3/7/13

I'm a current student graduating 2015 or dec 2016 and that's still a few years away so I'm curious as to what changes you all expect in the industry between now and then or for that matter now and 2018 (my first couple years in the game) .

They say banking is going back to fundamental evaluation donu think its there to stay?

Sum estimate chinas Econ to be larger than the US's by them should I work on my mandarin?

Anything I can do now to prepare for changes you foresee?

I know it's a vague question and I may sound stupid for asking but any feedback will hell

Comments (174)

3/7/13

Learning to write grammatically correct English would be a start.

"#1: I want a Times New Roman in the streets but a Wingdings in the sheets."

Investment Banking Interview Course

3/7/13

The Black Gordon Gekko:

Anything I can do now to prepare for changes you foresee?

http://www.universalclass.com/i/course/writing-bas...

3/7/13

Hahaha

"Those who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."- Benjamin Franklin

3/7/13

Take a look at the current assets on any corporate America balance sheet.

Cash coming out of their ears = major M&A growth in the next 5 years.

3/7/13

At this point the future of investment banking seems to not involve me being a part of it.

Best,
0 offers.

"They are all former investment bankers that were laid off in the economic collapse that Nancy Pelosi caused. They have no marketable skills, but by God they work hard."

3/15/13

Investment banking's NOT growing. It's no longer dramatically shrinking, but in my opinion is now on a single digit annual decline. Biggest losers in near future frankly are M&A bankers. More and more big corporations are now creating their own in-house M&A teams (Google, Salesforce, Yahoo, Intel..I mean the list of big tech companies esp with their own M&A and acquisition deal-sourcing teams using NO investment bankers or paying such fees ($50M buy costs $1.5M on average in I-banking fees just to screen and present acquisition candidates). Google and Intel buy something on the order of 20-30 companies a year. Do the math. A 10 or 15 person in-house M&A team (usually a couple deal-sources, 2-3 accountants for due diligence, 2-3 M&A lawyers to negotiate and draft the merger agreement, an assistant), etc. This is a clear trend that started off slow and now recently has accelerated.

Equity research was lost years ago.

I can't name a single area of Investment Banking that's growing right now, perhaps lower-middle market M&A (WSO crowd any opinions on what if anything is actually hiring and growing right now?)

But overall I'd compare it to real estate brokerages. Their whole advantage a 1-5 decades ago was their excusive acces to "listing" (homes for sale, offices for lease). Now you can pay for CoStar or Streeteasy and see them yourself. Same is becoming or has become true for acquisition targets. You can buy subscriptions as these Corp M&A Teams do and find your own deals. So why do you need overpriced bankers? (Warren Buffet saw this 20 years ago and HATED using bankers and paying an M&A fee on his acquisitions. He would source his own deals pick up the phone, and start meeting and negotiating.)

So curious to hear from WSO crowd what areas are growing now? (There must be SOME, but none that I'm personally aware of. And i'm a former banker now in VC area.)

4/10/13

jimvcangelinvestor:

I can't name a single area of Investment Banking that's growing right now, perhaps lower-middle market M&A

I have been hearing this as well. Can anybody elaborate?

3/15/13

Banking as in advisory services (not capital markets, prop. desks, all the other 'stuff' that I really don't know about) IMO will be just fine, it's cyclical like everything else... there's a natural ebb and flow. And although there are changes going on in the industry right now, I don't think they represent a fundamental change, just a knee-jerk reaction to 2007-2009. Look through history, we as humans simply can't help ourselves and refuse change.

'Before you enter... be willing to pay the price'

4/10/13

Hovercraft, brah. Bottles, models, and hovercrafts.

4/10/13

Historically investment banks have always been quick to hire in good times and fire in the bad times. I think the more important question is this is a permanent trend.

4/10/13

You have a point

4/10/13

You have a point

4/10/13

The loss in market share of European banks just means that the market share is taken over by US banks. What is lost is gained by someone else. The more important question is should you start your career in a US bank vs. a European Bank. For long term purposes, I'd recommend the latter; for exit opp purposes, go to the "best" group.

4/10/13

Aren't the lay-offs mainly in S&T?

4/10/13

The loss in market share of European banks just means that the market share is taken over by US banks. What is lost is gained by someone else.

Not necessarily. If the industry is downsizing, a smaller market share remains.

