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 Last week I highlighted
the growing popularity of Great Depression references among the media
and academics. Now it seems the public is falling in line with the
perception that times may get as hard as 70 years ago, according to a
new CNN poll.
About 60% of the 1,000 people surveyed by the cable news channel
believe a depression is very real. Even bleaker, a related CNNmoney
query of economists (no numbers given, so it may not be terribly valid)
points to a belief that unemployment could reach as high as 12% next
year -- which, while half of the Great Depression's level, is certainly
higher than at any point since. Fueling some of the rising rolls of the
unemployed are folks from Lehman Brothers Holdings Inc. and other distressed or
deceased Wall Street firms. So what's in store for an out-of-work
dealmaker in what Time coined Depression 2.0? Apple carts? Soup lines? Mini golf?
While apple carts and soup lines are often identified with the Great Depression, so too apparently is mini golf, notes a Bloomberg story
about the state of the golf industry, which seems to be sharing Wall
Street's pains. Mini golf evidently saw its apex during the Depression,
when 30,000 courses -- about five times the number of fairways today --
opened across the country, some even on apartment building rooftops. More seriously, many dealmakers leaving Wall Street firms traditionally headed toward hedge funds and private equity firms. However, with hedge fund performance flagging and redemptions rising, there may be limited opportunities in Greenwich, Conn. And with credit markets closed, buyout firms remain relatively quiet (for the time being) and are probably not looking for new employees. Most refugees from the bigger investment banks may find themselves joining boutiques. Dealscape's affiliate Corporate Dealmaker spoke to Sun Capital Partners Inc. managing director Gary Talarico, a Lehman Brothers alum, about the prospects of former colleagues. Talarico predicts a further shrinking of the banking industry before stabilization, and then a "deconsolidation" fueled by the most productive and talented bankers joining or founding boutique advisory firms. He's already heard about a few old friends seeking funding to start their own shops -- boutiques of course. - Matthew Wurtzel See story from Corporate Dealmaker Matthew Wurtzel is the editor of Dealscape. CategoriesPrivate capital video
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