Dealbook - A ‘Bonfire’ Returns as Heartburn - NYTimes.com

The NY Times has a gloom and doom article on the future of Wall Street one year after Blackstone went public. It is through eyes of Tom Wolfe the author of Bonfire of the Vanities.

Dealbook - A ‘Bonfire’ Returns as Heartburn - NYTimes.com:

"Blackstone’s stock has gone nowhere but down since it went public, dropping nearly 50 percent from its high the day it started trading. But that’s the least of it.

The once mighty Wall Street investment banks have been brought to their knees, sending out pink slips to more than 83,000 employees worldwide, racking up billions of dollars in losses as a results of their foolish forays into subprime mortgages. Bear Stearns all but went out of business before being “saved.” Some hedge funds have gone belly up.

Those lords of private equity, many of which were preparing to follow Blackstone into the public markets, have been put on semipermanent hiatus...."

As Mr. Wolfe nicely put it, “It sounds like even the firms that aren’t in trouble are in trouble.”"

To me what makes the article interesting is not the historical look back over the past 12 months, but the potentially prophetic look ahead:

"Wall Street is in for a radical makeover. Fewer people, lower margins, lower risk, lower compensation — and ultimately, fewer talented people. It is likely to change the culture of an industry that for nearly a century has been the money center of the world. “There would be a lot of firms leaving New York if it wasn’t for lunch,” Mr. Wolfe said"