The pace of mergers and acquisitions activity earlier this year was breathtaking, raising hopes that top Wall Street firms had found a significant driver of revenue at just the right time.

FICC-oriented revenue was slowing dramatically, and top executives were hunting for ways to make up for that. But the near-frenzied pace of deals has unfortunately slowed significantly in the second quarter amid lots of doom and gloom about the world economy and the fate of the markets. According to Thomson Reuters data, about $631.4 billion worth of deals were announced in the second quarter. That's down 20 percent from the first quarter. For the first half of 2011, about $1.4 trillion worth of deals were announced. That's a 35 percent increase from the first half of last year, notes the New York Times.

There's plenty of time for deal activity to pick back up, and you can bet the bankers remain in overdrive. The deal environment remains strong in many ways--cash is plentiful, strategic buyers abound, financial sponsors are on the sidelines, valuations are low. The pent-up demand might explode all over again if people were to conclude that the economic uncertainty was merely temporary.

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