Why Does The World Hate Wall Street and Bankers
It seems that conservative and liberal pundits alike all use Investment Bankers as a symbol of greed and corruption to scapegoat for all of the countries woes. Did this all start after the housing crisis or has there always been hostility towards bankers?
I commonly hear journalists spout the ignorance that bankers add nothing to the economy and it is frustrating because I don't think they realize all of the work that bankers put in to allow American businesses to finance and grow their operations. Even on a smaller level, do these people realize that they would not be able to finance their cars and homes if it were not for the retail/consumer arm of big banks?
this is OP right now: http://i.imgur.com/WTDnnwE.gif
boils down to they hate us cus they aint us
u mean to say "they hate us cuz they anus"
Same reason geeds hate FratLords. Ask me if I give a fuck?
Go on, ask me, really.
Do you give a fuck?
Take the amount of genders that exist, then subtract 2. That's how many fucks I give. 0, 0 fucks is how many I give. crushes Natty and bangs a noobs mom for talking shit on X-Box live
If you've had the chance to grab drinks with a Senior Banker whose been in the industry for multiple generations (30-40+ years), they'll often share why if you broach the subject. This doesn't apply to everyone, but many bankers did a bang up job from the 1970's until now screwing the profession's reputation by simply acting like greedy assholes.
An MD I've been privy to drinking with described WallStreet firms in the 80's as such, "They were ripe with drugs, large personalities, and self-serving attitudes." Those three ingredients create a personality cocktail doesn't bode well for work place morality nor a well liked reputation...
I describe the reason why Bankers are hated as such (citing a recent example): Fact 1A.) There is no proven relationship between how much money you make and how little friends you have.
Fact 1B.) There is a proven relationship between how many people you screw out of their life-savings with loans that were unknowingly sub-prime, and how little friends you have.
Unfortunately everyone in the industry is now thrust under the same umbrella, despite the fact that there are many positive ancillary benefits coming from the industry, such as: job creation, business proliferation, and the economy being kept in motion. Like life, we are as fast as our slowest runner... or most immoral in this case.
Fact is: Those people have no idea what they are talking about. It is the same with politicians like Bernie Sanders who would even fail a basic exam in macroeconomics. A eco freshman has probably a better understanding on how the economy works than this bastard. People don´t even know what an Investment Banker does. Most Americans believe that they speculate with normal people savings to generate revenue similar like in the Wolf of Wall Street. They don´t have a clue abut M&A, DCM, ECM, ....
I dare people to believe idiots like Bernie Sanders and to break up Wall Street banks, so that they can see how important those institutions are. There wouldn´t be any major process possible without investment banks. No economic growth, nothing. At least not in the same pace and rates we saw. Helping companies to acquire others and to enable them access to capital is the fundamental of growth and innovation. A break up would cause higher unemployment and slower economic growth. Banks play a major role in the economy and the fact that there are some stories about some greedy individuals who were involved in criminal activities don´t change shit.
A clear line must be drawn between the issue of whether Wall Street provides value to society (it undeniably does) and whether we should "believe idiots like Bernie Sanders and to break up Wall Street banks".
Presumably "break up Wall Street banks" refers to the systemically important financial institutions. I am genuinely interested in whether the benefits of having giant banks (global competitiveness, economies of scale, etc.) outweigh the risks (Too Big to Fail). Are there services that a smaller bank can't even come close to providing as well as a TBTF bank?
I am purely playing the Devil's advocate here when I ask: why couldn't smaller banks provide all the valuable services you have identified - "Helping companies to acquire others and to enable them access to capital is the fundamental of growth and innovation."?
There are many reasons why big players are necessary. For example, JPM has a great balance sheet to finance deals. Only large banks like GS/MS/JPM can offer some kind of structured products. Only JPM can finance a 50bn deal in 2 months. Generally, large banks offer customers a wider range of products and services. Banks that are more diversified in their activities — which is the case with most large banks — generally pose less risk of failure. In the recent financial crisis roughly 450 small banks failed and some 200 small banks have yet to pay back their TARP assistance. How many of the big banks actually failed?
