Fifty to a hundred thousand high paying jobs are going to go up in smoke in NYC before this is all over. It's a mess for this city, tax revenues are going to be down, real estate prices are going to be down, restaurants will fail, etc, etc. We'll get through it for sure, we always have, but it's going to suck for a while. As my friend Mo said, "I sure wish Bloomberg would get another four years because we are going to need him"
But beyond all that, is this really that bad? I've been thinking a lot about what Howard said on tech ticker last week (roughly 3:35 min into the video).
"the brokerage business is changing, this is what's going on, ..... the stock broker as we know it is gone, hedge funds are making markets, we are witnessing the destruction of an industry"
Those of us who work in the tech business are used to this sort of thing. Capitalism is darwinism and technology driven darwinism has impacted the tech industry more than any other. Where is DEC now? Where is Wang now? Where is Novell (not dead yet)?
But technology driven darwinism is hitting every industry these days. People tend to think of the newspaper or music business when they think of industries that are being destroyed by technology, but we have to admit the same thing is happening to the traditional investment banking and brokerage industry.
Andy Kessler, a former wall streeter who moved to silicon valley and never looked back has it right when he wrote this the other day:
Analogies only go so far, but Wall Street got caught in the same
wringer (as airlines). Deregulated since 1975, balance sheets grew and grew as money
got thrown at the profitable business of trading stocks and bonds,
investment banking and money management.
