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So Long, Sell-Side?

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A few years ago, when we were younger and stupider, we predicted the death of sell-side analysis (citing RegFD, access to data, etc) half-joking suggesting that it would be reclassified as "marketing". And then sell-side analysis stubbornly refused to die, much to our disappointment. But Paul Kedrosky suggests that the end is near and Lehman's already removing the feeding tube:

When is an equity analyst not an equity analyst? Apparently when they work at Lehman. That's because Lehman is moving some analysts to the trading desk and calling them "desk analysts"... Unlike normal analysts, these desk analysts can give on-the-fly recs, don't publish research, and aren't bound by new SEC dislosure regulations. While a cynic would call this a way to end-run regulation, I think it an overdue change. Let's stop pretending that equity analysts can operate in a some rarified world separate from how their income is generated (i.e., trading). Analyst are salespeople. Always have been, always will be.

When Is An Analyst Not An Analyst [Infectious Greed]



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