Sb, this kind of news breaks my heart. There's nothing worse than seeing a slut struggle.
I've been short the sluts and I'm damm proud of it!
There's more to making money here. I consider it to be a moral victory!
>U.S. investment banking business has fallen off a cliff. That's clearly bad news for Wall Street, which made a pretty penny underwriting stock and advising companies on mergers and acquisitions until a year ago.
Though the biggest investment banks are already feeling the pinch, some will likely suffer more than others in a protracted economic downturn, including those firms that rely heavily on fees from stock underwriting and M&A advisory, such as Goldman Sachs (GS chart, msgs) and Morgan Stanley Dean Witter (MWD chart, msgs), both downgraded by Merrill Lynch on Feb. 28.
It shouldn't have been this way. Brokerage stocks rallied ahead of this winter's much-anticipated interest rate cuts by the Federal Reserve Board. "By the time the rate cuts happened, the brokers were priced to perfection. And it's hardly in a perfect environment for the brokers," says Ken Worthington, brokerage analyst at CIBC World Markets.
U.S. companies have raised just $3.8 billion so far this year in 21 initial public stock offerings, compared with $11.3 billion in 82 deals through March 9, 2000, according to Thomson Financial Securities Data. Investment bankers are still generating substantial M&A fees, but nothing like this time a year ago. So far this year, they have advised companies on 192 mergers worth $101 billion, compared with advisory work through the same period last year on 553 deals valued at $425 billion.
Last week, Bear Stearns (BSC chart, msgs) kicked of the latest round of layoffs on Wall Street, cutting 3,000 jobs from its workforce. If current trends continue, more firms are sure to follow.
"It had been the case that firms were afraid to fire because they were afraid to lose market share," says Worthington, referring to fears that departing employees will take business with them to other firms. "But if the market continues to be weak for the next two quarters, I expect that we'll see more layoffs." |
