Shock and Awe vs. Forward Guidance... role of forward guidance in steering monetary policy and subsequently consumer/business expectations had emerged to be of primary importance as the FED struggled to cope with economic downturn witnessed at the aftermath of the financial crisis. With interest rates hovering about the zero lower bound this was the only channel of formulating short term rate expectations and by iteration long term rate trajectory.

However with the US continuing to move on a sustainable growth trajectory amidst global imbalances, the role of forward guidance in moving the economy from artificially low interest rates might be nearing its end. The debate of conducting monetary policy via commitment as opposed to ‘time inconsistency’ is an age old one with commitment winning by delivering the same output growth as compared to time inconsistent policy however with lower inflation. Forward guidance can be viewed as an offspring of the policy of commitment.

While economists have always advocated the policy of commitment, the relevance and effectiveness is challenged by the present global economic scenario. With impeccable technological progress ushering in an era of ‘productive disinflation’ (like development in horizontal fracking technology leading to lower oil prices). Price dampening of this kind can coexist peacefully with stagnating wages while simultaneously improving consumer welfare and perhaps lowering long term inflation expectations.

Market Commentary by: James Investment Research (3/23 - 3/27)

Stock Market Analysis

Last week stocks sagged with nearly 1,200 advancing against about 1,700 declining. Volume mostly declined on the pullback, but when stocks tried to rally Friday, volume fell off sharply. New highs were achieved by 367 NYSE issues, only 77 set new lows. Notwithstanding the relative number of new highs, it was, on the surface, a discouraging picture.

Margin debt declined again, and so did customer free credit, both thought of as negatives. Overall, the entire economic picture includes element of weakness as well as strength.

Good Lines to Meet People

I don't have a problem approaching people I don't know but want to meet. I am lost for words and I don't know how to initiate the conversation. What are good lines to say to people and also to keep the conversation going?

BIG NEWS: 2014 WSO Compensation Report is OUT!

Dear WSO Community,

I'm pleased to announce the release of the 2014 WSO Compensation Report! We had another great year with even MORE entries than last year (over 5,000)! It took many months of hard work and finally, it's here ...and it's still free :-)

Yes, that's right, access to the FULL 155 page 2014 WSO Compensation Report is 100% free. (up from 108 pages last year). This report contains thousands of data points across investment banking, private equity, hedge funds and management consulting.

The report cuts the data numerous ways including division, city, AUM and company type and can help you know if you are getting paid enough. In the 2014 version, we even have data on target vs. non-target schools, race, GPA and major. Where else can you find interesting insights like that?

Or if you are an employer, this report will give you an idea of what range you should be paying your employees.


Here's how you get access to the full 155 page report:

I miss the 90s/ early 2000's

That was, in my opinion, the GOAT time period for music:
- Incubus
- Staind
- Vertical Horizon
- Linkin Park
- Puddle of Mudd
- Nirvana
- Red Hot Chili Peppers
- Lenny Kravitz
Every time I just lay back and listen to any of the above I have an eargasm.

Post your favorite 90's bands and songs!

Is Private Equity Dead?

Andy Kessler, a former Hudge Fund Manager who writes periodically for the WSJ has recently discussed his thoughts on the future of Private Equity. This article discusses how the industry is overflowing with hundreds of firms chasing after the same opportunities such as how will interest rates affect the future of these firms? "Leveraged loans are the lifeblood of private equity," says Mr. Kessler and seeing as most firms borrow the majority of the funds.

Then add the potential of tax reforms to the scenerio that place interest rate deductions on the chopping block and then we lose one major benefit of debt, tax deductions on interest payments, for these firms. In the words of Mr. Kessler, "the interest-tax symmetry is long overdue and makes enough sense that it could end up in future tax reform." He goes on saying that Private equity has actually been hurting the economy and that the future will show that Private Equity will not make it in the end. So how solid is Mr. Kessler's arguement? And are you setting yourself up working towards a job in Private Equity? The answers to those question will unfold in due time so then I will end with his last statement,

The GM Buyback: Beyond the Hysteria!

Here is a script for a movie about the evils of stock buybacks, with the following players. The victim is an well-managed company in a business with significant growth opportunities and profit potential. The company has delivered products that its customers love, while paying its workers top-notch wages & benefits and invested heavily and prudently in its future. The villain is an activist investor, and for added color, let's make him greedy, short term and a speculator. In the story, he forces the  company to redirect money it would have spent on more great investments to buy back stock.

The white knight can be a regulator, the government or a noble investor (make him/her successful, wealthy and socially conscious, i.e., Buffett-like) who rides in and saves the hapless company from the villain and stops the buyback. The story ends happily, with the defeat and humiliation of the activist investor, and the moral  is that stock buybacks are evil (and need to be stopped). As you read some of the over-the-top responses to GM's buyback, such as this one, you would not be alone in thinking that you were reading about the mythical company in the movie. But given GM's history and current standing, do you really want to make it the basis for your case against buybacks?


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Depending on the function you are assigned to, you could play a role in charting the course of vessels carrying up 160,000 tonnes of product, given the responsibility to manage the price risk on cargoes worth over $40 million or even put in charge of financing multiple deals at one time with a combined total worth of over $400 million. There is no shadowing or making tea. From day one you will be a part of the team and expected to contribute as such. You will be supported fully throughout the programme to ensure you learn and progress as quickly as you can.

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"RBS Is Going To Go Ahead And Take Those First Year Job Offers Back"

Ouch.... Will this happen at any other banks or just RBS? Anyone personally affected by this? Is RBS a sinking ship?

From NYT Dealbook:

“Hearing from incoming summer analysts (now soon to be full-time hires) that their offers were rescinded and they were all given a 10k severance. This is the case for all incoming analysts in IB at RBS.

Small PE Firm or BB IBD

What is better? I want to end up in PE, but don't know if starting with a PE firm with under £250 m AUM is too small to start off, or if its better to have a BB brand name in a couple years time...

IB INTERVIEW ALERT: NEW 2014 Version of WSO Investment Banking Prep Pack Released!

Another 100+ Questions Added...Now Over 500+:

We've sifted through 2 THOUSAND+ more questions submitted to the WSO Company Database this past year to make the IB Prep Pack even more killer. We've picked out another 100 questions based on new trends to bring the grand total to a whopping 500+ questions (nothing beats that).

The beauty of how we structure the IB Prep Pack is that both the technical and fit guides walk you through the most common beginner, intermediate and advanced questions while also giving you great sample answers. On top of that, we now also provide you with a MASSIVE appendix with the following banks below that allows you to see the type of interview questions being asked at various levels AT SPECIFIC FIRMS.

No other guide gives you a great foundation AND great company specific insight, so don't miss out before we bump the price!

Get the NEW IB Prep Pack Today


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The WSO Finance Resume Review service is an investment that will help you make that important first step to land the most coveted jobs on Wall Street. Our track record is flawless and we promise to give you a tailored experience in order to help you craft the best possible application.