Is it or isn't it - the end of the world?

So last weekend, they give up on the Investment Banking Model.

Maybe more "rational" activity on the street - at least for a while.

Shift for Goldman and Morgan Marks the End of an Era - NYTimes.com:

"Goldman Sachs and Morgan Stanley, the last big independent investment banks on Wall Street, will transform themselves into bank holding companies subject to far greater regulation, the Federal Reserve said Sunday night, a move that fundamentally reshapes an era of high finance that defined the modern Gilded Age."

Then there are the "little guys"
From today's WSJournal:

"Don't tell these guys that the investment-banking model is finished.

While the biggest U.S. players are exiting from the pure-play investment-banking scene, about a dozen smaller investment banks remain. Analysts expect them to survive and keep the stand-alone business model alive, albeit at a much more modest level than on Wall Street.

Institutions, such as Piper Jaffray Cos., Minneapolis; Raymond James Financial Inc., St. Petersburg, Fla.; Thomas Weisel Partners Group Inc., San Francisco, and Jefferies Group Inc., New York, have a different business strategy that relies less on risk-taking than that of the more-prominent investment-banking firms.
...
Some analysts suggested that these boutique investment banks resemble in some ways the businesses that Goldman and Morgan Stanley had 25 years ago, when they were much smaller private partnerships. The focus was advising on mergers and acquisitions and stocks and bond underwriting. Only later did the larger investment banks begin to rely on prime-brokerage services to hedge funds and proprietary trading to power their earnings.

For the most part, Fox-Pitt's Mr. Trone says, the smaller firms don't participate in these higher margin but more volatile businesses. The result is less explosive profitability but cleaner balance sheets. For one, the smaller firms typically have leverage at a rate of about one or two times to 1, says Mr. Ryan. That compares with more risky borrowing rates of 25-to-1 or 30-to-1 at Wall Street firms."