Banks like JPM, Citi, BoA also profit from economies of scale. A bank breakup might mean higher interest rates and fees on credit since you can't run 3 smaller banks for the same amount you need to run one big bank. Banks ultimately sell loans to aggregators such as Wells Fargo, U.S. Bank or JPM, which in turn put them into securities and sell them to investors. If banks aren't big enough to aggregate loans, it would have a negative impact on the flow of mortgage money (slower lending -> slower economic growth since spending is the main contributor to growth in the US). Big Banks don't just aggregate loans, they also invest in them. Smaller banks might be less able or willing to risk money this way, a change that could also mean waiting longer or paying more for mortgages. Besides that the biggest banks have a global presence. How do you want to advise a large US company who acquires a competitor in Europe? Do you really want large U.S. companies going to large foreign banks? You push the center of finance out of the U.S. and over to Europe. That's not good overall for the American economy, especially in a world that's becoming more globalized every day.
More important, we overlook the lessons of history. The Great Depression raged despite the fact that most banks were small. The 2008 crisis was easier to contain than the Great Depression because the Fed and the Treasury were able to get the heads of the large banks in a single room and strong-arm them into an agreement that ended the panic and restored lending.
Furthermore, no advocate of a breakup has come forward with a plan on how to do it. Large banks are global, complex, integrated institutions. Breaking them apart would be incredibly difficult, long and disruptive, and the banks might have to freeze loan growth during the process, slowing our economy even further.
People verbally hate rich people. But instinctively love them.
Just imagine if the "refugees" were actually millionaires. Societies have no problems with super wealthy immigrants.
But once you're poor/needy, you're "loved" and "welcomed" while avoided like the plague.
There's a great scene in the movie The Gambler (horrible movie, great scene) about "fuck you money". Naturally people will never admit they love assholes.
But what we like and what we want are usually polar opposites. Think about your relationships.
Athletes/Entertainers don't contribute much to human development but are paid fortunes. IB exists because there's clearly a big demand for it. End of the day it's supply/demand.
Vilification of Young Wall-Streeters (Originally Posted: 05/25/2012)
So, I haven't posted here in a while, but I wanted to take a quick second on this dreary morning of the unofficial start to the NYC summer to write about the vilification of young finance professionals in the minds of those outside the industry. This story really has no goal, I am just looking to start an open discussion I guess. It comes as a result of two unrelated experiences.
First is my recent experience with my extended family. While you would think these people would be supportive of me and my career, the "liberal" side of my family sees me as no different than the Raj's of the world. They think my job involves nothing more than "manipulating money" (a direct quote) and reaping gains while not actually contributing anything to society.
This is interesting as it comes from people who complain about their inability to get a loan for their business, and I am currently working at a leveraged loan shop, evaluating and loaning millions of dollars to businesses in need of capital... But I guess I'm just pushing buttons and manipulating money. The second experience (and the one that inspired this post) occurred around 1am at a bar last night/this morning. I was enjoying myself, sipping my beer, having a nice conversation and entertaining a lovely young lady at the bar. Everything was going well, making the normal small talk, until we get to the "what do you do for a living" question. Casually, I say that I work in finance, not trying to bore her with the details (maybe I should have...). Instant turn off. I may as well just told her I have syphilis and murdered puppies for a living. WTF? It used to be great to be in finance; now, I would probably be better off saying I have a G.E.D. and work as a garbage man.
I guess my point is this: Finance used to be respected. Those in the industry were seen as smart, driven, hard-working, successful individuals. Most of us (I think) still fit this description; however, due to the actions of a few we are seen as second-class douche bags. I think my family may give my cousin the waiter more respect for what he is doing than me for what I am doing.
But let me say this, I know how hard I worked to get where I am today and how hard I work at work every day. Those who aren’t in the industry, or don’t know me, don’t get it, and it sucks. They think I am nothing more than a monkey that works 100-hours per week (sorry if you do, put in your time, it won’t be like that forever) contributing nothing to society. As I sit here and prepare to blow out of my office at 11am to start my summer, I say… f*** ‘em all, and just hope that eventually the stigma wears off. Happy Memorial Day weekend monkeys…
These are two seperate issues:
1) On the family side....unfortunately you cant change your family. When this happens to me (and it does) I just laugh it off..who cares what aunt tilley thinks? Just change the subject and move on its not worth figting about.