Actually curious to hear @"mergersandacquisitions78" opinion here.

4/10/13

This new trend doesn't affect advisory at all so no one cares. Traders and salespeople are not bankers.

4/10/13

This is somewhat true. Majority of eliminated positions are coming out of S&T - particularly fixed income as the lower players leave the space due to capital required.

However, even in advisory, the class sizes for analysts and associates are down significantly from pre-crisis days, but have appeared to stabilize. There will always be fluctuations in class sizes as as banks get hot and cold (Barclay's is the prime example), but the trend has been lower.

But to the OPs question - this shouldn't concern you too much. It is a volatile industry. If that makes you squeamish, maybe a alternate path is best.

4/10/13

I don't know if I believe advisory is still below pre crisis days. You bring up the example of Barclays, but they had a summer analyst class of 160 this year...

4/10/13

Yeah - that is my point exactly. Barclay's will have a class of 160 one year, then 40 the next and fire half of the class that joined the year before.

4/10/13

RBS is 80% owned by the British government which is very risk averse and is looking for RBS to return to a traditional retail + commercial bank. Barclays had made cuts but this is mostly in the S&T division in their IB operations, not actual IBankers. Blackstone announced the spin-off of BX Advisory / Park Hill / R&R as there were a lot of deals which they couldn't compete for due to their conflict of interest between the advisory groups and investment groups.

4/10/13

IBD is essentially at an all-time high for fees across M&A and financing, so not sure if any of this makes sense. Also, compensation levels have basically fully rebounded since sub-prime. Companies still need banks to raise money and will still use banks for advisory, regardless of the changing environment.

4/10/13

The cuts are in S&T not banking... this is the problem with media. They say "investment banking jobs cut" and everyone takes this literally. To them, FICC sales and trading is part of the "Investment Bank" hence the misleading titles you read. Advisory across all BBs has not been affected much at all. They are more concerned with groups that are capital intensive, such as Forex or commodities S&T. M&A requires very little capital as far as new banking regulations go. Dont worry.

4/10/13

FICC sales and trading are literally part of the investment bank...

4/10/13

As others have said, advisory is alive and well, and I don't foresee that changing in the long-term. That said, advisory will always be a bit of a cyclical business, particularly for certain groups (i.e., M&A). Right now we are at a strong point in the cycle, who knows if the good times will keep rolling in the near-term. But in the long-term if you have the skills / personality suited towards banking [and in particular, thinking towards what is required at the MD level, not the skills required of an analyst/associate], then you can make a very good career out of it financially. In terms of happiness/satisfaction, IDK, that's more up to you.

But right now things are great in terms of hiring, just look at the boutiques, which are your view on pure-play advisory; I don't hear of layoffs at boutiques. However, a caveat is that in terms of compensation and overall "sentiment," I still don't think the industry has recovered to pre-crisis levels. At least at the junior level, I gather that comp from 2007->present has at best been flat in real terms, and considering many costs in NYC rising greater than inflation, my guess is that real comp is down for junior guys. For senior-level, I have no idea, but at BBs, you definitely have much less of your comp in cash than before. And then secondly, I think the "sentiment" of the industry has never really recovered; despite the fact that bankers are doing great in terms of numbers, the pride and euphoria that existed pre-crisis hasn't returned.

4/10/13

Delete

4/10/13

You're going to be fine. If you can't a find a job, it's you - not the industry. Banking is very hot right now and hiring lots of people in M&A and capital markets.

4/10/13

A few factors to consider.

1) There's pressure towards large company performing what used to be IB work with in house employees or contractors. It's cheaper for them and they have more control over the outcome of that work. Implications are obvious.

2) The market is somewhat mature at this point and as always the king of the hill changes regularly. Life isn't just the Bulge Bracket, and not all of those Bulge Bracket firms were always IB powerhouses. I can think of a few firms off hand who are moving aggressively and it's entirely possible that other firms won't notice them until it's too late due to their lack of brand name and "prestige". For example the award for the best Aerospace analyst went to a such a firm who I have met some VP/MD level folks at and was extremely impressed by.

And the big one:

3) Here's the biggest elephant in the room: more and more economic analysts and financial forecasters are predicting that the sovereign debt bubble may blow wide open as soon as October this year with the latest estimates I'm seeing at 2020. The warning signs are already here as I'm hearing (via some traders) that sellers of public sector debt can't find any bid offers for those securities forcing them to hold. I'm also seeing liquidity dry up in a massive way on some of my own derivatives trading.

