J.P. Morgan Says Net Analyst Noglows Leaves

The bubble is gone but its vestiges remain: Skeins of fiber-optic cable are unlit, closets full of black turtlenecks unworn. And brokerage firms keep covering industries that basically aren't around anymore.

But incrementally, that last excess is getting unwound. In the last two days two analysts from formerly highflying sectors -- electronic brokerage and trading analyst Gregory Smith and Internet analyst Paul Noglows -- have left J.P. Morgan Chase (JPM). Both worked for JPMorgan H&Q, which is what remains of Hambrecht & Quist, the boutique technology investment bank that Chase bought for $1.35 billion in late 1999.

Beyond confirming that both Smith and Noglows had left, a J.P. Morgan spokesman would make no comment. But a source close to Smith at the firm told TheStreet.com earlier today that J.P. Morgan had given him "an opportunity to cash out," and "given that opportunity, he thought it was the best time to take some time off." The source said other employees had also been offered voluntary buyouts.

It's not hard to see why J.P. Morgan would be offering payouts. There's not much left of the electronic brokers, who at one time were supposed to challenge Wall Street's old guard. Besides the drop-off in public interest in active trading, many investors have found that do-it-yourself investing can be as dangerous as do-it-yourself surgery.

The total market capitalization of the eight companies that Smith had under coverage stands at about $12 billion these days. At its height in 1999 one of those companies, E*Trade (ET), was worth $16.8 billion.

Internet stocks have fallen, if anything, on harder times than the e-brokers, but some of the stocks followed by Noglows -- a former reporter who joined up with Hambrecht in 1996 -- were still relevant. Chief among them is AOL Time Warner (AOL). The problem is that calling AOL an Internet company nowadays seems faintly ludicrous. It's a media company that derives most of its profits from broadcast news, publishing and the like. Its main competitors are outfits like News Corp. (NWS) and Viacom (VIA). And it should be covered by a media analyst.

Look through the anlyst roles and you'll see there's still a lot of excess on Wall Street. Too much money and effort are expended on areas which, while they may contain a handful of companies that are still important, could easily be wrapped into other areas of coverage. Brokers are said to be tightening their belts, but they could still stand to cut some of the fat.

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