The current issue of New York Magazine covers "The Panic of 2008" from a number of different perspectives -- there's an article from James J. Cramer explaining why "Wall Street had to die in order to survive," a column from (former star equity analyst) Henry Blodget comparing the fates of Lehman Brothers and Merrill Lynch, and an insider's account from a Lehman trader offering a view of "sudden income shrinkage." But perhaps the most interesting article in the issue is a thought piece from Financial Times columnist John Gapper, who takes a big picture view of the current crisis gripping New York and likens it to the cyclical downturn in Detroit's auto industry. As one of his interview subjects points out: "Wall Street is like the auto industry in the seventies, which had a product that was dangerous and exploded on impact. Many people have started to think that the industry has grown too big and needs to shrink. That will be very painful for the city."

Just as the auto industry defined Detroit during the '70s, Wall Street has helped to define New York for decades. When Detroit auto plants started closing down in response to competition elsewhere in the world, these job losses and income shrinkages trickled down throughout the region. In the same way, the loss of jobs at big investment banks could have a trickle-down impact throughout the New York-New Jersey-Connecticut Tri-State region. Already, hints Gapper, cities like London, Dubai and Hong Kong are starting to emerge as viable alternatives to Wall Street.

So will New York survive "the first 21st century financial crisis" as a financial titan, or are the changes afoot on Wall Street signs of a great global shakeout and re-allocation of financial wealth and power?

[image: The Panic of 2008]