4/23/17

It seems like everyone and their mother is predicting an upcoming global recession within the next couple of years. There was a discussion about this in a thread earlier. https://www.wallstreetoasis.com/forums/60-chance-o....

The purposed causes of the recession are diverse, as well as the predictions of its scale and impact on the global economy. But what does this all mean for students seeking careers within the finance industry in the near future? As a member of the Class of 2021, should I be concerned? If a recession does occur, what would the hiring market look like? Do you guys think it may be a bad time to enter finance in the next couple of years?

Comments (64)

Best Response
4/15/17

You're career will span 4 decades (at least). There will be booms and busts. Consolidations and divestitures. Layoffs and hiring sprees. Do what you want, network and be resilient.

Or work for the government and be a leach on society.

Master in Finance Website

"We've always been at war with Eastasia"

Investment Banking Interview Course

4/15/17
TNA:

You're career will span 4 decades (at least). There will be booms and busts. Consolidations and divestitures. Layoffs and hiring sprees. Do what you want, network and be resilient.

Or work for the government and be a leach on society.

time to tighten your leash and go back to doghouse

4/15/17

Thanks for the response! I completely understand that there will be highs and lows to everyone's career, but my question is do you think that the hiring market will be stable 3-4 years from now? I'm terrified of the notion of spending thousands on a college education on a finance degree whose job market is dry. I'm currently trying to decide between medicine and finance and although I understand that everything will work out in the end, I rather have that end come sooner than later!

4/18/17
SUPERSAM76:

Thanks for the response! I completely understand that there will be highs and lows to everyone's career, but my question is do you think that the hiring market will be stable 3-4 years from now? I'm terrified of the notion of spending thousands on a college education on a finance degree whose job market is dry. I'm currently trying to decide between medicine and finance and although I understand that everything will work out in the end, I rather have that end come sooner than later!

Finance and medicine are highly different career paths. Which do you prefer? There is no one here with a crystal ball who can predict the timing of the next recession. Even so, top candidates still get jobs in bad economies. Make yourself a top candidate if you want to pursue finance.

I was a fringe candidate due to transferring as a senior (+ 5th year) and late realization that I wanted to pursue finance. In a good economy, I probably would have gotten my desired job in IB. Instead, I graduated at the height (bottom?) of the tech bubble bursting and started in middle office at a BB and moved up from there, later transitioning over to IB. It all still worked out.

If you become a doctor, you will be more or less guaranteed a job. We have a massive physician shortage in the US. I am now in healthcare and work directly with doctors. Job satisfaction for physicians is extremely low these days. Make sure you are passionate enough about medicine if you want to take that route, particularly if you'll be left with hundreds of thousands in debt.

4/18/17

Thanks for the advice and sharing your story. Glad to hear everything worked out for you. As to which one I prefer, that's something I'm still thinking about. I definitely hear you about physician job satisfaction though. Doctors are getting burned out today seemingly faster than ever. With a complex healthcare system that involves a load of paperwork combined with an unpredictable schedule, it's not hard to see why a large chunk of physicians today don't recommend pursuing a career in medicine. Disturbingly, the US loses an average of 400 physicians a year to suicide. Isn't that a damn shame?

4/18/17

If you could predict exactly how the market will do in 3-4 years, everyone on this site including myself would not be in banking. Take 4x leveraged loan from the bank and invest.

Go into the field you want, network and work hard and you will be fine. You can scour LinkedIn and find countless 2009 grads who ended up just fine as well as 2008 grads who were quickly laid off from BS, Wachovia, Smith Barney and the likes, and hell even Arthur Anderson in 2001 who were quickly re-hired

4/18/17

Thanks for the advice! One question I do have is what on earth happened to all those people who got laid off during the recession? Did they merely find other jobs in finance, leave it completely, or simply waited until the hiring market stabilized again.

4/18/17

All of those answers. Many get picked up by other banks or institutions. Some leave finance entirely, some lateral.

There will always be recessions or downturns

4/21/17

If finance is what you want to do, go for it. Don't worry about some hypothetical future recession and dismal job market, you'll be fine.

4/15/17

The "experts" missed 80, 01, 08, Brexit, Trump, and hopefully Frexit... don't take their lip service seriously.

where's your sense of humor?

4/18/17

I hear you on this, but another part of me wonders if we have a bit of recency bias towards believing that these things have higher probability than they actually do.

not going to change how we invest, just an interesting intellectual exercise

"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

"The investor's chief problem - and even his worst enemy - is likely to be himself." - Benjamin Graham

4/23/17
TippyTop11:

The "experts" missed 80, 01, 08, Brexit, Trump, and hopefully Frexit... don't take their lip service seriously.

I remember 07/08. The experts called a recession. They did not call a crash.

One thing to bear in mind is that most recessions and most market pullbacks aren't as bad as what happened in 2008.

4/15/17

Do you think a prospective finance student in the late 1920s wasn't asking the same thing?

If you find yourself feeling lost, go climb a mountain.

4/15/17

Interesting question. I always get the impression that the Roaring Twenties gave people a sense of invincibility. Like nothing could possibly go wrong in the Good Old United States of America. There had been slumps before, but nothing like the Great Depression of the 1930s. I'd imagine that the general populace really didn't see it coming, but there were some who warned of the impending danger. Economists and investors like Ludwig von Mises and Jesse Livermore predicted accurately that a collapse was imminent.

4/15/17

That's true, there are aspects of every cycle that are going to be different. Prior to the Great Depression, it was certainly a lot more speculative than today's environment (with a lot less oversight) but the Financial World did eventually recover (Thanks to WW2) and has seen many booms/busts since that time that could make someone question a career in Finance.

As long as the the US Government doesn't shut the door on the Financial World and there is a currency to be utilized, it will endure and there will always be ways to make money (even in recessions). I wouldn't worry too much about what is forecasted for the future. The best thing you can do is keep your eyes and ears open, use what is going on in modern times as great learning experience (especially if you are able to live in it), and make a strong career out of it.

If you find yourself feeling lost, go climb a mountain.

4/18/17

You're delusional if you think that WWII is what ended the depression. Only this Keynesian nonsense that's taught today can somehow tell people that war is good for a struggling economy. Ridiculous.

4/20/17

@zerojb34 I'm sorry that's what you took away from my post. I believe what you think my interpretation of World War 2 was and how it related to the Great Depression is different than my own interpretation of what World War 2 was and how it related to the Great Depression but I didn't feel the need to go into much depth as that wasn't the main point of my post.

War itself doesn't necessarily boost the economy and I think there are plenty of examples within the last 100 years to support that statement. During that time period, there were by and large a lot of factors (which I'm sure you are aware of), leading up to World War 2 and towards the end that came into play to allow our economy to prosper. Economics is never a simple affair in practice/reality.

If you find yourself feeling lost, go climb a mountain.

4/18/17

Dude just gave a great response to a somewhat rhetorical question. Well played.

4/18/17

Livermore was bankrupt within 5 years of calling the Great Depression and accumulating a $100 million fortune. The John Paulson of the interwar period?

4/18/17

Could you even fathom losing that amount of money during such a short period of time. It's absolutely mind-boggling! Of course, its not like it was entirely his fault or something.

4/18/17

Livermore also went boom and bust like 5 more times, eventually just offing himself on a really bad bust.

Investment Banking Interview Course

4/16/17

Bump

4/18/17

Dude just apply some common sense; if a recession does happen, then the hiring market will be shit. There's nothing you can do about it and you certainly can't predict it. If you want to get into finance then do your studies and try to break in, you probably will.

4/18/17

1) What's your next best alternative?
2) Why do you believe finance will be negatively impacted by a systemic recession but that field won't? The reason we called the last recession the 'Financial Crisis', is because it unusual for a recession to be that specific to a single industry.

Life's is a tale told by an idiot, full of sound and fury, signifying nothing.

4/18/17

My alternative would be pursuing a career in medicine. Although I'm sure a recession would impact the medical field, it's not like people will stop getting sick. People always need doctors, I suppose. I do understand what you mean about the unusual impact of the last recession in the field of finance. Hopefully we learned our lessons then, lest history is doomed to repeat itself.

4/18/17

Medicine and finance are pretty unrelated paths man - don't you think there's probably a better way to decide between the two without having to rely on the projected probability of a recession?

Good news is, you'll be fine either way!

Life's is a tale told by an idiot, full of sound and fury, signifying nothing.

4/18/17

I, along with many other users, graduated in the wake of the financial crisis, you'll be fine. offers may get reneged, starting salaries may not be as high, but there's always opportunity, and you should not let fears of a recession change your strategy.

"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

"The investor's chief problem - and even his worst enemy - is likely to be himself." - Benjamin Graham

4/18/17

Thanks for the advice!

4/18/17

A recession is a natural part of the economic cycle and it doesn't have to mean that the next one will be anywhere near as bad as 2008.

My money is on another tech bust, equity valuations on tech are just insane and now Tesla is worth more than Ford and GM. Don't get me started about SNAP. If Uber was in the market it'd probably be trading around $100B and they've been having a lot of issues of late. If there's a tech crash then it'd be a bad day to be a programmer. But that doesn't mean that you shouldn't get a degree in CS because tech will bounce back the same way that finance will after a recession.

Go to a good school, work hard, and you'll find a job. I was recently hired into the worst oil market since the 80s and a lot of our people think that this one tops the oil bust in the 80s. You'll be okay OP.

4/18/17

Thanks for the advice. Congratulations on your recent hire and I wish you all the best!

4/18/17

name me one economist that got wealthy off his/her predictions

where's your sense of humor?

4/18/17

Soros

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

4/18/17

Georgy boy is not an economist. He's more akin to a macro trader or arbitrage opportunist. He's also mad because he bankrolled a losing candidate.

where's your sense of humor?

4/18/17

judging by Alchemy of Finance he is an economist

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

4/18/17

judging by your post, you didn't read alchemy of finance or don't know what an economist is.

as to the question, if you consider El Erian an economist, there's one, could also throw bernanke & geithner in there, as they got lucrative private sector jobs post-public service.

but if you're wondering if someone who is an economist actually got wealthy off of their predictions, meh. economists can be great researchers, great writers, great teachers, but investing is very different than what takes place in the normal distribution world academics like to believe exist.

"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

"The investor's chief problem - and even his worst enemy - is likely to be himself." - Benjamin Graham

4/18/17

you are joking right?

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

4/18/17

You want to volunteer a single economic principle from that book? Not joking.

Life's is a tale told by an idiot, full of sound and fury, signifying nothing.

4/19/17

You know how to draw parallels right? I mean is Soros an economist that sits at the uni an teaches kids about the laws of supply and demand? No, he is not, ofcourse. Is he a person who studies macroeconomic principles and proposes his own concept of behavioral economics? Yes, he is. From the first pages in the "Anti-equilibrium" he discusses economic theory.

Notice anything familiar in these relationships that are scattered all over the book? Doesn't it remind your macroeconomics course? If not, then I don't know that the f*** y'all have been studying in your 40k a year university.

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

4/19/17

@Arti

Since I have a headache and the condescending tone of your comment annoyed me, I'm going to start by making this asshole observation: despite writing two paragraphs (albeit short, poorly constructed ones) and taking the time to google a picture of a page from the book, you didn't actually make a single argument. You did manage to ask a bunch of rhetorical questions, state a fact, and then described a response I could give to your questions that would force you question your knowledge of what's discussed in economics classes at expensive universities (btw, didn't attend one so I can't help you there).

Now that I've got that out of my system:

It seems like you're justifying your classification of Soros as an economist since i) he "studies macroeconomic principles and proposes his own concept of behavioral economics" and ii) "that there are things scattered throughout this book that [should] remind me of concepts covered in my macroeconomic courses".

To state the obvious, having studied the principles of macroeconomics is clearly NOT enough to to qualify you as an economist (which is a professional title) on it's own. As they say at those 40k/yr universities (or so I assume, since I got my econ degree at a state school), it's a necessary but NOT sufficient condition.

On to the next one....

We agree that much of Soro's work discusses economic concepts (mostly so he can remind everyone that they're not representative of how the real world works) and that the main premise of the 'Alchemy of Finance' is to explain his personal philosophical approach to investing.

Of course, that's fine, cause both those things are totally consistent with being an investor (which is what Soros is). I can walk you through the logic in excruciating detail, but basically comes down to the fact that investors are people who apply the principles of finance (which is, of course, what we call it when economics is specifically and exclusively applied in the context of the global credit/monetary system) to make a profit. It's a simple as the difference between an engineer and physicist - one refers to the person applying the theories and the other refers to the person who discovers/explains/clarifies/teaches those principles. If you think that's bullshit or a distinction without a difference, try going to your local biology PH.D the next time you get shot.

Even if you ignore all that though, you should have still realized you're wrong since Soros devoted the first chapter of that book to explaining why he thought economics is a flawed science and explain how his approach is different and better.

Second, obvious indicator: He's not referred to as an economist, in general. Just checked wiki and GeorgeSoros.com and neither referred to him as an economist. The more you know.

Oh, and one last thing - I assume you picked that page b/c you thought 'Reagan's Imperial Circle' was a good example of an economic principle (e.g. as evidence of me being wrong)? If so, you're wrong since i) that's just what Soros called the specific set of economic conditions facing America at that time (different than a principle) and ii) there is not an econ textbook written in the last decade containing that 'principle'.

Life's is a tale told by an idiot, full of sound and fury, signifying nothing.

4/20/17

Thanks for the effort, but tl;dr

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

4/20/17

The short version is: the @thebrofessor was 99% of the way there when he said: "you didn't read alchemy of finance or don't know what an economist is."

You didn't read alchemy of finance and don't know what an economist is.

There, fixed it.

Life's is a tale told by an idiot, full of sound and fury, signifying nothing.

4/20/17

Sure lets agree on this point. I'm too lazy to go into a granular discussion.

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

4/19/17

Is P Krugman rich? He actually lectured an econ class for a few semesters that I took on the great recession.

He's actually a shitty teacher/lecturer, but was entertaining to get his insight on some of these meetings with top figures (Abe, Presidents, etc)

"I did it for me...I liked it...I was good at it. And I was really... I was alive."

4/18/17

While he lacks the traditional background or education of an economist like Krugman or Stiglitz, the definition of an economist is "an expert who studies the relationship between a society's resources and its production or output". I suppose by that measure one could sort of call him an economist!

4/18/17

Got to go with thebrofessor on this one

where's your sense of humor?

4/21/17

He's bat shit insane, but Peter Schiff &a many other Austrians.

4/18/17

Are you ibanking or bust?

4/18/17

From my extremely limited and probably naive perspective, I'm really only interested in investment banking or MBB management consulting. Of course, I am sure there are a number of other roles in finance that are great too, but I have yet to hear about a financial career that offers more mobility than investment banking. Again, sorry if I'm being ignorant!

4/18/17

No one really knows if there will be a recession. You can hedge by throwing in some math/CS to go along with your finance. You can also go to grad school for a year if job market is soft when you graduate.

4/18/17

Do you think that majoring in biology and minoring in economics would be a safe way to hedge?

4/18/17

/delete - paraphrasing above

4/18/17

Figure out what makes you happy

4/18/17

The eternal goal! Hopefully I find myself to be happy regardless of what I end up doing.

4/18/17

Can we turn this into another 'AI is the greatest existential threat post'? Interested to hear everyone's input.

4/18/17

OP, have some cojones.

Sure, there's a risk that you graduate in May '08 and are promptly laid off without a year of experience under your belt. As others have said, there's a good chance you'll bounce back. I think what you're really worried about is the economy going bust and you falling off the deep end entirely - don't worry about that. That's no way to live your life, and it's not likely to happen anyway. The only finance people I know who couldn't climb back into the tower after 08 are those who fell from the top - and that has less to do with the difficulty of getting hired in a recession and more to do with the difficulty of getting back into the fold when you're a former MD, you're expensive, and you have severance contract clauses weighing you down.

Look, you seem like an enterprising young man, so I'll add something I haven't seen others add above: If you're truly exceptional, then the shittiest time is the time to get in the game.

Paulson's bank account was created not in spite of, but because of his willingness to engage in the largest economic crash in a century.

Medal of honor recipients are elevated to glory because they charge into losing odds and prevail, not winning ones.

LBO specialists make millions by purchasing companies that are on the verge of bankruptcy and turning them around.

Traders make money by buying low and selling high.

Stable situations are not the stage on which greatness is acted out.

Remember: Risk versus reward

Believe in yourself and embrace whatever odds may come. In the words of Phillips Brooks:

Do not pray for easy lives. Pray to be stronger men. Do not pray for tasks equal to your powers. Pray for powers equal to your tasks. Then the doing of your work shall be no miracle, but you shall be the miracle.

4/18/17

Thanks for the advice! I hope that I might be at the right place at the right time to seize one of those opportunities. I think my greatest concern was just completely being shut out of a job, but you make an interesting point about being able to bounce back relatively quickly.

4/18/17

Circumstance rarely presents us with a right place and a right time. More frequently it presents us with the present, and you have to decide what options you'll pursue. Just realize that you can't seize the opportunities offered by the present until you begin to see them as a challenge rather than a risk.

My Tl;DR is that while a risk-mitigating approach to life keeps things stable, it will also diminish rewards. If you really want to have stellar success, you have to stop making risk mitigation the primary driver of your decision making.

Think of opportunity like exercise. Most people don't like to exercise because our natural reaction to it is "this is painful and therefore should probably be avoided".

Once you've been around the block a few times, you'll realize that like exercise, a lot of opportunity is about embracing the pain and realizing that on the other side of the gauntlet is a reward. Sure, you might get burned passing through the gauntlet, and you should be rational about those risks and your appetite for them, but don't fall into the mental trap of thinking that stellar rewards lie anywhere else than on the other side of a risk. Many a humdrum life has been spun out of that whole cloth.

4/18/17

I always enjoy your posts but man, really opportune time for me to read this today. Much needed, thanks.

"Who am I? I'm the guy that does his job. You must be the other guy."

4/18/17

Thanks man, I appreciate it.

If you're in need of some more motivation, I highly recommend the following excerpt of Teddy Roosevelt's "Man in the Arena" speech:

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."

Good luck to you.

4/18/17

Circled back to say that your positive attitude when replying to other users was refreshing (though initially disconcerting to a jaded asshole such as myself). If you maintain that as a member of the workforce, you'll be successful, recession or not.

Life's is a tale told by an idiot, full of sound and fury, signifying nothing.

4/18/17
4/20/17
4/21/17
4/23/17
Add a Comment