The tidal wave of bad finance news is freezing credit availability and battering investment portfolios, but a more human toll is almost certain to follow.

In the financial services sector, which already has pared more than a quarter-million jobs since the beginning of 2007, new rivers of displaced workers from Lehman Brothers and Merrill Lynch will cause a job-market flood that Corporate America cannot absorb, and would not even if it could, according to executive recruiters.

Even the news that Barclays Bank could save as many as 9,000 jobs by buying many of Lehman’s core assets won’t do much to lessen the ensuing job-hunting chaos. Even those Merrill and Lehman bankers lucky enough to find a berth at the remaining investment banks are likely to displace younger, less experienced workers. “People are running into each other for the few available positions — it’s a real game of musical chairs, and there’s far from enough seats,” said John Challenger, CEO of Challenger, Gray and Christmas.

Jo Bennett, a partner in the financial services practice at Battalia Winston, said even more pointedly, “The impact to the job market will be terrible. I wasn’t alive during the Great Depression, but other than that this will be the toughest job market [for financial services] in history.”

The most optimistic assessment was offered by Richard Dowd, president of Dowd Associates Executive Search in White Plains, New York, who said, “We don’t have a clue what’s going to happen. Over the 20 years I’ve been in business, none of us [recruiters] has seen what we’ve seen in the past 10 days. It’s very hard to predict what will happen or what it means.”

But it seems likely that in any scenario, many traders and other types of finance professionals who lose their jobs at investment banks will have to dig deep to reinvent themselves by starting their own businesses. That’s because while some may land at other investment banks, few will move to the corporate side, the headhunters told CFO.com.

According to Challenger, Gray and Christmas, financial services firms announced about 103,000 job cuts this year through August, following a record 153,000 in 2007. Recently the pace appeared to have slowed down considerably, with only about 2,200 cuts announced in August. Now, a violent upswing appears to be around the corner.

But corporations typically are reluctant to hire investment bankers. “There is no question about their technical skills,” said Dowd. “One concern is, ‘Will they be happy here?’ A couple of my clients have interviewed some of these people recently, but it’s very difficult to get them over the hump. They’re thinking, ‘Will they just stay until the market turns around?’ “

Even more damaging to investment bankers’ prospects of landing corporate jobs is their often-flamboyant styles.

“You can tell just by talking to someone whether they will fit in,” Dowd noted. “There are a lot of well-educated, smart, incredibly talented people in investment banking, but sometimes they are quite taken with themselves.”

They view themselves as stars, and most corporations don’t want stars, according to Bennett. “They have created a mystique about their style; they are cowboys,” she said. “They would find corporate life to be a tough adjustment. Being collaborative is foreign to their experience. And the behavior of the typical investment banker usually is not the kind of behavior that’s rewarded by Corporate America — very aggressive, chest pounding, going for the deal at all costs.”

Some companies may take an opportunity to bolster their corporate development or corporate strategy departments, Bennett added, but likely only with one or two new people, not hundreds. Career investment bankers may not be interested in such jobs anyway, because they’d be paid a pittance compared to what they were earning previously.

“I don’t think you’ll see Corporate America absorbing these people,” Bennett said.

Many investment bankers have strong capital-raising skills, but overall, that’s “not going to make much of a difference,” said Challenger. “Those skills are very specialized, not broad-based.”

Of course, many investment-bank employees are not traders. Those who work in the banks’ internal accounting and finance departments have not yet started showing up in the job market in large numbers, observed Todd Monti, who heads both the financial-services CFO practice and the private-equity practice at recruiter Heidrick & Struggles. And they may not start showing up for quite awhile, he added — but when they do, they probably won’t have a hard time finding work.

According to Monti, there is a common misconception about what talent is coming out of Bear Stearns, for example, and what can be expected in the foreseeable future in the case of other downsized investment banks. So far, he said, the cuts generally have been within what financial services firms call “the front office” — revenue centers such as leveraged finance and M&A services — because of the sharp decline in deals.

Back-office accountants and finance-workers have not yet felt the ax. “The internal finance organizations are already lean, and the role they play is critical,” Monti said. “At many financial services companies, finance is decentralized, with accountability both to the parent company and to the business lines. Cutting these professionals or moving to a centralized model too quickly in this environment would create unneeded risk that many firms can’t afford to take. Even at the firms that are succumbing, it’s not as if there’s a line of people reporting up to the CFO who are out of work.”

Either way, they don’t have much to worry about when eventually they too are let go, according to Monti. That’s because within Corporate America, demand for accounting and finance talent is far ahead of supply. “Many of those who are displaced should be able to find employment,” he said. “There is such a supply-demand imbalance.”

That goes right up to the top level of the finance organization. “Talented CFOs and people who report directly to CFOs are very much in demand,” Monti said.