What was it like working in finance when the Crisis hit?

I was at Bear and Lehman in 2008

I was working at an investment bank in Charlotte during the crisis. I'll always remember the day that Wachovia failed and it was announced that Citi would be buying them for $1/share. Wachovia and Bank of America are the two largest employers in Charlotte and employ probably 60%+ of downtown residents, so it rocked a lot of people. I remember walking to work and it was as though a pall had descended on the city. It was eerily foggy, and there were tons of people (presumably Wachovia employees, but the BofA people were pretty shaken as well) just shuffling to work in kind of a daze, just shell shocked.

During the fall of 2008, not a lot of work got done. There were days when we all just sat there refreshing Google finance watching the Dow crater by 500, 600, 800, 1000 points in a day. Refreshing WSJ.com to see if our bank would be the next one to fail. It was unreal.

As I walked on the trading desk at 7.25 am you expect a certain amount of noise or "buzz" that was gone. 12 hours prior every firm pulled out credit and the phones stopped ringing. That has been the most uneasy I have been in my career, seeing traders doing nothing. No trading happening in a trading firm. I didnt know if I was going to lose my job or who would buy us but I know my department was profitable. I was not upset but felt let down by the machine that printed money.

It was honest to god depressing. Watching your friends and coworkers get laid off left and right was scary. I was in a product group so we sat on a trading floor and it was deathly quiet for awhile with everyone's eyes glued to CNBC.

Wow....I can't imagine going through that.

I was at a custodian bank that got TARPed, covering money market funds owned by AIG. My two main fears were that our funds would break the buck (I had a lot of extra work until the whole mark-to-market regulation issues were resolved) or that AIG would sell their asset management to someone who used a different custodian. Part of me didn't mind getting laid off because I hated my job (still do), but Fall '08 was not a good time to be losing one's job.

Ultimately, I mainly remember thinking there goes my chance at getting into an FO role for a very, very long time.

edit: Wildest moment was seeing our bank's stock go down 50% in a couple hours before the CEO released a statement saying we had no material RE exposure and our stock ended up down 10% for the day.

Illini, your post should be a mandatory read for all incoming analysts, especially those planning on living paycheck to paycheck and spending bonuses on watches in their first couple of years.

Live frugally, build a cash cushion and you will sleep a lot better at night.

I was in London the day Lehman filed for bankruptcy, and it was surreal watching the huge crowd gather in front of the Lehman building in Canary Wharf and have their farewell drinks. (I had drinks with my colleagues as well)

I worked with a European bank which was bailed out. We had two rounds of layoffs, and it was heart wrenching to see people being called into a room, and not come back to the desk. We had quite a few farewell kind of meals with my friends and colleagues.

And then just before the third round of layoffs I was called in by my team's MD (who we knew was going to be laid off the next day). I was VERY confident that I would survive, so when he forewarned me that I was in the list of people who were out the next day, I practically could feel the ground give way from under my feet. But at least due to his warning I could gather my stuff and be prepared for the next day.

The next day, was called into a room with the head of the broader team, and the letter from my company was there on the table and I could just read the word "regret". Long story short, I was in a different country, had to worry about my visa, had to worry about the rent contracts etc. Lost a lot of weight in one month; desperately got in touch with a HUGE number of people for contacts - the fact that I got the news on 17th Dec (2008) did not help. Though I was technically unemployed only for two weeks after my garden leave (new job started on 1st Feb 2009). Luckily, got my present job, which was better paying and way better experience

deal activity in the leveraged finance/ mf private equity world pretty much ground to a halt, starting before late 2008.

i spent the time bored to death until the market volatility got really crazy in late 2008 and then i started day-trading like a mofo with my saved bonus money. it was great...felt like i was in vegas every day. the market would just start moving and then the dow would end up +/- 300 points by close. after a while and a few big loss days, I realized I was on my way to becoming a gambling addict and I finally quit and just dumped my money into some index funds. came back to haunt me when H&R block refused to do my tax return because of all my trading activity...hah

It wasn't that horrible for me. I wast at a MM PE firm that had some dry powder left in its fund, which we used to fund companies that suffered in the crisis and couldn't get credit. We stopped looking at new deals though, because that money was needed for existing portfolio companies. We were assured early on our jobs were safe so I wasn't worried about that. I guess it helped a lot that I wasn't in NYC (where everyone works in finance) and the city I lived in was conservative and didn't suffer the housing bust either.

I remember texting a buddy at Bear IBD as rumors about the company began to swirl on Monday in March (stock was in the 60's that day). He hadn't heard anything at the time. A day or so later was Schwartz's infamous CNBC interview...and then it was off to the races.

haha yes. i remember when i was talking to a few 2nd and 3rd years who assured me that "analysts wouldn't get laid off." Awesome. There's something particularly heartwrenching about watching grown men cry and pack up their desk.

