These are strange times in the topsy-turvy world of Wall Street. Car bumper stickers around New York proclaim, with some irony, "We're all socialists now." Gone are those heady days of $25,000 chocolate sundaes and $100m penthouse apartments, of onsite psychoanalysts for investment bankers and inhouse masseurs to help twentysomething millionaire financiers cope with lifestyle stress. The irony of course being that for most people employed – or soon to be unemployed – on Wall Street, the stress is only starting. But you can never find a Philippe Starck-designed, leather upholstered crying room when you need one. The Second Gilded Age has come. And gone. Not with a whimper but a big, shuddering bang.

And yet a strange air of defiance has hung over lower Manhattan throughout the turmoil. There is gallows humour aplenty in fabled Wall Street watering holes like Harry's at Hanover Square where young Turks joke about partying like it's 1929. REM's 'It's The End of the World as We Know It' seems to boom from every jukebox in the city. And despite or because of the month-long rollercoaster ride that was Black September, the shell-shocked financiers continued to order round after round of drinks, in between hugs and back slaps and exhortations to hang tight. In the $14 martini bars and $1,000-a-head restaurants that have fed off the Wall Street boom, "bottoms up" never sounded so heartfelt.

But a few blocks away, Lehman Brothers had become a ghost building, as workers cleared out the last of the office detritus. There were echoes of Enron as employees defaced a poster of Lehman Brothers CEO Dick Fuld with angry messages. But the poster too has gone, snapped up apparently for $10,000. Who says the era of capitalism is over?

Initially, the financial world responded to the proposed bail-out plan in much the same way as a lunatic hell bent on suicide would to his rescuer. It chafed at the prospect of a federal strait jacket but the alternative leap into the abyss didn't look so attractive either.

There was a sense on Friday afternoon that all of New York was holding its breath. On Times Square pavements were seized up by thousands of people who stood gawping at the news ticker as the votes were eked out of Congress with what seemed like excruciating slowness. One of the main criticisms of Bush was his failure to communicate to ordinary Americans how an aborted rescue plan would affect them, but with credit-card limits being arbitrarily halved, credit lines being cut off for small businesses and lay-offs hitting the city, it seemed the message had finally hit home.

By Friday lunchtime, Wall Street was the scene of giddy euphoria again as it became clear the slightly revised package was expected to pass. The Dow Jones industrial average was up more than 250 points before the vote even began, and it advanced to more than 300 points higher a few minutes into the count.

The city that never sleeps is notoriously resilient but coming almost seven years to the day after 9/11 the parallels are all too obvious. Whether or not the bail-out that became law on Friday afternoon proves effective – and it raises more questions than it answers – the earthquake that struck Wall Street has forever altered its landscape. Every major investment bank has gone. Merrill Lynch was sold under pressure to Bank of America. Lehman Brothers filed for bankruptcy. Goldman Sachs and Morgan Stanley became bank holding companies in order to stay in business. And earlier this year Bear Sterns was snapped up by JP Morgan Chase.

And what about Manhattan? Can the city survive a financial 9/11, its second devastating blow in seven years? Financial sector workers account for just 12% of New York jobs but their salaries account for almost 40% of its pay. Wall Street workers make more than double what they made when Ronald Reagan was president. The United States Department of Labour estimates that since the start of 2008, Wall Street has lost 10,000 jobs with as many as 40,000 more likely to disappear before the end of the year.

New York's mayor Michael Bloomberg, himself no slouch when it comes to turning a billion or so bucks, has often said Manhattan's economy is sufficiently diverse through tourism, manufacturing and other businesses that the city had reduced its dependency on 'the fortunes and failures' of Wall Street. Aside from the Garment District and the sweat shops that churn out Gucci and Prada knock offs, manufacturing has never been a big Manhattan generator of wealth. Even the crystal meth labs that boomed in the '80s have dwindled, although they can't blame this one on China. But tourism. Now there's another story.

Thank god for tourists. Those ridiculous rubber-necking, map-clenching, pavement-clogging cash-dispensing machines. Once New Yorkers despised them as suckers who couldn't tell Patsy's from Pizza Hut. They snarled at them when they asked for directions to the Statue of Liberty and shoved them out of their way if they had the temerity to sully their local haunts. But no longer.

As Manhattan reels from the impact of Black September, they have lately come to appreciate their value; about $30bn, to be precise. For that kind of chump change, Manhattan dwellers will take their photos in front of any landmark they want. And they'll even give them their cameras back.

In 2007, 48 million tourists visited New York leaving $28bn behind in small change and tchotchkes they snapped up on street corners. That seems like a lot of money to bring into a city – until you remember Wall Street paid itself $33bn in bonuses at the end of 2007 – even as the financial services sector ship was sinking.

But as Wall Street's fiscal Armageddon subsides amid a frenzy of federal activity, New Yorkers are starting to realise that, unlike the rich, the tourists will always be with us. And right now tourists are looking a much safer bet than investment bankers.

Even as Wall Street was begging for a lifeline, on 17 September the Circle Line – one of Manhattan's most enduring tourist attractions – held a big party to celebrate the launch of its first new boat in 63 years. Financial types might learn a thing or two from the Circle Line's success story. Basics like low overheads, good value and giving the customer what they want. No glass towers. No bonuses.

The launch party seemed like a large celebration for a small boat, but in these gloomy times an excuse to drink champagne in the glorious September sunshine is not to be sniffed at. And so a giant brass band played 'New York, New York', Whoopi Goldberg performed the launch duties and we all piled on board for the banquet.

As the boat circled the lower tip of Manhattan, a small group of investment bankers, suddenly finding themselves with more time on their hands than they could ever have imagined, held their champagne glasses aloft in an ironic toast in Wall Street's direction. "Don't jump!" a glamorous New York matron joked. There were guffaws of laughter but amid the champagne and chocolate-dipped strawberries the old dancing on the decks of the Titanic metaphor came to mind.

If politics is all about timing, then New York mayor Mike Bloomberg seized his moment. The billionaire businessman, who is widely regarded by New Yorkers as the best mayor the city has elected in half a century, put forward his case for changing the law to allow him a third term as mayor. Currently all elected officials are limited to two four-year terms.

At a press conference so crowded, scores of reporters had to watch from overflow rooms, Bloomberg predicted New York may well be on the verge of a meltdown. His announcement was like a new take on the old good news/bad news joke on Wall Street. "The good news is we planned for a slowdown in New York, but we may well be on the verge of an economic meltdown," he said. The bad news is the economy may be heading over a cliff. The good news is he'll stick around to pick up the pieces.