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Michael Lewis Says You're All Commercial Bankers Now

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Yesterday we interviewed an investment banker who thinks the Federal Reserve will permanently close the new facility for borrowing by investment banks when it expires in September. Michael Lewis says its too late, the impression that Wall Street's biggest institutions are too big to fail has already taken hold and cannot be reversed. Regulation will surely follow.

For some time now the action has been moving out of the big Wall Street firms and into hedge funds. The quality of financial information, and the ability to act on it, is better outside the big firms than inside of them, even, it now appears, when the information concerns one of the big firms. (The Security and Exchange Commission's investigation into the run on Bear Stearns that preceded the crash has identified three alleged culprits and two of them are hedge funds: Citadel Investment Group and Paulson & Co.)

That trend is about to accelerate, as the golden age of the Wall Street investment bank draws to a close. The glorious 25- year run of these firms will have ended not with a bang, or a whimper, but with a government guarantee.

And the investment banker himself will have taken the final step on the journey to becoming, in all but name, the worst thing he can imagine being: a commercial banker.

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