If you think we might see 2008 again it's actually worse. Lookup when the last crash in debt markets was to understand why.

4/10/13

Feel like I've been hearing about the sovereign debt bubble being ready to pop for years now.

I'm not super educated on the topic but what would you foresee happening on the advisory side should the bond markets crash?

4/10/13

Being a shyster will exist forever. Thus advising on M&A will exist forever.

4/10/13
fromtheshadows:

Being a shyster will exist forever. Thus advising on M&A will exist forever.

Not just that. Economic downturns can actually be great for some firms as a lot of companies will go in the red and seek to divest themselves of their side-business or try to sell the company off entirely.

4/10/13

I don't see any long-term change in investment banking, in the traditional corporate finance / M&A sense. I am certain it will be cyclical as it always has been and we are a lot closer to the top than the bottom of the cycle, but the fundamental nature and need for the job has remained similar for 20+ years (essentially, since Jimmy Lee redefined the modern investment bank).

I do think that fixed income and equity businesses will continue to shrink for some time, with regulation impacting the former and commodification the latter, so that side of the investment banking industry will suffer, and I think many banks will need to fundamentally downsize those business and core investment banking will be the driver of revenues and growth for the foreseeable future.

I see some ugly hiccups but not a major crash in sovereign debt, there's too much global liquidity and too much overall interest in keeping the party going. No way the Chinese or the Japanese or the Koreans or the Arabs let there be another major debt crisis.

4/10/13

Dear Liam, are you based in London? Or in the States?

4/10/13

These threads always come up, but never make much sense. IB is professional service, like legal counsel is. Bankers, like lawyers, will always be needed. In poor economic times less so, but the market will always rebound. Do not put yourself in a position where if you do not get IB, you will not have any real way to pay back your student loan debt, but this idea that IB at the analyst and associate level will be outsourced to India, that the next thing that the government gets rid of is traditional IB, etc. is not really realistic.

4/10/13

Investment banking future is more powerful from 2015 onwards because nowadays investment banking has reached a top most position in the market and many consultancy firms are providing investment banking services by the experts and professional consultants. Investment banking is the best field for making a better career so consulting firms and investment banks are providing more opportunities for good careers.

4/10/13

Is English your native language? I really hope not.

"There is only one bottom line -- how much money you make."

"There is only one bottom line -- how much money you make."

4/10/13

Although your English is pretty bad, the basic point you have about a larger bank like Citi or Barleh failing is pretty valid. This commercial bank/investment bank thing is utterly retarded because 10 years down the line, just one of them failing will rip everything apart.

4/10/13

I believe this is all temporary. banks come and go and we'll see new ones replace the old ones. And there will be no more mixing of retail/investment. Question is when?

4/10/13

I wouldn't worry about the long term. Someone will always need some banking done, and new entrants will rise to the challenge.

4/10/13

The thing I worry about is what to do with these behemoth banks like JPM, BAC, and C after things get better. I think the whole 'too big to fail' concept was disproved by AIG, so perhaps it would be prudent to break these banks up smaller, a la the telecom breakups. Much to the delight of M&A bankers, legislation the last 50 years has been extremely kind to multinational monster corporations. An oligopoly in banking would not serve the financial markets well in the long run. Right now their size may insulate them from the market fear, but long-run it's just not healthy to have 2-3 banks dominate the market.

4/10/13

It is more than likely a temporary fad. Tech is hot and sexy, despite the fact that tech (or consulting) hours can be just as brutal as IB.

You also have to remember that as IBs begin to staff up, the middle of the hierarchical chart stays skinniest the longest. That is where MBAs fit in.

4/10/13

I'd say fad. Of course I don't know what younger people are really thinking. I saw it during the dotcom boom & bust, and I actually lived in SF during that time so I saw it up and close. I worked in REPE, made great money for a 23 year old and normally would have been a baller. But because I didn't start up or have early options in a .com whose sock puppet ended up being worth more than the entire company at the end of the day, I was a second tier guy. So many people left everything-IB, consulting, real estate (you could go in house at a .com and get tons of options just to run their real estate department, which meant you just got their office space) to get into .coms. I'd say that if you were a tech banker out there it was still sexy-think Quattrone when he made something like $500MM, or one of the internet analysts like Blodgett-but generally everyone wanted .com.

