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Observations on My Afternoon in New York City

Posted by Larry Doyle on August 19, 2010 12:14 PM |

I spent yesterday afternoon in New York City meeting with a variety of people. Without violating any confidences, there were a number of common themes that came from all my conversations. The themes included:

1. The financial system remains very fragile.

2. The economy remains in very tough shape.

3. Trading volumes in both equity and fixed income markets remain depressed. Equity volumes from just this past May are down by over 30%. I have heard of summer doldrums, but these figures are a lot more than that.

4. Investors do not want to sell what they currently own because they do not know what they might purchase to replace it. Investors do not want to allocate more capital because they are concerned about market valuations in general.

5. We are one ‘tape bomb’ (unexpected news story) away from a major market decline.

6. Wall Street is a decidedly different industry relative to a few years ago.

7. What and who are people really supposed to believe? There is a general lack of trust in information provided by the industry, the media, and the government. Consistent, major revisions in economic numbers lend to a lack of credibility in the reports.

Nothing dramatically new here, but hearing these themes run across three meetings with more than a dozen people provides an honest assessment of the pulse around New York City.

Navigate accordingly.

Larry Doyle

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