WallStreetOasis.com: Spring 2008 Newsletter

WallStreetOasis.com — Mon, 12 May 2008 08:39:15 -0400

Dear Fellow Primates,

ATTENTION: Click here to register/login and gain access to the NEW 2008 Compensation Database for Finance Professionals! (preview image below)

The database is available free for any registered members once you log in. Once you are registered (takes less than 1 minute), you can find the database here: www.wallstreetoasis.com/compdb-2008 ...enjoy!

This version is much more extensive than the last compensation database. Along with Investment Banking salary and bonus figures, we also have Private Equity, Sales & Trading and Consulting compensation data. Each industry is broken down by average base and bonus and by position (where there was a sufficient sample size). Please help us grow the WallStreetOasis community by spreading the word and forwarding this newsletter on to your friends and colleagues.

Word Problems for Future Hedge Fund Managers

WallStreetOasis.com — Thu, 08 May 2008 16:33:10 -0400

Here is a humorous post from Timothy McSweeney's blog by Bob Woodiwiss: http://www.mcsweeneys.net/2008/5/7woodiwiss.html

Elementary(AGES 5–10)

1. Dick has $1 million. Jane has $1 million. If Dick and Jane both give their $1 million to T. Boone, how many millions will he claim he can turn it into?

2. On his way home from school, Kyle stops to buy a candy bar. It costs 69 cents. How much change should Kyle get back if he pays for the candy with a $1,000,000,000 bill?

3. Among those earning 10-figure incomes, Mr. Soros's total annual compensation is greater than Mr. Falcone's. Mr. Falcone's is greater than Mr. Griffin's. Mr. Griffin's is smaller than Mr. Soros's, and Mr. Paulson's is greater than Mr. Soros's.

In descending order, list the men by the respective hotness of their trophy wives.

4. A hedge-fund manager gets up at 5 a.m. It takes him 12 minutes to shower, 8 minutes to get dressed, and 20 minutes to eat breakfast. How big is his domestic staff?

The Weekly Oasis: Issue #5

WallStreetOasis.com — Thu, 01 May 2008 14:05:31 -0400

You've heard of Webcasts and Podcasts...welcome to Cubecasts. From our cubicle to yours, here is Issue #5 of The Weekly Oasis, a newsletter in which Bankerella shares her views on market events, financial news, and things of interest to everyone from gorillas to prospective monkeys.

Close door, open window.

It's a perennial rule of Wall Street that if there's blood in the streets, somebody's making the most of it. As the job toll from the credit crunch rises to 40,000, companies like Pimco are stepping into the gap in the hopes of picking up the sort of skilled candidates that, until recently, were hard to lure away from big banks. And they're not the only ones: according to several of our recruiter acquaintances, smaller firms are casting broader nets in the hopes of catching some of the outbound talent. If you're affected, it's a great time to ask yourself not just "Must I bank?" but also, "What do I really want to do?" Since many firms are (paradoxically) more accessible now than a year ago, it might be a good time to check out niches of the industry you've wondered about but never pursued. Got jobs? Need a job? Visit us at http://www.wallstreetoasis.com/jobs.

Fire sale at the Federal Reserve.

On Wednesday the Fed cut rates by another quarter point to 2% -- lower than they've been since 2004. Year-to-date, prime rate cuts have been bigger and faster than they have for decades. The market response was initially enthusiastic but flagged by day's end on concerns that this cut would be the last for a while. The Fed's language hinted that more cuts might not be needed, but unfortunately it sounded to much of the market like more cuts might not be possible. And that's a fair concern. Bernanke's (and our) problem is that money can't get much cheaper without causing a slew of undesirable effects, so at a certain point we can't rely on the Fed for stimulus any longer.

Hot thread this week on WallStreetOasis: Taking breaks at work.

You do it, we do it, everybody does it. Find out what your fellow monkeys do at work to decompress, relax, or just wait for senior guys to get their acts together. Sure, you could check your comps for the fourth time, or try to fix that annoying pixel problem on the last graph in the 80-page book that nobody's even going to crack at the meeting. But have you ever wondered what the guy in the next cube is doing with his downtime? Check it out on WSO. And here are two words of wisdom to live by, fellow cube-monkeys: Alt-Tab. Do it early, do it often.

The Weekly Oasis: Issue #4

WallStreetOasis.com — Thu, 24 Apr 2008 22:55:25 -0400

You've heard of Webcasts and Podcasts...welcome to Cubecasts. From our cubicle to yours, here is Issue #4 of The Weekly Oasis, a newsletter in which Bankerella shares her views on market events, financial news, and things of interest to everyone from gorillas to prospective monkeys.