This time may be slightly different because finance has become more regulated but I think as @"Bullet-Tooth Tony" stated, people will see that the grass isn't always green on the other side because you're still working a ton and that generally you don't make as much on the tech side unless you found or get in very early to a company that really takes off. And just because you work in a really cool looking office in Palo Alto, have free food and can drive around the office on a Segway instead of being stuck at a workstation on the 44th floor of a non-descript high rise in Mid-Town doesn't mean it's that much better. I'm not saying finance is superior to tech, but people tend to follow trends and the hot thing out there now is tech and startups.

4/10/13

MBA recruiting is notoriously cyclical. Consulting was hot, tech was hot, banking was hot, tech got hot again...and on it will forever go.

4/10/13

Awaiting answer as well...

But I'm glad I've always known where my true passion lies, irrespective of the job market outlook.
(... or do I =)

-R-

-R-

4/10/13

yes please! someone write an informed response!

4/10/13

many people on my desk will make over 1 million this year. We are still hiring

4/10/13

I plan on blowing my next paycheck all on lottery tickets (scratchers and such).

so maybe.

We're about to enter a Great Depression.
Don't you want a president who's already dressed for it?

I'm making it up as I go along.

4/10/13

Will people continue to make $1m after 10 years of experience? No one knows the answer to that. I don't think the best economists could predict when the next economic expansion will be and what Wall Street will look like then. Everything has its run, that's all we need to remember. A year ago, I read this thread where someone questioned whether Wall Street will always continue to make a ton of money and so many posters mentioned that it will because firms will always merge and require financing but clearly they've been proved wrong. Think about it, different periods in time have had different areas of success. For instance, at one point it was advertising, then bond trading, then information technology and then we had M&A/prop trading/structured products. People will continue to make millions but it may not be in Wall Street, it may be in some other field. One thing to remember is that the smartest will always grab on to the new trend first and the rest will follow. People will definitely be more careful with the way they finance things now on. Hedge funds, PE firms and even pension funds have learned a lot from this and you can expect them to be a lot more careful when it comes to investing their money. You may not see super huge deals coming through the door, and we all know the big bucks come from executing the big deals. In some weird way, this might be a blessing in disguise for us graduating students, because the less attractive Wall Street is; the more inclined we are to do something we actually like (opening up a restaurant, teaching, etc...). The opportunity cost of doing something we like has substantially been reduced. Also, remember that even though Wall Street has a good chance of coming back strong, you still have the opportunity to jump ship with an MBA. Sure, you may lose a few years (2-3) by doing something else but at least you will be enjoying those few years. To condense this, yes people will make a million dollars in the long run, but it may be in a totally different area and also you will see fewer analysts, traders etc. Also the structure of the two year analyst program might change and wall street may adapt to an organizational structure more similar to F500 main street firms, i.e. more people will stay on after two years and this could be because of fewer work hours. In other words, it would be just like a normal job.

4/10/13

indian-banker, i have to disagree somewhat. it's all about the allocation of capital.

I still think that those closest to dealing with $s and structuring big transactions (which will exist as long as a capatalist economy exists) will make millions...especially those at the top of the game / with the best track record.

Will thousands of hedge funds get flushed out and disappear after this? Will thousands of ibankers, traders and PE professionals lose their jobs? of course -- it's already happening...

Will investors still be looking for the next place to get a superior return? who will they turn to? i don't think investment baking will ever "disappear." because CEOs, entreprenuers, etc. need someone to take them public or raise capital or help them spin off xyz division. i don't think that alternative asset classes (like PE of HFs) will ever disappear because as long as people are trying to find superior returns for their $s (which is a no-brainer) they'll chase the managers that prove they have an edge. And those managers will still bring in huge $s in mngmt fees and carry because the demand for their services will be there. it may not be called a "hedge fund" or "private equity", but you can bet that whatever name money managers want to call it, the investors will follow -- and the best managers will keep making inordinate sums of money.

my 2 cents,
Patrick

ps - i dont disagree with you that the current Wall Street crash could be a blessing for many

4/10/13

What we will see in the investment management industry in the next 5-10 years is going to be vastly different than what the landscape was last year or so. The curve of hedge fund managers will still have the outliers making $1B and you will have firms like RenTech or SAC charging 5 and 44 or whatever. However, outside of that handful 2 and 20 is not going to be justified anymore. Additionally, sharper watermark language, more accurate hedge fund replication and contractual payback of fees are all feasible possibilities that is further going to erode profitability.

