Even a much envied firm like Goldman Sachs could not escape the credit crisis unscathed. At left, its New York headquarters.

By JULIE CRESWELL and BEN WHITE

Wall Street. Two simple words that - like Hollywood and Washington -conjure a world.
A world of big egos. A world where people love to roll the dice with borrowed money. A world of tightwire trading, propelled by computers.
In search of ever-higher returns - and larger yachts, faster cars and pricier art collections for their top executives - Wall Street firms added employees to their trading desks and hired quantum physicists to develop foolproof programs.
That world is largely coming to an end.
The $700 billion bailout package passed by Congress on October 3 may stabilize the financial markets, but it is too late to help firms like Bear Stearns and Lehman Brothers, which have already disappeared. Merrill Lynch, whose trademark bull symbolized Wall Street to many Americans, is being folded into Bank of America.
For most of the financiers who remain, the days of easy money and supersized bonuses are behind them. The credit boom that drove Wall Street’s explosive growth has dried up. Regulators who sat on the sidelines for too long are now eager to rein in Wall Street’s bad boys and the practices that proliferated in recent years.
“The swashbuckling days of Wall Street firms’ trading, essentially turning themselves into giant hedge funds, are over. Turns out they weren’t that good,” said Andrew Kessler, a former hedge fund manager. “You’re no longer going to see middle-level folks pulling in seven- and multipleseven- dollar figures that no one can figure out exactly what they did for that.”
The beginning of the end is felt even in the halls of the elite firm Goldman Sachs, which, among its Wall Street peers, epitomized and defined a high-risk, high-return culture.
Goldman is the firm that other Wall Street firms love to hate. It houses some of the world’s biggest private equity and hedge funds. Its investment bankers are the smartest. Its traders, the best. They make the most money on Wall Street, earning the firm the nickname Goldmine Sachs. (Its 30,522 employees earned an average of $600,000 last year - an average that considers secretaries as well as traders.)
Goldman, however, could not withstand the turmoil that rocked the financial system in recent weeks. The A.I.G. debacle was particularly troubling. Goldman was A.I.G.’s largest trading partner, according to several people close to A.I.G. Goldman assured investors that its exposure to A.I.G. was immaterial, but jittery investors and clients pulled out of the firm, nervous that stand-alone investment banks - even one as esteemed as Goldman - might not survive.
So, last month, with few choices left, Goldman Sachs faced the harsh reality and turned itself into, of all things, something rather plain and pedestrian: a deposit- taking bank.
Many people say that with such sweeping changes before it, Goldman Sachs could well be losing what made it so special. But, then again, few things on Wall Street will be the same.
Even if the bailout stabilizes the markets, Wall Street won’t go back to its freewheeling, profit-spinning ways of old. After years of lax regulation, Wall Street firms will face much stronger oversight by regulators who are looking to tighten the reins on many practices that allowed the Street to flourish.
Most important, a stiffer regulatory regime across Wall Street is likely to reduce the use and abuse of its favorite addictive drug: leverage.
By using leverage, or borrowed funds, firms like Goldman Sachs easily increased the size of the bets they were making in their own trading portfolios. If they were right - and Goldman typically was - the returns were huge. When things went wrong, however, all of that debt turned into a nightmare.
“What happened confirmed my feeling that Goldman Sachs, no matter how good it was, was not impervious to the fortunes of fate,” said John H. Gutfreund, the former chief executive of Salomon Brothers.