Google Versus the World

There's been a lot of talk out there recently about whether we are or aren't in a recession. Jason Schwartz at Seeking Alpha makes some strong arguments for positive sentiment, among them the recent good news from firms like Google, IBM, Ebay, and Intel. Remember the flap about Google? A couple of months ago everyone was concerned about their paid click rates. The stock entered a freefall. Investors began to draw parallels between Google's flagging click rates and the world's consumer confidence. When Google surprised everyone (except the insiders) by announcing strong earnings, the market realized that they'd put too much confidence in the reporting firm that measures internet click rates. Turns out that Google had been taking steps to make its experience more user-friendly, including reducing accidental clicks and targeting ads more tightly. CEO Eric Schmidt said that it was a step towards quality of ads over quantity, and that revenue per click would rise. Can you say "Oops"? The upshot is that the economy isn't as transparent as we pretend it is, particularly when we can't trust the reporting. Proof: Bernanke.

On that note...

The Fed is likely to cut rates by another quarter of a point next week. Will it help? Tough to say, but either way Bernanke's going to keep taking a lot of heat. Just remember: it's easy to expect that our economy will be run like a highly-responsive precision machine, but it's actually more akin to driving a giant barge with an undersized outboard motor and only a rear-view mirror to guide the way. The throttle only has two directions, the current is unpredictable, it takes forever to get up to speed, and too much (or too little) momentum is a killer. Let's all take a moment and thank Bernanke for doing a tough, thankless job very well........ Yeah, okay. That's long enough. Moving on.

Gas-guzzling, nearly-insolvent airline seeks same for LTR

Call me pessimistic, but this merger has got trainwreck written all over it. Or perhaps planewreck. Delta and Northwest each posted massive losses today (for a combined $10 billion) as they continued on the road to completing the merger that formally announced on April 15th. And the market's not happy about it, at least according to the stock prices. It feels exactly like when your alcoholic college buddy meets your neurotic female coworker at the office Christmas party, sparks fly over the punch bowl, and the next week they're getting married in Vegas. You want to be happy for them, but there's only one way for it to end. And it ain't happily ever after.

Must I Bank?

WallStreetOasis.com — Wed, 23 Apr 2008 11:57:05 -0400

A great article from the WSJ that I think should be required reading for WSO monkeys.

Must I Bank?
By JONATHAN A. KNEE

April 23, 2008; Page A15
When the music of financial-services contraction stops, there will be a lot of investment bankers without seats. Merrill Lynch alone recently said it would lay off another 2,900 people, on top of the 1,100 jobs already eliminated this year. The total number of eliminated banking jobs is likely to dwarf the 90,000 over the two years following the Internet bust of 2000.

For many of these bankers, getting fired could be the best thing that ever happened to them.
Rainer Maria Rilke, in "Letters to a Young Poet," offers some words of wisdom that the newly jobless would do well to consider: "This most of all: ask yourself in the stillest hour of your night: must I write?" Rilke warned of the hardships of his chosen craft, arguing that if the poet could even imagine living without writing, he would be better off doing so.

The Weekly Oasis: Issue #3

WallStreetOasis.com — Thu, 17 Apr 2008 22:58:53 -0400

You've heard of Webcasts and Podcasts...welcome to Cubecasts. From our cubicle to yours, here is the third edition of The Weekly Oasis, a newsletter in which Bankerella shares her views on market events, financial news, and things of interest to everyone from gorillas to prospective monkeys.

The Cost of Credit

Today Citi announced another loss -- $5.1 billion on top of last quarter's $9.8 billion, nearly all of it a result of credit and real estate. In response, Vikram Pandit's is expected to cut 9,000 jobs at Citi in the next few months on top of the 4,200 already announced. Some analysts are predicting total job cuts at Citi rising as high as 25,000 in the next few quarters. On Thursday, Merrill Lynch reported a $2 billion loss and said it would cut 4,000 jobs, many from its S&T and IBD divisions. At JPMorgan the cost is estimated at over 10,000 jobs, mostly from its purchase of Bear Stearns. What's the total job toll of the credit crunch? This week's news brings it to over 40,000. All you aspiring monkeys out there, don't panic: there's always room for the best and the brightest, and hiring is continuing, albeit at a reduced pace. Since we've got new jobs posted all the time, check out your alternatives in venture capital, private equity, hedge funds, wealth management, and consulting at WallStreetOasis.com. ...And if you're preparing for interviews, check out what other monkeys are saying this week about interview brain teasers here.

Blandest brand?

Nearly a year after Citi's quirky red umbrella was replaced by a bland red arc, it has been returned to service under its original owner, Travelers, where it will once again symbolize the comfort and security of insurance rather than... well, whatever it was supposed to symbolize under Citi. Are Citi folk tired of their new uber-corporate logo yet? When asked for her opinion, one analyst at 388 Greenwich, Citi's investment banking headquarters, said, "The biggest loss is honestly the umbrella out front." The iconic 16-foot sculpture provided shelter in front of 388G for generations of bankers while they waited for black cars, gossiped, or took a much-needed break from work. Our analyst contact's biggest complaint, however, is that "now there's no place to smoke." Maybe next year there'll be a line in Citi's shrinking budget for a shed out front. Fingers crossed.

