The New York Times reports that the New York economy is more dependent on Wall Street than ever. For every Wall Street employee, there are three jobs created to "support" that person. These support jobs are related to the multimillion dollar real estate Wall Street sleeps in and the lunches and dinners they get delivered to their desks.

And New York is more dependent on Wall Street than ever. The Times reports that In New York and surrounding counties, for example, financial workers accounted for 29% of all money earned and only 11% of jobs in 2006. That is up significantly from 1990, when the finance industry accounted for 19% of wages and 12% of jobs.

The troubles in the financial markets have led to 20,000 layoffs -- a reduction of over 10% from the nearly 200,000 Wall Street employees before the bust began. Most of The Bear Stearns Companies (NYSE: BSC) 14,000 jobs are expected to go. And The Goldman Sachs Group (NYSE: GS) -- which has already cut 5% of its jobs -- was rumored by the New York Post to be cutting 20% of its employees.

Why should you care? When Wall Street sneezes, America gets pneumonia.

Wall Street did well because it borrowed $32 for every dollar of capital. As I posted last week, Wall Street grew fat on fees by creating markets like the $6.1 trillion collateralized debt obligation (CDO). And since investment banks have a mere $280 billion in capital and hedge funds have $60 billion in capital, if Wall Street had bulked up its books with those CDOs, it would take a mere 6% drop in the value of those CDOs to wipe out that combined $340 billion in capital.

I don't know whether the U.S. government has enough money to bail out all those bogus bets. So while New Yorkers will see the value of their real estate decline, the U.S. could end up going into the financial tank trying to bail out the industry that employed a third of them.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.