Is Wall Street's hedge fund high getting higher?

The last thing Wall Street's top banks want to see is Amaranth and other funds go under. As we've discussed, these funds represent a lot of revenue for the top banks. One analyst recently estimated that prime brokerage revenues rose 29 percent last year. This year, a 25 percent gain was expected. The problem for the likes of Goldman Sachs, Morgan Stanley and Bear Stearns is that competition has really heated up. Most funds now use multiple brokers and seem more attuned to getting deals. That puts pressure on banks to accommodate the leverage needs of funds. They need more trades to maintain the same level of revenue. We'll be hearing more about this no doubt. SAC Capital Advisors reflects the new pressure that hedge funds, and thus their brokers, are under.

For more on prime brokers:
- Here's a MarketWatch article