Investment Banking's Dead? Ha.

Seems like it wasn't that long ago, people were declaring the end of investment banking. Merrill Lynch was bought by Bank of America, Morgan Stanley and Goldman Sachs changed into commercial banks and pretty much everyone outside of Wall Street and a few corners of Washington were ready to go after bankers the way Bavarian villagers used to go after Boris Karloff. (If you don't know who I'm talking about, go watch Young Frankenstein).

So, all those people were wrong. As Alan Kohler points out in Australia's Business Spectator, Goldman seems to be doing just fine lately, while Citigroup is "wallowing along trying to make money from actual customers and failing to do so."

This week Goldman announced quarterly profits of $3.19 billion, up from $845 million a year ago. Meanwhile, Morgan Stanley is expected to report a profit for the third quarter later this week, Reuters says. "These are two companies that have two less major competitors than they did last year with the failure of Lehman Brothers and Bear Stearns," Bill Hackney, chief investment officer with Atlanta Capital Management, told Reuters. "We think the outlook for both of these companies is very strong."

As for Citi, well, it made a profit of $101 million, on a special gain, which was better than the loss most analysts had expected.

Meanwhile, The Wall Street Journal reports the 23 largest public companies in the financial markets will award about $140 billion in compensation this year, 20 percent more than last year (no surprise) and some $10 billion more than 2007 (notable.) Still, the Journal points out, just because they can award that kind of money doesn't mean they will. Some firms "are scaling back on compensation, reflecting recent moves to cut jobs, shed businesses or hunker down until they are more confident in the market rebound's staying power," the Journal says.

In other words: Investment banking's not dead, its pay might be rebounding, but job hunters aren't out of the woods yet.