ROWS: Reminiscing Over Wall Street
Reminiscing becomes a bigger part of life as we age. The more miles you have under your belt, the less new experiences there are and the more you think about what has transpired.
What could have/should have I done better? Is this the right path? Where to go from here?
We face these questions every day without even thinking about them, they are as big of a part of us as any arm, leg or lung. We don't usually tend to reminisce over careers and the industries we were in until they are over, however.
In an odd twist of events few predicted and even fewer spoke about, Wall Street has become this sort of industry. Every day it becomes harder and harder to talk about news on the ground.
The glory days seem further and further in the rearview. Reminiscing and talking about "the good old days" has not yet become popular, but I do think that I see somewhat of a Street Nostalgia blooming.
After all, the last two to three years have brought forth changes the likes of which we haven't seen in our lifetime. These changes, though slow and tedious have already and will only continue to change the way finance is done. In the U.S. and globally.
While this musing ran through my head, I ran across this old Leveraged SellOut interview and got to thinking about how much attitudes have changed around these parts.
I'd like you guys to take a quick read and get lost in it for a bit.
Then I'd like you to wake up and tell me where you were on August 27th, 2008?
I don't just mean physically, I mean where were you in your head?
I hope some of the more experienced guys can come out and speak on the subject as I think it would be of use to both themselves and some of the chimps trying to get a foot in the door.
With everything that's gone on in terms of the industry changing, I can't recall hearing too many people speak about how it changed them personally.
The bravado and swagger are certainly gone.
Is the banker now just publicity shy or did his ago go off and die?
I cannot comment because I am just a student, but I wanted to post and say how much I look forward to reading responses.
Still a student here as well, so my experience is limited. But my take is that it's good to have a healthy sense of pride in what you're doing. I emphasize the word "healthy." No one likes working for somebody who thinks his shit doesn't stink. But people forget that this douchebaggery is not limited to finance; it can be found in every field. At my school, the condescending pompousness of some liberal arts majors could give the Leveraged Sellout a run for his money. Because I've never liked that attitude when directed at me, I like to think I've stayed pretty levelheaded. I am proud to be a prospective finance guy, but that's about it.
I'll tell you right now, this is an extremely hard to write something that really captures the state of mind of someone on the street. it's a hard thing to look at this and recall the state of mind you had prior to the collapse of Lehman. As a guy doing Asset Management, my view and mindset were completely different than the bankers. I had to deal with guys wielding the swagger, and it wasn't pretty when the swagger was slowly let out of the room, particularly when you were considered successful to only be down 18% that year.
I can reflect, but neither rose colored glasses or alcohol induced lucidity can really describe the chills in the late summer air as rumors of Lehman swung around while balancing a life and work, the belief that people firmly had that the trouble was over, or at least stable for the moment, and whether things would continue on this way. I mean, Bear Stearns was still fresh in the minds of people, but Wall Street has a short memory. There were still overlying credit issues, as credit was contracting, but it wasn't a major concern as long as people kept doing business. It was a time where, honestly, even the smartest men in the room didn't know where the hell the markets were going and what was going on.
I recall talking with a few of our institutional guys who who had no clue what in gods name would happen if Lehman went under and how bad it would be to markets. Even the rumors of Korea Development Bank still had them spooked. I know people that had assets with Lehman's Prime Brokerage group who were concerned and asked us to set up meetings with our Prime Brokerage guys. I know High Net Worth folks, some with serious financial savvy and some without it, that wanted to discuss what to do with their assets and whether it was prudent to pay off mortgages with capital on hand or keep it in the markets. As a 24 year old, I had no clue what the hell to think as I was going through this blindly. When one client in particular wanted to know what I thought, I took a page from my dad and gave the same advice to clients that my dad gave me on things, in that "You do what ever you need to help you sleep at night". Everyone I dealt with was starting to concern themselves about the near future, as no one knew what was going to happen. Hell, even as a guy with a year under his belt, I was still trying to understand what the hell was going on but couldn't wrap my head around the magnitude of Bear collapsing a few months earlier and then the added possibility of Leham going down. I mean yeah, it was business as usual, but it was the most nervous I had seen business as usual. When nervousness enters into how business is done, it's a sign that the swagger is starting to die if you ask me.
Honestly, I have no idea what was going through my mind, but uncertainty was a big thing. It was just uncertainty in having no clue what would happen and when this crisis would blow over. It was the uncertainty of trying to figure out whether we would see another Bear Stearns fail. It was the simple uncertainty of life coupled with a newfound uncertainty in the work place. When you live in strange times, uncertainty is always in the back of your head.
The fact is, we lost the bravado when Bear was bought out by JP Morgan and it didn't hit the mainstream until Lehman went down. It will be back, swagger is never something that disappears forever, but I don't think the banker as LSO and we all know it will be back. I don't think you will see it for another 30-40 years, when things slowly start to repeat themselves, but you will see it again. It never goes away, it just reinvents itself.
I hope others do comment about this. I'd be interested to hear stories.
+1 SB, not because I am looking forward to it, but because it is a true statement and if more people thought this way society would be less likely to reinvent past mistakes.
My first post for WSO was September 10, 2008. Patrick brought me in to help make some sense of everything that was going on.
I remember being really stunned at the brass balls of the banks at that time. It was reminiscent of the Long Term Capital Management mess, only on a far greater scale and there was none of the humility of LTCM when it came to the bailout. In 2008, the banks just took this stance of, "You have to bail us out. Letting us fail is not one of your choices." That was pretty hard for me to accept, and remains so to this day.
I was also really stunned at the structure of TARP. They simply pulled the $700 billion figure out of their asses (which Treasury has since admitted), and then Bernanke co-opted the whole thing to engineer a straight giveaway to the banks. TARP was originally intended to purchase toxic assets to clean up the banks' balance sheets. Bernanke insisted that Treasury just write the banks a check and say, "Do what you want with it."
So I guess my overall reaction at the time was primarily stunned disbelief. I knew politicians were out of touch with reality, but I had no idea they could be that out of touch.
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