Frankly institutionals are sick of paying 2 and 20 for a bunch of beta packagers or the guys who can get the cheapest debt because of the name on their business card.

What this means for monkeys and hopefuls are that the pay bands are going to get squeezed, especially at the bottom levels and that a buyside job will no longer be the golden ticket. Of course, compared to other jobs the pay will still be ridiculous but you won't see mediocre analysts and managers pulling in paychecks with 30-50% comp trajectories.

4/10/13

a little historical perspective:

in the 1400s the Medici family became so wealthy via their bank that they eventually ended up ruling much of Europe. in the 1800s the Rothschilds did much the same thing. in the US, there was the House of Morgan.

and then of course all those guys who weren't as big...Haym Solomon, Charles Merrill, etc etc

the bottom line is that finance will always be necessary, and financiers will always find a way to take their cut. Will ibanking always pay as much as it did in the past 3-5 years? Probably not.

But the idea that finance as a business and creator of wealth is going anywhere is, well, ridiculous.

4/10/13

I'm optimistic...I'm thinking we'll be out of this recession within 2 years max. Of course, I'm optimistic in the sense that I believe in Obama.

4/10/13

Hey Patrick,

Thanks for the post. It was quite insightful.
You mentioned that lots of IB, PE, and HF jobs are being lost. However, do you think that upon a new economic expansion - all these jobs will come back?

ideating: What do you think pay will be on different parts of the scale? Whats a 30-50% comp trajectory?
So far pay has dropped about 20-30% - which is quite good considering the conditions.

industrial-takeover: Being out of a recession in two years max does not entail the return of the jobs and opportunities in question. You may have faith in Obama - but have faith that a liberal controlled Congress with a liberal president will bring liberal amounts of regulation (forgive the pun).

Calling the Wall Street collapse a blessing is ehh....somewhat presumptuous. You have to remember that opportunity cost, etc. is relative to whatever values you place on certain things. What really has been lost is opportunity - and opportunity being lost in any form is a bad thing. From my experience with them, IB-types are not teachers and restaurant owners. If anything there may be a massive switch to consulting, law, politics, or those types of careers. Apparently there are jumps to engineering and mathematics already taking place.

4/10/13

i think what's also interesting and scary is: where are all these highly educated but newly fired PE, hedge fund, and IBers going to go?

the financial services industry is going to shrink for the forseeable future, and probably will never be as large as it was in '06-07.

finance gives you a skill set, but are there enough jobs out there to absorb these people? it's not like they're the type of people to go work for obama's infrastructure programs...

i wonder...

4/10/13

Here is the way I look at it: Do you think that within the next decade the world economy will be in better shape than it was at its peak in 2007? I do, which means that there will be more deals, bigger deals, more need for capital, etc. then there ever was.

Sure, things suck right now, but I actually think that now is the best time to enter into banking. An MD once told me that you should not worry about how much money you are making in your first few years.

Think about it, if you begin in 2009, by 2012 your third year will be ending and hopefully the economy will be picking up by then. If it does then there will be a HUGE shortage of qualified employees in financial services. This will lead to direct promotions to associate, and other banks, HFs, PEs fighting over the limited talent pool. By the time you hit VP level, the economy will be in full blast while there will not be enough qualified VPs, except for those that go into the industry right now. You will be rewarded if this does happen.

Hang in there guys and keep your head up, yeah you might be "only" making 100K your first year, but would you rather be making "big bucks" as an analyst or as a VP. Five years from now, you all will be laughing at those who chose to do engineering, math, etc. because they went the "safe" path.

Look at the accounting profession seven years ago after Enron, Worldcom and others; it was in a similar state to what banking is in right now. Needless to say the accounting profession bounced back and is now one of the most attractive professions.

This is my optimistic view on things, and I am sticking to it. Is it really that unrealistic? Any thoughts?

