Wall Street IS dead. Long live... what?
This is one of those cases of being careful what you ask for - you may just get it. Actually, this was going to happen - it was as ineluctable as death and taxes.
Bear Stearns and Lehman Brothers have joined Donaldson, Luftkin, & Jenrette; Hambrecht & Quist, Alex. Brown, Morgan Keegan, Pru Bache, and a host of other non-bank brokerages that have gone the way of all flesh.... OK... So who, and what, is left?
Not much, really. A couple of zombie big banks... and Goldman/U.S. Treasury/the Anti-Christ.
The only thing keeping New York and its metro region from slipping off into a Billy Joel like ferrel state-of-mind is the yield spread. Given where TPTB hail from, the Fed just ain't gonna let that happen - they would rather destroy the currency, California, relations with China... anything but that.
Maybe you are thinking the drug, healthcare, or consumer staples sector... I doubt it... Moore's Law applys to drugs as well as micro chips, 18% of GDP on healthcare is simply not possible in the long run, and just how much bleach and tooth paste do we really need? It won't be long before folks use half the tooth paste per brushing and reuse spray bottles with diluted vinegar and ammonia... it seems the end of bubbles is nigh... and that means a great many folks will need to make their living by honest toil... especially as the municipal and state tax revenues fail to materialize and all those public employees join the bankers and brokers in the ranks of the 99'ers.
The banks, brokerages and the rest of the financial sector are in for a great deal more contraction. Given that China and Japan exported things, and the U.S. exported financial services, this is just disastrous for government revenues on all levels. All of the folks complaining about the "rich" won't have a great deal to complain about in the future... but I don't think that that is going to work out so hot for the "poor" that continue to rely on others for their resources.
HOWEVER
This is NOTHING but good news to the next generation, at least for the ones that play their cards right. Housing costs are no longer going to absolutely destroy them... and if they don't let the student loan thing ruin them... and they stay clear of states and municipalities that want to tax them into penury... AND they absolutely, positively do not marry without a prenuptial agreement... then they have as much of a shot at a beautiful life as any other generation... certainly more than their parents who got sucked into the whole material competitiveness and divorce thing with the help of Hollywood. (Remember the '80s? Limo's and cocaine and rolexes and the Hamptons... didn't do much for people's well being... turns out that "early to bed and early to rise" was no lie. Who know's what wisdom young folks will pick up next? "A penny saved is a penny earned"?)
The next bubble? Oil has more of a shot than Gold from here, me thinks (but much depends on the various policy responses and initiatives coming out of Washington).
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The U.K recently rejected Keynesianism. Is the U.S. next? Maybe not yet, but perhaps after the next presidential election. While absolutely necessary, it will require the greatest political sales job and foresight since Herod rejected Cleopatra's come on, because it will require convincing the elderly to make sacrifices along with everybody else - and living as I do amongst them here in Florida.... well, I am not so sure about that. The idea that incoming Tea Party folks are already talking about FUTURE cuts and FUTURE age increases for benefits does not sit well with my mathematical mind...
But you never know.