March 27, 2009

Research analysts have always had it fairly tough on Wall Street. For analysts covering banks, it is even harder now to maintain a bearish stance on the future of banking while taking paycheck from big banks.Some aren’t even trying. Three prominent analysts covering investment banks have left behind big banks to join boutiques: Meredith Whitney started her own firm, Deutsche Bank analyst Michael Mayo is headed to Calyon Securities USA–the U.S. arm of the French bank Calyon–and former Banc of America Securities analyst Michael Hecht just landed at San Francisco boutique investment bank JMP Securities.

Another analyst, Richard X. Bove, left one boutique (Ladenberg Thalmann) to join an even smaller one (Rochedale Securities).All have been bearish on banks for some time. It doesn’t take a stretch of the imagination to realize that even for the most independent-minded analysts, their dire pronouncements on the future of banking threaten to bite the hand that feeds them.Yet there is no one reason for these moves. Mayo, for one, complained privately that Deutsche Bank limited his ability to speak freely. Whitney isn’t abandoning the idea of an investment bank–her new firm focuses on research, but may well open an investment-banking arm to advise companies on mergers.