4/10/13

I don't believe investment banking will come to an end either but my point is will it still happen at a scale similar to the past few years? Surely, entrepreneurs will want to go public and firms will want to raise debt, and investment banks will exist to help them do so, but obviously investors will not be as willing to shore up capital to purchase a junk bond. All I'm saying is that capital will not be handled at such grand amounts. Also, one of the key reasons bonuses are high is because of leverage right. And we're seeing that since that is going down, MDs won't be able to make as much. Also HF/PE managers will continue to make big bucks but I'm not as sure if they will charge the same fees in the future? I mean once you've disappointed an investor, the investor is going to restate terms right. So, although, they will have the capacity to make a ton of money (10% of of whatever huge amount is still a big amount), it's certainly going to be less. I understand that the best will always make the most and this is certainly true, but I also believe that compensation will be very intricately tied with long term performance, i.e, prop traders make a ton of money in one year and the next year they lose a ton of money. The prop trader isn't held liable for his loss, and worst case scenario he loses his job, but he still walks away with a huge paycheck from the previous year, so essentially big banks may not dole out super huge pay checks in one year and may instead give it out over a period of time. I do retract the bit about people not making millions, because they will continue to do so, but as far as seeing 10 million dollar bonuses for MDs or top traders, I'm not so sure anymore.

4/10/13

I agree with everything you've said. The levels of leverage we've seen in the past won't return and neither will the bonuses.

4/10/13

Hey SAC. The bonuses are still here though. And they are still well above the rock-bottom 2000-2001 levels (I think it was 00-01). Or, perhaps - the 2008 level bonuses will not return?

4/10/13

Ouch! Just read this Bloomberg article...:

Bonuses expected to fall 50%. Never mind the minus 20%-30% from 2007! That translates to considerably less [total compensation] than $60K for most first year analysts [including boutique] - perhaps even in the $30K-$50K range. Those Bulge Bracket VP, high-level associates, administrators, etc. will now be making $200K-$600K, most of them around $300K [total compensation], which is a long shot from the previous $1M+ total compensation.

These salary figures are based on the Careers-in-Finance IB Description page (which seem to be somewhat skewed upwards, and very possibly out of date).

What are people's thoughts on this?

4/10/13

You should probably lower your expectations in terms of comp. Non-analyst bonuses are coming out soon so that will be a good indicator of the drop in analysts bonuses this year, but I can tell you that no first year analysts are expecting a 50k bonus and no first year associate is expecting to make 200k this year. Regardless of your long-term outlook on the industry, I think it's safe to say that your view on the current state of banking and high finance is too optimistic

4/10/13

hehe...I meant $50K total compensation (salary + bonus)...
I think it would be safe to say that a fair amount of first-year analysts will be getting over $60K total compensation - and a fair amount of analysts will be getting less than $40K this year.

*I did word that poorly; I inadvertently implied that the figures I listed were bonuses. (editing...)

Certainly no first level associates will be getting $200K this year, probably more towards $100K; its at higher levels where people will really start to feel the differences in bonuses.

I though there already were non-analyst bonuses. I friends doing IT work for Goldman-Sachs, JPMorgan, and Blackstone who claim to get bonuses of 10%-15% of their base salaries.

4/10/13

Ray, I think you're a bit confused (or maybe I am) but base salaries for analysts are generally around 60k. Total comp given worst case bonus scenario would still be =/> base salary. Not sure how you figure a fair amount will be getting less the 40k.

Ray Murphy:

hehe...I meant $50K total compensation (salary + bonus)...
I think it would be safe to say that a fair amount of first-year analysts will be getting over $60K total compensation - and a fair amount of analysts will be getting less than $40K this year.

*I did word that poorly; I inadvertently implied that the figures I listed were bonuses. (editing...)

Certainly no first level associates will be getting $200K this year, probably more towards $100K; its at higher levels where people will really start to feel the differences in bonuses.

I though there already were non-analyst bonuses. I friends doing IT work for Goldman-Sachs, JPMorgan, and Blackstone who claim to get bonuses of 10%-15% of their base salaries.

4/10/13
WxOnWallStreet:

Not sure how you figure a fair amount will be getting less the 40k.

[/quote]

Sure man, those at smaller boutiques get that much. But I suppose I should probably stay in the context of Bulge Bracket banks and larger boutiques, which do have a base salary of about $60K.