2) Being in finance has never been a job that turns women on especially girls you meet at a bar who are there to have fun. It is a boring job. Programmer is even worse actually. If a girl asks you what you do for a living the conversation is already turning boring anyway and you are losing control of the situation. Point being that the girl is only going to be turned off by your job if you she isnt attracted to you....when girls ask me my job i have fun with it, make them guess, say im a porn star, etc and when the actual truth comes out she doesnt care she's just having a good time. Seperately you learn alot about yourself by making girls guess your job...if you ask that and girls guess something boring like a banker then you may want to think about why you come off as a boring person on first impression.
I don't.
Just don't talk about it. With my working class family I don't talk about politics or Wall Street on purpose, because I know going into it we'll disagree and the conversation will take an edgier tone than I'd like. That said, if you really get forced into the conversation, it's usually just a quick "did you know my BB actually does x, y, z which has a,b,c positive impacts. And I do 1,2,3, which just several weeks ago allowed me to understand how I was able to help this biotech firm raise money for a new cancer treatment."... since most people don't know what's done on wall Street, just a quick reminder of the good and necessity of the street usually changes the conversation.
there have been numerous threads on this, use the search function
a more recent one: http://www.wallstreetoasis.com/forums/why-everyone-hates-wall-street
in short:
don't worry about what others think. the people who matter in life know you're a good person or not, and if they really care, they'll strive to learn about why a career in finance does not mean you're bernie madoff
don't engage in these conversations. if someone just wants to berate you, rather than correcting them, just say "well everybody's entitled to their opinion" or something like that. if they ask you what you think, they're legitimately interested, otherwise they just want to blow off steam, and no good can be accomplished by arguing with those people.
I was recently at a cocktail party at a fraternity brother of mine just got engaged to this super liberal girl who said something along the lines of "all people in finance are crooks, financial advisors are crooks, etc" not knowing what I do for a living. neither he nor I corrected her, my fiancee didn't correct her, we just changed the subject "so hilary, how has your hemp necklace business been going?"
I think in 99% of situations, that's the way to go.
for you, since you don't even work in finance, I think you should keep your mouth shut and focus your attention towards networking and bettering your resume. if you actually get into finance, then maybe your family will become curious about what you do, but at this point it seems like you're arguing just for the sake of arguing, which isn't a great quality.
How often do you have in-depth conversations about the moral merits of Wall Street? This sounds more like a corny ass freshman thought exercise.
I pay them 4.50 and thank them for my morning coffee
While Trading On Wheels' may have provided the most perfect response I've ever seen on this forum (sb'd) I am waiting for a turn on Friday after 5:00, so here's my .02.
I, like you, come from a low-middle class suburb of a major city. My family hates wall-street and big business. The friends I grew up with hate wall street and big business. The teachers from my grade school hate wall street and big business, and so does the local grocery store clerk.
Obviously I have different levels of concern about these different sources' opinions of my work (read "life"), ranging from 'mildly interested in changing their mind so Christmas can be more pleasant for everyone' to 'not at all' to 'have a lot of fun making them feel stupid'.
So first; my family. For example, I have good talks with my father regularly about the macro economy, oil industry (we are in Texas), foreign political interests, and domestic policy. These were originally initiated by me although now he will start them, and flow from my knowledge of finance and economics and the oil industry (which I cover). These talks help us share ideas and are generally productive.
So, method 1: Demonstrate why knowledge from this industry is important and how it positively influences large ideas the counter-party is interested in. This is very different from trying to teach someone how and why capital markets and easily accessible credit improve their lives. However, this requires a reasonably logical second party.
Then there's the guy at the corner store: See "Best Response" above
Then there's those people who have extremely deeply held, strong, emotional opinions regarding Wall Street. These are typically adult children; ie, 20 - 26 year old's who live with their upper-middle class parents and work at radio shack. These are the most fun. Rile them up a little bit (shouldn't be hard, just talk about how much you hate SJWs, or how Obama is a bad president) then mention you work on wall street. Que the incendiary sputum.
Herein lies method 3: Test their basic knowledge, publicly.
Then say something along the lines of. "Well that's all good and well, and you seem to know a lot about the issues at hand... Do you think you can tell me the difference between a commercial bank and an investment bank?"
This has proven to be gold for me in terms of reactions, but any level-headed request to explain what their position (read, "what they saw on youtube within the last 8 hours"), or explain their knowledge of the industry is sure to work on people in this category.