Basically, it was about a year ago when things started to look shakey for investment banking. My wife had just interned at Lehman Brothers in Tokyo over the summer, specifically in Structured Finance (i.e. Mortgage Backed Securities (MBS), etc), and had hoped to be extended an offer. Looking back, we were really disappointed when she wasn't given an offer, but now we feel it was a blessing in disguise as Lehman has disintegrated and the MBS market has tanked. Below is a look at the Dow and Nikkei tracked over the past year:
The Nikkei was hammered in January and March and has never really recovered. October has historically never been kind to the stock market, and so far it appears this October will not disappoint. In the above chart, you can see how sensitive the Nikkei is to the Dow, although the Dow seems to track with less overall volatility.
Having just passed the end of the 3rd Quarter, it will be interesting to see how earnings reports look for many companies. If earnings and forecasts are depressed, I can only imagine there will be further erosion in stock prices.