aeronode

Wall Street

By implication, the whole asset management industry is going to consolidate and shrink; its cost and fee structure will also need to adjust to more competitive levels. Meanwhile, the trend toward lower fees and the preference for larger managers pinch smaller funds even more nastily because of the way these developments interact with the second reason for the industry’s fundamental transformation: rising costs.

Days of Easy Money Are Over for Fund Managers, Alice Schroeder, Bloomberg; 18 Jan 2012.

All across Wall Street, financial institutions are suffering their worst results in years. JPMorgan reported last month that fourth-quarter profits were down by $1.1 billion. Goldman Sachs reported profits fell by 56 percent, Bank of America saw its profits drop by 38 percent, and Morgan Stanley reported a 26 percent drop … But as banks cast about for a new business model, the city’s economy will need to find new sources of growth (this is why the Bloomberg administration has aggressively courted the tech and science industries).

The End of Wall Street As They Knew It, Gabriel Sherman, NY Mag; 5 Feb 2012.

I wonder if finance jobs will dry up like legal ones have. JD’s are in trouble, soon also the MBA’s, and PhD’s have been dealing with a glut for decades. Then a majority of liberal arts undergrads are finding BA’s to be in limited demand. We get a discontented, educated class leading to social unrest (OWS, arab spring). And possibly a credit implosion when these new grads can’t pay off their loans, possibly on the scale of the mortgage crunch (get me some CDS’s stat!). On the other hand we’ll have lots of cheap (skilled?) labor. What business can I start that employs a ton of lawyers, some MBA’s, and a million english majors? I got nothing.