How the Crash Will Reshape America

[Vadim]

Interesting read: How the Crash Will Reshape America
http://www.theatlantic.com/doc/200903/meltdown-geography

At first glance, few American cities would seem to be more obviously threatened by the crash than New York. The city shed almost 17,000 jobs in the financial industry alone from October 2007 to October 2008, and Wall Street as we’ve known it has ceased to exist. “Farewell Wall Street, hello Pudong?” begins a recent article by Marcus Gee in the Toronto Globe and Mail, outlining the possibility that New York’s central role in global finance may soon be usurped by Shanghai, Hong Kong, and other Asian and Middle Eastern financial capitals.

In this sense, the financial crisis may ultimately help New York by reenergizing its creative economy. The extraordinary income gains of investment bankers, traders, and hedge-fund managers over the past two decades skewed the city’s economy in some unhealthy ways. In 2005, I asked a top-ranking official at a major investment bank whether the city’s rising real-estate prices were affecting his company’s ability to attract global talent. He responded simply: “We are the cause, not the effect, of the real-estate bubble.” (As it turns out, he was only half right.) Stratospheric real-estate prices have made New York less diverse over time, and arguably less stimulating. When I asked Jacobs some years ago about the effects of escalating real-estate prices on creativity, she told me, “When a place gets boring, even the rich people leave.” With the hegemony of the investment bankers over, New York now stands a better chance of avoiding that sterile fate.

 

[bigbadwolf]

Blah-blah-blah. My eye started to glaze over by the time I got to the third page. No real insight; the same repackaged old rubbish. I'd rather calculate a contour integral.

 

[IlyaKEightSix]

More media hot air. How will this reshape Wall Street?

For the better. The financial industry has become bloated with toxic people.

Ever since the banks started going public, they've started hiring all sorts of people whose one common talent was to hide BS, which bubbled all the way up the monkey chain, and even past the stakeholders (little better) because of the handy-dandy BS storage tanks known as level 3 assets and SIVs (I'm betting a business major invented those...or an economist). And so when they blow up, as is inevitable, the CEOs ransom the entire financial system for taxpayer-paid bonuses.

Maybe now Wall Street will return to the ways of old, before Salomon's IPO, where a man's word was his bond, employees' souls weren't owned by mammon, and a few good men with merit such as Fischer Black and Emanuel Derman defined a firm.

And then everyone wonders what the magic formula is that God Simons has. Well, here's a no brainer: MBAs aren't part of it.

 

[dstefan]

No real insight; the same repackaged old rubbish. I'd rather calculate a contour integral.

An original hobby, indeed =D>:tiphat: