Goldman Kicking A$$

hahaha, this is delicious. i can't wait to hear all the politicians start spewing sh1t about this.

Hahahahahaha great news. Obama is such a tool.

Hahahaha (just wanted to get my own stupid laugh in there)

oh and by the way...(1) goldman was never the problem and (2) this probably has much more to do with markets than savvy (lower competition, gov debt issuances). Talking about the overall industry- we reign them in when disaster strikes and let them completely loose again when there's the predictable rebound? (just playing devil's advocate)

Who knows what will happen with the markets between now and then.

Great now I have to listen to all the wso wankers pleasure themselves thinking about GS.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

is this a joke? dont you guys know about the hidden month? the phantom first quarter results (aig bailout money) no shit first quarter would look good

december is a highly overrated month, anyway.

This isn't going to change anything.

Hate to burst your circle jerk session.

I would be very surprised if GS' performance in the past few months will be at all indicative of what's to come.

Massive bonus to their alumni in the Government backing GS up...

This is awesome!!

Good thing I aced my first round interview and eventually got a job there -- oh wait...

Awesome. .............................................................................. http://ittakesanationofhaircutstoholdusback.wordpress.com/ It Takes A Nation Of Haircuts To Hold Us Back.

dont know if this would last for the entire year, although this is certainly good news

How much would Goldman Sachs be kicking a$$, with all of that CDS exposure, if AIG had been allowed to default, rather than given government bailout money?

Edmundo Braverman:

Perhaps this is the beginning of the end of the government's sad foray into private industry.

The beginning? Try the end, this press looks awful and with a liberal congress and president and a general public that just about hates Wall Street your looking at the shit about to hit the fan.

haha

http://www.nydailynews.com/money/2009/06/22/2009-06-22_financial_firm_g…

Completely agreed @ Halberstram.

What I can't stand the most are all those wannabe populists brandishing their e-pitchforks in the comments section on Dealbook, the Economist, finance/econ blogs, etc..

E-peasants with e-pitchforks and e-torches storming the e-castle.

The WSO Guide to Understanding TARP

Not clear about what you're referring to when you say my estimate, but here is the answer to what I think you're asking (I'm assuming you're referencing my exchange with the esteemed Dr. Halberstram).

1) I honestly don't have an opinion about how much analysts should make. Keep in mind that the following comments are gross generalizations, please. The average analyst contributes fuck all to his parent bank's bottom line. Based on what a typical analyst does all day, it is basically high-level clerical work. All the quantum physics classes he took at Brighton Beach Community College don't amount to shit in the real world.

2) The greatest market inefficiency is the most recent one: namely, government intervention. Aside from that, the system may not be perfect but it has worked for a long, long time.

As for overpaying grads, I'm not trying to hurt anyone's feelings. I'm just asking for a little self-awareness on the part of college grads. Do a check-up from the neck up. You should be giggling every time you cash a paycheck. The thought that someone is willing to pay you close to $100,000 a year to populate cells in Excel should make you absolutely giddy.

You're not splitting atoms, for fuck's sake.

The WSO Guide to Understanding TARP

i actually laughed... not splitting atoms... funny shit.

Only two things are infinite, the universe and human stupidity, and I'm not sure about the former.

http://online.wsj.com/article/SB123756518992096521.html

A few things:

I went to school with some kids who may pass for mildly retarded, I have no misconceptions about what it takes to graduate from college. I was speaking more to the average american who has their average income of 53K. So between me and Joe Six Pack, while only one of us works on wall street, paid about 100K to go to college, works 90-100 hours a week getting abused, both of us are living as if we make 150K a year. Now when the credit card bills and home equity lines are catching up with him and wreaking havok on the economy, they're bitching and complaining about Wall Streeters who made a killing. I think Wall street played a role in this crisis as well. But the bottom line is, no one on Wall Street is walking around bitching and complaining about how they lost their jobs but there's other people out there still making money. I think the majority of Wall Street recognizes the role certain areas of wall street played in this while the average american is wrapped up in dufus politicians and pundits who refuse to place any blame on the dick wads who are actually the ones defaulting on their financial obligations. So the end result is, they blame everyone but themselves, and 7 years down the line, they will do the same thign all over again. In 10 years, Ill drive through an average middle class neighborhood where 2 out of every 3 houses will be getting extended and renovated with 3 luxury cars in the driveway. One parent is a postman and the other is a stay at home mom/occassional substitute teacher.

While I don't think what we do is tremendously intellectual, it is not easy. Most people can't do it. By do it I dont mean type =sum(A1:A16) into a cell, I mean have the credentials to get into this field. Everyone knows the hardest part of investment banking is getting in. So look at everything that is entailed in that (getting into a top school, graduating at the top of your class, landing very competitive internships, etc...).

In 2007, 84% of American 18-24 year olds graduated HS, 39% of 18-24 year olds went to college. And of those 39%, I going to say probably two thirds actually graduated with atleast a bachelors degree (optimistic IMO). So about 25% of 18-24 year old Americans graduate from college. That 25% is about 7.2M people, out of 28.8M people total. Now take the top schools, or what we refer to as targets. Harvard, Yale, UPenn, Stanford, Princeton, UMich, Cornell, Columbia, Dartmouth, Duke, UVA, MIT... I dont feel like arguing about what should/shouldn't belong in this category, but its roughly 110K students at those schools, and you need to graduate in the top 10%. So 11,000 students out of a total pool of 28M.... thats .04% of people can get this job, if they want it. Obviously you don't have to have graduated form one of those schools ONLY, but again, its not that far off. If you went to a lesser school you pretty much have to have even better grades and instead of the top 10% of that class getting an offer, maybe 2 students will land in IBD out of an entire graduating class.

Second, I think we're being compensated for a few things. Number one, the kids who take these jobs could have just as easily landed jobs at Google or IBM or and of the other top non-finance jobs. And their lifestyle would be significantly better. Why would anyone punish themselves in banking for the same amount as the guy who wears cargo shorts and a tshirt to work and eats a $2 gourmet chef prepared lunch at Google?

Third, no one out of college is willing to take a job where you are promised to be unemployed after 2 years. Thats best case scenario, as many will be able to tell you, they'd trade their left testicle to have finished out their analyst stint instead of being given their walking papers before then. There is no job security. If its between starting out a career at google or working at another company where they will only keep you employed for 2 years, AT BEST, where are you going to go, all else equal? They obviously have to compensate for that to get top candidates.

This is what I want to hear

Traders were leaving GS for hedge funds en masse up until this bonus news, my cousin was a VP of their executions & clearing (trading of GS own account) - he told me the two other head guys there left right before he did. They took their assistants and programmers with them too.

The department is pretty empty now, this occurred after the news that GS's trading of its own account was what held up its earnings but before the massive bonus news. There was a lot of inside strife about under compensation.

Anyways, it's good that Goldman is taking the stand now and raising compensation.

And I think you hit on something important, maybe unintentionally.

When it comes to investment banking, is landing the job the real work, and the job itself is the payoff?

I confess, I don't understand what motivates people to get into the field these days, aside from a twisted need for security and "prestige". Twenty years ago, it was obvious why you would want to do this; it was the wild, wild west and anyone with balls could make a fortune and then get out, if he didn't go to jail first.

I'm not saying I didn't take my share of abuse when I started, because I surely did. But I never had any illusions that I was there (and I'm not directing this at you, because I get the sense that you're not the typical prestige junkie that inhabits the investment banking space) for the dental plan, so to speak. I was there to make money for ME, and that's it. If my activities generated a profit for my firm, that was all the better. But I never gave a second thought to anyone but myself when it came to why I was there.

Nowadays, it seems like you have to go through this years-long process just to maybe get into a position to make real money. You mention the kids that could go to Google and have a better lifestyle, etc... and I'll be the first to admit that I'd be one of them if I was a recent grad. Fuck Wall Street. It seems like there's no way to get rich working for a firm anymore.

People talk about exit ops. You know what an exit op is? It's breaking the bank, staying one step ahead of the regulators, and having an armored car follow you home on your last day, and fuck the fools you left behind. What I see on the Street these days is just a cruel extension of the 40-40-40 plan (work 40 hours a week for 40 years so you can retire on 40 percent of what you already can't live on).

I think it's a cultural/generational thing. Today's market idols are a couple of lace-curtain Boy Scouts like Tim Geithner and Ben Bernanke. When I got started, Michael Milken and Ivan Boesky set the tone. I'm not saying it was better, but it was certainly easier to make a shitload of money and get the fuck out.

It just seems that the banks are hip to the weak need for security that makes up the psyche of today's college grad, and they're increasing fixed salaries in an effort to turn you guys into white collar wage slaves.

My apologies for the length of the post.

The WSO Guide to Understanding TARP

Has it ever occurred to you that the microcosm we call investment banking is nothing more than a Judeo-Christian system of peerage, and has nothing to do with the real market? In other words, everyone involved is in on the scam, knows the fresh meat is overpaid relative to their contribution, but is willing to look the other way and perpetuate the scam because most of the guys at the top are overpaid relative to their contribution as well.

If it weren't just a big country club looking out for its membership, why is there so much discussion about networking and who you know in order to get your foot in the door regardless of your relative merit?

I existed in a market space that was a true meritocracy. You either got rich or you starved out. End of story. There was no security, there was no "Well my dad is the MD, so I should be okay", there was no one looking out for you. At the first sign of weakness, the other traders would destroy you like a wildebeest calf who strayed too far from the herd.

I'm not implying that junior bankers are overpaid, I'm flat out asserting it. I'm also not implying that senior bankers are morons (though that case could certainly be made of late), just that they are in on the scam.

Let the hate mail commence.

The WSO Guide to Understanding TARP

Edmundo, I think the banking field is looking for certain types of candidates: the ones who want to scratch and claw to get to the top and are constantly striving to excel. While you can perceive the job to be the 'payoff' for doing well in school, knowing your shit and playing the right recruiting games, I think its more of an indicator that you are that type of person and have invested enough into the track you're on or hope to be on, where things can get tough, and personal, and uncertain, and you'll keep plugging away. Because if all but 1 person will be left with a job, you'll bust your ass, scratch and claw to make sure you're that 1 person.

On a side note, I have no doubt about the wild west type Wall Street you describe. However, especially after the fact, people always remember things being better than they actually were. You can call it perspective or truly appreciating something after, but I think if you jumped into a Delorian with a fruit blender bolted to the trunk, dial back to 1987 and walked down Wall Street you'd be hard pressed to find people who raved about what a "true meritocracy" it is and how if you're not pulling your weight its either up or out.

I think the culture is more a function of the increasing political correctness. Now going back to my getting treated like shit statement, which basically consists of getting work dumped on you at 7 at night when you've been waiting for shit since noon; SR people volunteering your weekend to do needless work when you've taken off some time ago, and some of the other typical bullshit; basically nothing really. I'm sure the Wall Street you were on was in stark contrast. When you say abuse, I understand it to be just that. As in getting screamed at by someone 3 inches away from your face with saliva nuggets flying into your eyes... getting cursed at and asked what type of stupid fucking 4 dollar back alley whore of a mother taught you how to count. Its just a different type of place now, but I'll tell you what, if I was being treated like that now, I wouldn't be doing this for 60-80K base plus 100% bonus, which means I better be making a lot more money. Which means that if I'm at the bottom of my class and not making as much money (and probably getting bitched at more as a result) I would be out of there in a heart beat. That doesn't mean its more of a meritocracy and there's no preferential treatment, that just means people are given more liberty with their behavior.

Analysts at banks are not overpaid for what they do. I actually believe that they are underpaid. If you take an analyst that works 80h/week on average you get 4000h/year.

Now take the $60,000 salary and you get an equivalent of $12/h if you count anything over 40h/week as overtime paid 1.5X, which is normal for any hourly paid position. $122000h+1.5$12*2000h= $60,000

Even if you were to get a $60,000 bonus that is still only $24/h, which is less than an entry level job at GM or any other car manufacturer.

Few IB analysts have the skill set (programming chops or CS theory background) to work at Google in a non-sales or customer service role. I mean engineers at Google, Yahoo, Microsoft, etc. are seriously smart, technically gifted and creative as well.

If you gave 100 IB analysts or associates the opportunity to work at Google either in a technical role if they were qualified, or business development, I'd venture to say north of 95 would take you up on it on the spot.

MichaelHutchens:

Few IB analysts have the skill set (programming chops or CS theory background) to work at Google in a non-sales or customer service role. I mean engineers at Google, Yahoo, Microsoft, etc. are seriously smart, technically gifted and creative as well.

If you gave 100 IB analysts or associates the opportunity to work at Google either in a technical role if they were qualified, or business development, I'd venture to say north of 95 would take you up on it on the spot.

Um... what are you talking about? When did anyone suggest an analyst could step out of his cube on 85 broad street and start writing code for Microsoft?

Few Google application programmers have the skills set (algorithmic trading chops, securities market background, and ability to work in a hyper-intense environment) to work at as quant trader at a HF. Whats your point?

I said the same candidates who expend an inordinate amount of effort to get on Wall Street have the intellectual horsepower and personality traits to spend a comparable amount of effort to get any top UG position. You can compare a Healthcare Coverage analyst to Google algorithmic programmer and say he can't get do that job, but that same Healthcare analyst also lacks the skillset to become an RN or a motorcycle mechanic.... I'm not sure what your point is.

The analyst qualified to be in a technical role at Google is prob in a technical role on wall street where the earnings potential would blow Google out of the water. No one goes on Wall Street for the laid back lifestyle and job security, so you're wrong in assuming people would jump to Google hand over fist, if they had the opportunity. Second, I don't know what IB analysts you know that would leave a top banking group to go work at Google business development.

I worked on a BB prop credit desk and can tell you that the people were smart and hard working but there are many people out there who could do the job if they had to. There were quite a few PhDs on the desk, all international, but in econ or finance. Compare that to Qi Lu at Microsoft or Udi Manber at Google. I mean these guys are just at a whole other level- their talents would be utterly wasted in any finance position save maybe Renaissance Technologies or DE Shaw. Oh yeah, Marcus, IBD is not algo trading- as an aside, do more than five people registered on WSO really understand algo trading?

I do agree IB analysts should be paid a lot for sacrificing two of the best years of their lives... it is a bit far fetched to say the work is truly mentally challenging or creative. Oh yeah, personal injury attorneys on TV make a boat load of money chasing ambulances- so making money does not necessarily guarantee social prestige- especially these days since Wall Street blew itself up and had to go hat in hand to Joe Sixpack on Main Street.