NYC sux

wow, IP, you shit should be required reading.

however during 2008 is when i made 1) the most money and 2) the most advances in my career... it sucked but end of the day i make it out okay

So I gotta ask, what would you guys say was the difference between the guys that got fucked up by the crisis and the guys that made it out just fine? Obviously a blanket question, but would love to hear some opinions nevertheless.

i was early in my career and in my eyes cheap.. some of the people doing my job but more senior were let go

I remember coming home from class and looking at my brokerage account (I had a little money invested just to get my feet wet) and watching the current prices of GS =$49 AAPL =$67 BAC= $4 and some other unbelievable deals. I had about 8 Grand in cash (savings, bday money, and money from parents) but I was young nervous and didn't buy anything......HUGE REGRET!!

I started working in July 2008, not in NYC, and my boss thought it would be a great idea if I wrote brief market memos each day for the partners. I loved spending 30 minutes to an hour each day just totally absorbed in the markets: CNBC, Bloomberg, WSJ, Dealbook, etc... It was fun up until Lehman went under. It was so depressing to write market memos each day after seeing the market crater day after day.

Bear, WaMu, Fannie, Freddie, Wachovia, Lehman, etc... I remember buying some call options, just a couple of OTM contracts, on Wachovia the weekend before they were sold. And then there were the 3X financial ETFs that became pretty popular as well. 2008 sucked. I learned a lot from it though.

Great post IP, too many kids my age don't value a lifestyle within appropriate means. Maybe it's the ones who go through school paying their own way who have a more frugal mindset, but the fact that I stand to make six figures all-in doesn't mean I spend all of it.

Also: listened to that audio, craziest thing I've ever heard.

I was at a meeting with one of the CDS traders at one of the banks that doesn't exist anymore. Their high yield desk was my customer and I wanted sell the CDS guy on why he should be my customer as well. I walked on to the floor and it was insanity. He came up to me and said, "We're fucked and I don't think we're going to have a job tomorrow". He was right.

I walked back to my office and for the next month watched Armageddon manifest. Stocks were ticking in dollar increments. LEH was at $30 or so and I bought puts and within a day it was down to $17 and I sold out. I thought that was a great trade until LEH went bust and I left a ton on the table.

I remember when TARP was initially struck down and the Dow went -700 and I was shitting myself. Instinctively, I knew everything was just under tremendous pressure and the companies were still worth something. I wanted to buy in so bad, but I was thinking people act irrationally and they could really bust the system. So much stuff was happening that you would NEVER suspect to happen and a part of me really thought, "Wow, the system may break". Credit was locked up. NO ONE was rolling overnight paper. Repo desks were scrambling to roll their paper and no one wanted it. Spreads blew out to levels suggesting the one thing that our entire industry is based on, despite ALL of the technology and modernization, is TRUST. It simply came down to this simple point: No one trusted that their counter-party had the balance sheet that they claimed and the credit market seized.

It was quite an experience.

I had my first day as a graduate on the Friday before Lehman went down on the Monday - was surreal not knowing which elements of people screaming, clients on the phones panicing and trying to sell all their holdings in a day were nromal! As for me, I sat and did nothing for three weeks - no one had time to say shit to me so I just sat there and prayed that they wouldnt sack me (no notice period whilst on probation). The crash has made me a more conservative investor, i didnt live through the euphoria of 2004-7 and so have very little perception of making 'easy money'...

Seeing large numbers of people made redundant was pretty traumatic to be honest, pregnant women, guys with 3 kids, guys in their 50's with middle management jobs - 30% of all staff gone in one day!!!!

I was a prop trader making it rain and every day was printing beaucoup dollars via keyboard. I was deathly ill with a hardcore case of bronchitis in October 08 but still came in because the money was ridiculously available. The amount of volatility that we saw then was ungodly and things would sell off massive and I mainly trade contrarian so all the giant ricochet bounces were delicious. We took a field trip up to Bear the day it turned JP MoMo prior to that as well.

And I'm sure I sound like an asshole now for all this but that is what it was like for us. A girl who works in our building said to me in the elevator, "things must be really crazy and tough for you guys right now!"and i gave a wide eyed reply of "no, its fucking awesome!" and then got off the elevator to go make it rain more.

It's amazing it was more than 2 yrs ago. My colleague who also traded with me left on his two weeker the thursday before lehman. he thought the fed would bail out lehman and bonds would sell off...thank god we reduced that position. the weekend was brutal. I think i was in at 4 am that monday and most of the days that week.

the rest of late 08 and 09 was rough. my personal accounts tanked. we had layoffs going down month after month....and I definitely thought I was on the chopping block, though luckily my book cant simply be flattened like an fx spot book. there was a point where we just wanted to extend our employment long enough to get to the rumored base raises so our severance would be calc'd off the higher amount. I wasn't wondering about how to pay the rent but i was wondering about how or why i'd ever get married and have kids if i couldn't get similar employment as it seemed like the whole industry might disappear. I still think you'll see a trend to get married later and have fewer kids for people who were in their 20s and 30s in the late 2000s

there came a point about 3 months after the layoffs started where a bunch of us internalized and said "fck it, I they get me they get me". that's the most valuable thing i took from all of this...I no longer have a "fear" of being laid off. A dose of skepticism about this industry prevailed and people internalized that it can all go away, and have prepared and come to terms with that.

save your money kids...I have friends who were on the bench for 12-18 months. some have exited the business. build yourself a cushion, and you'll sleep better.

wow, just read this thread. Thanks for sharing guys, very interesting.