New Training Partnership

WallStreetOasis.com — Sun, 06 Apr 2008 21:10:14 -0400

It has been a while since my last blog post but I wanted to announce WallStreetOasis.com's new partnership with The Analyst Exchange, a one-on-one training program to develop the necessary financial modeling skills to break into investment banking and private equity.

The reason I went with these guys is that their courses are extremely thorough and i am a strong believer in their model of 1 on 1 training for the best learning experience. As part of the partnership, WallStreetOasis.com members can save money by purchasing the courses through here: http://www.wallstreetoasis.com/training-basic-plan

The basic plan is great for summer analysts and new full time hires to prepare for their new career, the Interview Prep is great for students trying to prepare for the recruiting process: http://www.wallstreetoasis.com/training-interview-prep

After personally having gone through the materials in detail I can honestly say that this would have been a huge help to me before i started my analyst program back in 2002 (especially coming from a liberal arts background).

If you're looking for training or to sharpen your modeling skills and understanding of the 3 statements, merger models and LBO models, etc. I really think this program is extremely thorough and you have the added guidance of an instructor (1 on 1)to make sure you understand every detail / concept. The instructors work with you to make a plan that fits into your schedule and all of them are super accomplished. (see bios below) if you have any question you can e-mail info@theanalystexchange.com

The Weekly Oasis: Issue #2

WallStreetOasis.com — Fri, 04 Apr 2008 01:11:38 -0400

You've heard of Webcasts and Podcasts...welcome to Cubecasts. From our cubicle to yours, here is the second edition of The Weekly Oasis, a newsletter in which Bankerella shares her views on market events, financial news, and things of interest to everyone from gorillas to prospective monkeys.

Last week we reported that many brokers currently at Bear Stearns would receive large retention bonuses and suggested that the handshake wouldn't be quite as golden for those in banking. We also asked you to let us know how the transition was treating you, and you did -- turns out that the message is "goodbye" rather than "welcome" for many of Bear's incoming analysts and associates. Check out members' responses here. As several experienced members pointed out, this is why it's not the end of the world if you have to reneg on an offer: at the end of the day, business is business.

You heard it here first.

Remember our comments last week ("Grounded!", Issue #1) on the potential for the return of Glass-Steagall-flavored regulations? Well, sometime over the weekend, it looks like Hank Paulson went from saying that permanent Fed oversight was unnecessary to calling for a sweeping regulatory overhaul... with the Fed, of course, playing top watchdog. Since we saw the writing on the wall last week, we weren't surprised when we opened the WSJ on Monday morning. What is surprising is that it didn't take long for the subtext to go from "This is just going to be temporary supervision," to "It's gonna take years to even get this thing off the ground." It's great to see that the Fed can be nimble and responsive, but the mixed messages can't be doing the market much good.

We're sorry we lost your money. Can we have some more?

UBS and Lehman have stumbled across an interesting solution to the sagging price of their stocks: issuing more of them. On Wednesday, the two banks announced they would raise additional capital despite the bumpy downhill ride their shareholders have experienced recently. Ironically, it worked: UBS and Lehman both experienced 15-18% surges in stock price. Now let's flash back to Corporate Finance 101: in a normal world and a normal market, unless a stock's fundamentals are rock solid and the market's strong, issuing more stock will typically exert a downwards pressure on the stock price. That downwards pressure would be magnified by downside risk involving the value of the stock... such as looming UBS writedowns and a shaky market. So why did Wall Street respond with this (dare we say irrational) exuberance? Your guess is as good as ours. But if anyone's got some extra capacity over the weekend, give us a call... we've got a bridge in Brooklyn we'd love to sell these shareholders, and clearly it doesn't take a very compelling pitchbook to get them to buy in.

It's been a good run

WallStreetOasis.com — Tue, 01 Apr 2008 00:57:23 -0400

I must admit its been an amazing couple of years watching this site growth in front of my eyes. Unfortunately all good things must come to an end. With that being said I am sorry but effective Monday, April 14, 2008 Wall Street Oasis will be going offline, indefinitely.

The Weekly Oasis: Issue #1

WallStreetOasis.com — Thu, 27 Mar 2008 22:55:38 -0400

You've heard of webcasts and podcasts...now, welcome to cubecasts. From our cubicle to yours, here is the first edition of The Weekly Oasis, a newsletter in which Bankerella shares her views on market events, financial news, and things of interest to everyone from gorillas to prospective monkeys.

Ka-ching!