Wall Street's allure may be gone for good

By Joseph A. Giannone - Analysis

NEW YORK (Reuters) - Wall Street's fat cats are in the public's doghouse, and it could be a long time -- if ever -- before the eye-popping paycheques and glamour of the last two decades return.

Americans have long tolerated Wall Street's big bonuses, bigger egos and outsized influence because the firms and their executives at least made lots of money. Now, those days are over.

Huge losses, a multitrillion-dollar government bailout and those never-ending bonuses have turned the legendary "masters of the universe" into villains.

"The image of the all-powerful Wall Street banker as master of the universe will take 50 years to recover, if ever," said Bryan Burrough, co-author of "Barbarians at the Gate," a definitive account of the 1988 buyout of RJR Nabisco.

"No longer are these people seen as soldiers of American capitalism striding out into the battlefield with their mansions in Greenwich and $10 million (6.9 million pound) bonuses."

Wall Street has always lured the nation's brightest with the prospects of fabulous wealth, more than making up for the long hours at the office and the intense pressures of the job. But now, a system that let bankers keep half their firm's revenue every year, regardless of the long-term results, is endangered.

No less a figure than the new president of the United States said it was "shameful" for bankers to collect $20 billion in bonuses in 2008, a year taxpayers were forced to provide trillions of dollars to prop up an industry that mismanaged its way to a mountain of credit losses.

President Barack Obama and other officials want to cap compensation at government-backed banks at $500,000 a year -- a fortune to most Americans but chump change in Wall Street's heyday.

"The masters of the universe are now plaintive puppy dogs who don't understand why their feed bowl has been moved," said George Ball, chairman of brokerage Sanders Morris Harris and former head of E.F. Hutton and Prudential Securities. "For a long time going forward, the business will be very different."

Vilified, and with the prospect of fabulous riches fading fast, bankers around the world are having second thoughts about their profession.

"What you'll see is an irreversible trend away from banking," a veteran dealmaker at a big European bank confided.

A first-year employee at the same firm said he may change career paths. "I'm not sure I'll go back to banking after business school. A lot of me thinks I won't."

LOWER EXPECTATIONS

While investment banking will always attract people drawn to the fast pace and thrill of the deal, those embarking on a career in finance will have to lower their expectations.

Samuel Hayes, a Harvard Business School professor who has taught investment bankers the ropes since 1970, said there was no denying the industry's reputation had been tarnished.