Recently I trekked into New York City and headed down to my old stomping grounds in the financial district for a business meeting.
In the early years of my career, one of the “must reads” for newbies on The Street was the classic book A Random Walk Down Wall Street. As many industry veterans know, the work is a primer on the ins and outs of investments from a sales perspective. But on my not so random walk I couldn’t help but notice that Wall Street’s a different place these days.
Various media outlets have been reporting the thousands of financial service jobs that have been lost since the financial tsunami of 2008, and the thousands more that are slated to be scrapped this year. And some observers believe these losses are not just cyclical but part of a structural change that is shrinking the financial industry.
Whether this is the case is hard to say. But there are other factors that have thinned the masses in the wake of the financial crisis. In addition to the slow recovery in the credit markets, the higher capital requirements being ushered in by Dodd-Frank and the EU’s Basel III Accord are forcing financial firms to cut costs, which means job losses. Plus, there will be diminished proprietary trading once the Volcker Rule is implemented– even if it gets watered down.
But the job losses are startling. Some analysts contend that the Street may not replace these jobs, which means many former Wall Street workers are going to have to find a new corner or another line of work altogether. And local businesses and coffee vendors will need to add a new word their lexicon: “dislocation.”
Dislocation? Or is that disappearance?
It could very well be that the job shrinkage is permanent and that those jobs are gone forever. And it remains a mystery to me where the people who once held them are rolling these days, perhaps “like a Rolling Stone with no direction home?”
But wait! To borrow a catchphrase coined by NY Yankee Hall of Fame Catcher, Yogi Berra, “it’s like deja vu all over again.” We’ve certainly been here before. Like in the wake of the 1987 Market Crash and the resulting investment bank collapses coupled with the meltdown of the savings & loan industry and the dissolution of the Federal Home Loan Bank Board.
All the Wall Street Old Timers certainly remember that.
And despite the Strum und Drang, all’s well on Wall Street too. These contractions come and go, and while it’s been a long time coming, all things must pass. Of course, it would help if someone took the controls away from Fed Big Wheel “Helicopter” Ben Bernanke. But then, for that to happen requires ‘we the people’ to reclaim the Oval Office come November.
In the meantime, on my way back home from Wall and Broad Streets, all I could hear were the sounds of silence as the tsunami survivors were busying themselves with their not so smart phones. Silence is not golden.
Kyle Colona is a New York-based freelance writer and a Feature Writer for CompliancEx and the Wall Street Job Report. He has an extensive background in legal and regulatory affairs in the financial services sector and his work has appeared in a variety of print and on-line publications as well as his blog, “Colonaville.”