Sunday, September 14, 2008

Death of the Investment bank?

Like VS Naipaul claimed 10 years ago that the Novel as we know is dead, the same can probably be said for Investment Banks on Wall Street starting today.

I obviously have not followed the financial markets for long but even with my limited knowledge what is transpiring today (Lehman talks of Bankruptcy and Merril Lynch bought over by BofA and AIG in deep trouble) seems to be historic. And if you listen to some pundits on CNBC they are calling that Goldman Sachs and Morgan Stanley better go find buyers next week else they are in trouble as well.

What this means for us B school students interested in careers in Banking is not clear at this point but the prospects can't be that great. The market is going to be flooded with people who lost their jobs from this carnage and banks will perceivably cut down or be more prudent in hiring from here on for the short-term.

I am interested in hearing from one of our Finance Professors (who is a superstar in that area) about the impact of this on the markets and the state of the economy in the next few months. I think I will sit in an extra class tomm just to hear him speak about this.

I knew something was not right when I got a call from a trader at a big European Investment Bank last night. This friend had earlier asked me to come over and spend a day on the trading floor anytime I wanted. But he called last night to let me know that apparently no one other than employees are now allowed on the trading floor considering the state of the markets now. He told me to wait until October or November. This was before I had heard of the Lehman and Merril mess. Who knows how things are going to be after this.

I expected the dollar to have a mini-crash this evening but it is holding up reasonably ok. Maybe Monday will bring more bad news.

Interesting times!

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