Investment bankers are not generally lost for words. But as they surveyed the battered landscape of their industry this week, many were struggling to sum up the damage the latest financial storm has inflicted. In less than a fortnight, a business that emerged from the wreckage of the Great Depression to become the dominant force in financial markets has changed beyond recognition.
Two weekends ago, huddled inside the New York Federal Reserve headquarters in lower Manhattan, top bankers witnessed the disappearance of two of Wall Street's most famous names. Lehman Brothers, whose history stretched back 158 years, slid into bankruptcy after the US government refused to support a rescue, while the once mighty Merrill Lynch rushed into the arms of Bank of America.
The upending of the established order left many aghast. At Morgan Stanley, as its share price plummeted and the cost to insure its debt shot up, staff in the bank's US offices sneaked out of their cubicles to catch a glimpse of the news about their employer on television or newswires. Others stayed at their desks clicking the "refresh" button on news websites to find out what was happening. "We were staring into the abyss last week and it was tough not to know our fate," says one.
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