With all the commotion surrounding the financial climate, there has been continual talk of the extinction of the investment banks and silly mockeries made of prospective investment bankers and how they’re going to land flat on their faces.

Although I concede to the thought that the high-risk investment banks we once knew have well and truly moved to the side, does anyone really believe that banks won’t find a way to make huge profits again? We are experiencing a trough in the economic cycle. A cycle implies… cyclical behavior. That means the economy will make a comeback! As will the bottom line on the financial statements of many banks!

For the most part, universal banks such as Bank of America and JPMorgan Chase will continue to (kinda) thrive. Some investment banks have survived, albeit with new regulations. And while many of the bulge-brackets have crumbled, luckily, it isn’t true that they are the only investment banks on Wall Street.

Many seem to agree with these sentiments. You can call it optimistic, but the truth is that all the tempting investment-banker bullying that has been all the rage is unfounded and hyper-dramatic. Live long and prosper, Wall Street. And to all you silly, misinformed masochists who jump up and down with shrieking glee at the thought of Wall Street crumbling away, sit back down and hide under my table and do something more productive.

In times as economically screwed up as our own, it’s oddly comforting for Columbia students to remember that their man should be setting the nation’s monetary policy right now. Well maybe not that comforting–things are goin’ to shit, fellas, and they would be regardless of who’s heading up the Fed. Oh well. A funny glimpse at what might have been:

The events we have witnessed over the last year, specifically in the last few days, have been described as “one of the most dramatic days in Wall Street’s history” in an article by the New York Times.

In a mere matter of hours, Lehman has filed Chapter 11 bankruptcy while Merrill Lynch has sold itself to Bank of America. Naturally, Bank of America is rubbing its hands together in delight as it as now assumes domination over the brokerage market, being able to draw in on a bigger share commercial and traditional consumer banking.

At the same time, insurance group American International Group is also treading on thin ice, snagging a $85 billion credit line from the Federal Reserve. Desperately looking to accumulate lifelines, the Federal Reserve has looked into a bank-financed credit line of $70 billion from Wall Street giants Goldman Sachs and JP Morgan Chase. In light of the recent events, AIG’s credit rating is in serious risk according to an AIG insider:

“Ratings agencies had threatened to downgrade the insurance giant’s credit rating by Monday morning, a step that would allow counterparties to swap contracts issued by A.I.G.’s financial products unit to withdraw up to $13.3 billion in capital, under their contracts with the company. One person close to the firm said that if such an event occurred, A.I.G. might survive for only 48 hours to 72 hours.”

But why didn’t the Federal Reserve Bank come in to rescue Lehman?

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From the class of the extravagant, former President of FC Barcelona, Professor Xavier (Shah-bee-eh) Sala-i-Martin, we answer this question with a bellowing ‘no’!

Of course, this means that Jeffrey Sachs has had all us ignoramuses (I think ‘ignorami’ sounds better) on! This means we can finally be relieved of the weighty guilt that Sachs manages to throw onto our shoulders after his big Motherhood speeches. Well, that’s not necessarily true. While global poverty is actually decreasing, and the average GDP per capita is increasing, it’s not decreasing at a rate that we are satisfied with.

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The most ominous thing about a recession is that you basically know the gist of its economic reverberations before it happens. The failing economy and the Depression-esque actions the Fed has taken suggest that things have gone awry, and that the economy won’t be recovering any time soon. The other frustrating thing with such crises is that they take their toll over a long period of time. This of course means a few outstanding things for the Columbia University community.

Firstly, these new financial aid boosts. Having coincided with the biggest plunge in the economy since the 1930s is not only frightening but also makes me wonder why these boosts weren’t made in brighter times. Will Columbia need to retract their offer? Doubtful, but something to think about. Secondly, adios to a large portion of our budding investment bankers. Thirdly, Columbia will eventually have to take some cautionary steps of their own, but where will this money be taken from? Maintenance? Facilities? Or will there be a disproportionate increase in tuition?

But there is some good news. Graduates not supported by mommy and daddy’s money may find cheaper apartments as consumer spending and demand for housing investments fall. But in a recent article in the New York Times, this may lead to some serious negative feedback. After the 1987 Wall Street slump, New York City was “a far less desirable place to live.”

“Office vacancies soared. Housing prices fell, with bad loans leaving some buildings worthless. Crime surged. And tourism plunged.”

… Application numbers plunge, admission rates increase? Or not. All eyes are on The Big Bernanke.

American politics is a dog and pony show of the lowest order. Despite the worldwide coverage our presidential elections generate, the attention is hardly deserved. It’s not rocket science; it’s not even political science.

The high-minded among us would like the democratic process to be a contest of ideologies fought in the halls of power. Instead, a presidential campaign is a bare-knuncle brawl between two beauty queens with enornous sums of cash and a legion of expensive stylists. Are you smarter than a 5th Grader? If so, try to tone it down. All that fancy policy talk won’t fly at the Iowa State Fair or Koop’s Frozen Custard.

How do I know? I worked on the frontlines of the 2004 presidential race in Seattle, Washington. Seattle is the most educated city in the United States, where more than 25 percent of residents have at least a bachelors degree. It’s also one of the bluest enclaves on the West Coast. In spite of these fact I heard an unimaginable litany of irrational, inarticulate reasons why people were voting for George W. Bush and why they couldn’t stand John Kerry. Ideas had nothing to do with it.

Pop quiz: how did the Kennedy clan first make its money? If you answered bootlegging and other questionable activities, you are a winner. While we love the notion of Camelot or the image of John F. Kennedy Jr. saluting his father’s casket, the reality of our politician’s private lives is something different entirely. We should be distrustful of any person who claims to want to lead us, but instead we follow politicians like sunflowers in the early morning light.

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Despite all the economic bulimia occuring in the country, the state of Montana or “the last best place”, is “in better shape than it has ever been.” According to the article from The Economist, unemployment is kickin’ it and the state’s economic growth is continually rising from its fifth consecutive year above the 4% mark. Governor Brian Schweitzer explains that “we’ve been searching for realistic doomsday scenarios and we just can’t find any.” Don’t jinx it, Schweitzer.

Montana’s economy is largely dependent on agriculture, mining and tourism. Agriculture is up 20% from 2006 and extractive industries are so desperate, they’ve settled with digging copper out in Butte, Montana–”the worst-grade ore in the world.” And since housing isn’t such a big thing over there, they’ve managed to suck in most of the subprime blast. So to all those in California, Florida, Arizona, Nevada and most of all Michigan (experiencing the highest unemployment rate in the country at 7.6%), pack your bags and head to the mountains before it’s too late.