On another note, I'll do a few quick calculations. In 2007 top bonuses for first year analysts were $90K (some sources show less, some more - 90 is a good conservative number) for a total compensation of $150K. Then they dropped 20%-30% (let stick with 25%) to $68K for a total compensation of about $128K. This year they are expected to drop 50%, so that would be about $34K for a total compensation of about $94...larger boutiques would probably make about $70K total compensation. Below those, it varies greatly.

Maybe I was too pessimistic. :(

4/10/13

Ray - no need to keep making assumptions....it's going to be a range, not a specific # for a specific type of bank. Did you know that some boutiques actually pay higher than BBs? Sure, some boutiques outside of NYC have a base of $40k, so the total all in comp might be around $70k...but to say "larger boutiques are 'about' $70k" is just guessing. I worked at a "larger boutique" in 2002 and made $95k all in my 1st year, for example.

4/10/13

I wasn't quite making assumptions - I just took a crude average of what percent banks like Piper Jaffray made compared to banks like Goldman-Sachs on the different surveys. While certainly not a universal method - it did give me a rough estimate of BB vs. large boutique. I certainly wasn't trying to denigrate boutiques vs. BB banks.
But I had no idea that some larger boutiques paid more than Bulge Brackets, that totally new to me.

4/10/13

Its all about the cycle. I think eventually larger deals will happen and bigger LBOs and more capital will be pooled and tossed around.

Look back at how JP Morgan spent the last years of his life... testifying before senate committees on the existence of more/less regulation and the creation of the current set-up they have at the fed and treasury for regulation. The markets were all messed up and the government stepped in and fixed things.... then 20 years later the great depression hit.

So... its all about cycles... the good times will come back... just try to position yourself so that you are in a place to take advantage of the upswing when it comes back and learn a lesson from what you've seen go on lately.

4/10/13

financial capital is just not as valuable anymore; the fundamental tenets of capitalism are being questioned at their roots, and the concept of applying leverage to, quite literally, create something out of nothing, is no longer the tool it once was, in the financier's playbook. if you are wondering where the future of business is going, no one can answer with any certainty, but i would point you to a great article by umair haque: http://discussionleader.hbsp.com/haque/2008/12/how...

4/10/13

I've followed Umair Haque for a while and although he's a smart guy, I disagree with most of his views. He makes observations on a very small part of the economy and tries to apply them broadly.

He once proclaimed that Etsy was the new Google and that it would spark a new revolution. Are you fucking kidding me?

Like I said, he is intelligent and has interesting ideas, but do not rely on him for any kind of critical analysis.

4/10/13

As far as my views, I think the short term outlook is pretty shitty. Compensation will be down for a while due to regulation, social pressure and decreased demand for talent. Dealflow should pick up in a year or two due to the need for PE firms to unload their portfolios built up during the boom, as well as the accumulated need for issuance of new debt and equity. After that, I am thinking that things will be stable but nothing more for a while.

I feel that it is a terrible time for people to get into finance if they just want to do their 2-4 years and get out. However, for the people willing to stick it out, finance is tremendously cyclical and the good times will return some day (just not for a while). It is obviously much better to hit that zenith when you are making the big bucks. Also, for current or upcoming 1st years, there will be pretty few surviving analysts of your vintage, giving you more leverage when things get better down the road.

4/10/13

Yeh, I've come across some Umair Haque. The guy is smart - but somewhat...naive. Most of the pieces that I have read from him are wishy-washy. A while back there was a blog from him burning applied econometricians, and I didn't like that too much (as a Statistics + Economics double major), and he regularly burns capitalistic characteristics.

Typically when I hear stuff like "Next-generation businesses are built, instead, on human, social, natural, and cultural capital" I quit taking it seriously. The only time I heard the words "social capital" and "cultural capital" being used was in my Intro. to Sociology core-class back in Freshman year. I've taken some upper level Econ classes (albeit quantitative economics) and never heard those words used. I have no clue what "natural capital" means. But of course, businesses are currently built, partly, on human capital.

While we probably wont be seeing obscene amounts of leverage being used (Goldman 36X), using leverage to "build something out of nothing" will always be common.

4/10/13

but i just don't think you're right. i think it's naive to think things will stay the same after something like this; it sucks for those of us that work on wall street, but for better or for worse, this really is the death of an era. honestly, how can i blame you; there was a solid 2 years after the great depression had set on, before people were willing to admit to themselves the depth of what they were going through. so in fact, your reference to umair's naivete is kind of ironic, given historical context. in any case, i hope you guys are smart enough to move on to fundamentally value-creating industries; many i know have already done so.

