US Economy: Is This the End of Wall Street As They Knew It? -- Gabriel Sherman

On the flip side, after 11 months, the opposition still remains fundamentally divided along ethnic, religious, political and geographic lines, and is unable to articulate a detailed political platform. Furthermore, the armed opposition groups – brought to light in the recent Arab League mission report – lack a central command, are locally based, and have limited, irregular access to the military supply lines essential for operating on a larger scale.

The crash four years ago was shocking enough to the financial class. But what is happening on Wall Street now is even more terrifying. No doubt the economy itself—the crisis in Europe, the effects of the tsunami in Japan, America’s sputtering recovery—has played a large part in the financial industry’s struggles. But even the most stubborn economies improve eventually. The bigger issues are structural. The Dodd-Frank financial-­reform act, much maligned, has already begun to change the shape of the financial system—even before a number of its major provisions are proposed to go into full effect this coming July. Banks are working hard to interpret Dodd-Frank’s provisions in a way most favorable to them—and repealing Dodd-Frank is a key piece of Mitt Romney’s campaign platform.

To comply with the looming regulations, banks have begun stripping themselves of the pistons that powered their profits: leverage and proprietary trading. In the wake of the crash, Morgan Stanley and Goldman Sachs converted to bank holding companies to tap the “discount window,” the Fed’s pipeline of cheap funds that gave the banks an emergency source of liquidity. That move seemed smart then, but the stricter standards required of banks have now left them boxed in.

For more: Is This the End of Wall Street As They Knew It? -- New York Magazine