| Deleveraging and conservative restructuring may work for a commercial bank, but not the hybrid commercial and investment banks that we're talking about here. AFAIK, Morgan and Goldman are now commercial banks and restructured to this form to stay alive. http://www.nytimes.com/2008/09/23/business/23wall.html These companies are involved in many diverse business lines and, bungling in the mortgage-backed business aside, many of these businesses are hugely profitable. Is this legal since they are now commercial banks? Do you have any citations on these hugely profitable non-core businesses? At any rate, gains from trading desks will be seriously diminished by holding/leverage requirements. If a trader makes $30 million in this way, he is in a position to demand, say, $5 million to $10 million or he will be happy to join a different firm that will pay him that amount. Do you have any stats on any member of the trading desks of these firms doing these types of numbers? Further, is it reasonable to assume these traders can continue to be as productive in this leveraging/financial climate? Is the current market for that talent still as strong? |