I've had this theory, ever since about 2002, that there is an inverse correlation between the formality of business attire and the exuberance of financial markets.
Although I did not recognize it at the time, the first indications of such an inverse relationship showed up in the late 1990's, with the dotcom equity explosion. If you remember, Alan Greenspan characterized that time in our history as one of something like "irrational exuberance." As the 90's progressed, as the NASDAQ index climbed higher and higher, and as the Masters of the Universe became tech gurus instead of Wall Streed gurus, business attire in general began to mimic the dress of the twentysomething internet billionaires who seemed to be popping up regularly: wrinkled khakis, logoed polo shirts and Docksiders.
As these billionaires became more ubiquitous, and as Wall Street bankers took note of their dazzling newfound wealth, this attire even seemed to trickle right down onto Wall Street itself; New York adopted business casual, first on Fridays, but when the dotcom explosion seemed almost complete, it became the norm all week long, in summer, winter, whatever.
Well, then the dotcom bubble burst. Some people immediately reverted to wearing suits. That's when I noticed the relationship. However, the reversion was not complete; some institutions kept with the more casual wear. Others didn't know what to do (like MidMark) and effectively had no dress code at all. Younger analyst types would sport casual wear, while older management started wearing ties again. The trend toward more formal continued up until about 2005.
Then, the Masters of the Universe became hedge fund managers. Well, since they were beholden to noone, they got to work in casual dress again. The cycle started over again, although it was not quite so complete. Portions of Wall Street, particularly investment bankers, still wore suits. But it was not uncommon in 2006 or early 2007 to have meetings, during which there might be discussions about the movement of billions of dollars, attended by people wearing jeans with rips in the knees.
Well, now the real estate bubble has bust, and the financial wreckage is like nothing anyone has ever experienced before.
I went to a meeting at the Association for Corporate Growth this morning. It was attended by about 100 bankers, lawyers, accountants, private equity folks, and probably some hedge funds too.
All suits. 100%. All of them, dark. Polished wingtips. Not a polo shirt to be seen...