Last Wednesday evening, I was chatting with an investment bankerneighbor about the financial markets travail. He wondered aloudabout the future of Bear Stearns: "What's the point, what are theyoffering that their stronger competitors can do much better?" Hesaid he didn't see them surviving. And he mentioned some other highprofile names that he thought weren't too secure either.

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In fact, by Friday Bear was on life support and only because ofan unprecedented Fed move to shore up some of their bad securities,akin to hooking up a feeding tube and respirator to someone withoutinsurance to pay at the emergency room. And in fact Bear's days arenumbered with Sunday's announcement of a JP Morgan takeover. JamieDimon, a proven M&A surgeon, will take the parts and peoplethat may add some value and amputate the rest.

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And so what happens to that massive Bear headquarters on MadisonAvenue near Grand Central? A more than nice building -- it's triplemint. It will fill back up with that great location. Maybe JPM willmove into it and leave some of its nearby digs. But here we go, thelooming Wall Street debacle starts to impact the stalwart Manhattanoffice market. The Street starts to slim down and reconfigure andthat only means rising vacancy rates in America's most importantoffice center. And how's that hedge fund guy you know doing in his$100 per square foot space?

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Bear's problems and the Fed's reaction only reinforces notionsof the dire state of the financial markets and in particular thecompanies which got caught up in transaction mania, using otherpeople's money and lots of cheap debt. The worst thing Bernanke,Paulson and Bush can do is show any signs of panic. So theyact their parts and say we'll get through it. And yes we will. Butthe trajectory of talk and action is noticeably less confident andmore seat of the pants -- like trying to figure out what buttons topush when the plane starts to spin -- oh yeah the $600 checks arecoming soon, help's on the way.

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And so it goes. Wall Street will need many fewer people to domany fewer deals for a while. The days of making money out of thinair are over. Sure there will be plenty of opportunity to buy upassets that have lost a lot of value. Just look at Bear. But ittranslates into fewer warm seats and more empty cubicles.

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© Miller Ryan LLC 2008

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Jonathan D. Miller

A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.