Regular readers here know I've been talking about this phenomenon for two years now - the Emperors have been found to have had no clothes all along and what was seen by America in 2008 cannot be unseen. They couldn't even manage their own money, so now, post-crisis, we are way less inclined to allow them to manage ours.
It's all over but the crying and a new cycle won't change that. People who really believed that their work was worthy of an automatic seven-figure annual salary are finding that they are replaceable or even superfluous now that banks are going to be regulated and held responsible for their actions going forward (we hope). The simple fact of the matter is that Wall Street's megabanks without leverage and a cyclical bull market are nothing special and now everybody knows it.
Banks have always had occasional bad years, but the sense on Wall Street is that this bad year is different. Over the past several weeks, I have had wide-ranging conversations with more than two dozen senior Wall Street executives, traders, bankers, hedge-fund managers, and private-equity investors. And what emerged is a picture of an industry afflicted by a crisis it would not be flip to call existential.
Read the whole thing, this is key.