.

For example, didn't they predict death of Wall St last time they had junk bond scams and savings & loans crisis?

Sure, some new regulations passed but Wall St found new profit centers......and came Tech Bubble of the 90's .....where Wall St encouraged any tech startup to go for IPO whether startup made money or not (or even had sound business model)......
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Re: The end of wall street [#permalink] New post 26 Nov 2008, 09:25
The pages aren't very long, Agold, so don't let that scare you off.

One interesting fact the article noted was that the banks are less careful than they were in the early 80's because they are all public. Therefore, any losses ultimately fall on the shareholders, and now more recently, on the government. A partnership or closely -held company would never leverage itself so much because the decision makers would ultimately be (at least partially) responsible for the losses
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Re: The end of wall street [#permalink] New post 26 Nov 2008, 17:37
I think that we are far away from the end of wall street... but time will tell.

In 4 or 5 years Goldman executives will be making $50 million again.
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Re: The end of wall street [#permalink] New post 27 Nov 2008, 05:43
antapple wrote:
I think that we are far away from the end of wall street... but time will tell.

In 4 or 5 years Goldman executives will be making $50 million again.


The article isn't about "the end of Wall St.". The actual title is "The end of the Wall St. Boom".

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Re: The end of wall street [#permalink] New post 28 Nov 2008, 00:34
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Great article. Loved Liars Poker too.

refurb's right about the article spelling the end of the boom and not the profession itself. Securitization, which has primarily been responsible for the insane boom and money-making on the wall street will definitely take a hit. But as technological innovation tries to simplify or find solutions to existing real-life limitations, financial innovation (securitization) aims to find workarounds existing regulations by the creation of products that are intended to make money. Both of them are here to stay. Bring in new regulations, and you will also bring in the innovators that target the loopholes in them in anticipation of better-than-average returns.
Re: The end of wall street   [#permalink] 28 Nov 2008, 00:34
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