The End of Wall Street?
November 20, 2008
If you haven’t seen it already, there is a fantastic article by Michael Lewis entitled The End published by Portfolio.com recently.
Lewis is someone you should know as the author of Liar’s Poker. If you haven’t read that book, I strongly recommend you do. It’s a fantastically written account of Lewis’ experience getting into the world of high finance back in the middle/latter 1980s when he worked for Solomon Brothers. He’s also very well known as the author of Moneyball.
This new article is typically engaging and a really interesting view on part of the story of how the financial markets have reached where they are today. It includes some references to his Solomon days as well, an a meeting with his former boss. Just be aware that it’s a fairly lengthy piece, so be sure you’re able to give it some time, though it’s not a slow read by any stretch.
As for whether I’m in agreement with Lewis’ basic premise that Wall Street is dying, I’m not ready to make that kind of statement. So long as there is a need for financial intermediation there will be a need for Wall Street. That said, it’s an evolution. The Wall Street of Lewis’ time changed considerably over the years, adapting to circumstances. It will continue to do so.
Personally, I think the geographic idea of NYC as the focal point of finance in this country has long since past. Technology has allowed it to begin dispersing to all different parts of the country, and I think the impact of 9/11 served to accelerate that process. It’s going to continue. A lot of companies are going to look at the cost and potential risk of being located in New York and ask themselves if its worth it.
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