4/10/13
wallstreetguy25:

but i just don't think you're right. i think it's naive to think things will stay the same after something like this...this really is the death of an era. honestly, how can i blame you...i hope you guys are smart enough to move on to fundamentally value-creating industries; many i know have already done so.

No one here is questioning whether or not Wall Street will look the same; it will surely look different. But, it's pretty safe to bet that careers in finance/economics/business - especially Wall Street - will make more money than other careers (except for, perhaps, medicine). The topic is what will investment banking look like in the future; specifically, will there be the same opportunity to get in, and the same compensation?

Really, how many jobs will pay you $60K + bonus straight out of college? Hell, how man jobs will pay you $60K straight out of college?

I'm not sure why people claim finance is not a "fundamentally value-creating [industry]." I would be creating no more value if I were working for Transocean International stochastically testing oil-tracking techniques, than if I were hedging investments for JP Morgan FRM. Nor if I were statistically advising Amnesty International on how to determine levels of worldwide discrimination and human rights abuse.

4/10/13

how attractive does ibanking look now compared to consulting or law? in 5yrs, 10yrs?

4/10/13

The new issue of The Economist has a pretty good summary of IB to date, good read, pretty insightful/depressing.

http://www.economist.com/finance/displaystory.cfm?...

Take it for all it's worth.

4/10/13

I think it's naive for anyone to think that, in the long run, finance (as a broad term to apply to traditional banking and lending, investment banking, private equity, M&A, venture capital, trading, etc.) is going to be a substantially smaller or less well compensated industry. We humans have such short memories, don't we? So many of us refuse to acknowledge the past.

Let's take savings and loans from the 1980s as an example. The traditional simple capital structure--loans held in portfolio - deposit costs = profit--favored the creation of literally thousands of savings and loans institutions. Macroeconomic factors--high short-term interest rates--served as the death blow to that model. In turn, did banking and lending die? Certainly not! Banking and lending were simply peformed in a different form.

Acting under the assumption that Christ doesn't return or that the world doesn't end--who knows?--the industry (as a broad set) will simply lick its wounds, reform, repackage, and reload. And in 20 years or so, the bubble will burst again on that repackaging and we'll all once again wonder--after the 1,000th major bubble and/or financial collapse--if this is the end of industry and big bucks as we know it. Not since the beginning of banking, in all its failures and through all the mega rich the industry has created, has the financial industry ceased to produce intelligent, hardworking people substantial returns.

Just the 2 cents of this humble state university graduate.

4/10/13

I tend to agree with the you but also feel that the gravity of this current situation will result in systematic changes, for both the internal and external banking landscape, that will make the industry less likely to rebound quite as quickly as it has in the past. I firmly believe that we are just climbing down from the tip of the iceberg now and finding out how bad it really is; I pity anyone that believes otherwise.

Take it for all it's worth.

4/10/13

to dispute in the above, so i'll just refer you to articles i think are interesting (regardless of direct relevancy):

http://paulgraham.com/hiring.html

http://paulgraham.com/boss.html

http://www.leavewallstreetjoinastartup.com/ (if you're looking for a job)

http://discussionleader.hbsp.com/haque/2008/04/str... (this kind of knocks the keystone out of ray murphy's argument above, at least the latter half)

http://www.paloaltoonline.com/news/show_story.php?...
("That's the challenge to young people in a school like Stanford -- to develop a social business, because that's where the future lies," Yunus said. -would you like to call him naive as well?)

i mean i can go on, but i don't care too, because this is more than enough to make anyone who is smart enough to get into high-finance (as it exists today), take that extra step and be smart enough not to. i'm not challenging what is or isn't the opportunity in investment banking 10 years from now; i'm trying to encourage whoever is smart enough to enter that field not to waste their time being on that side of the fence

4/10/13

Wall Street can be seen as a creature of sorts. Over many years, it transforms, evolves, and changes, sometimes durastically, to suit the demand of investors/others.
There have been crisis in the past, but Wall Street always rebuilt, and became something different. It's a place where the flow, and
allocation of capital is determined by trends (e.g., tech, S&L, RE, etc.). Trends are temporary, and a new trend always surfaces.
In the mid 1990s, and very early 2000s, tech was the place to be: tech banking, startups, and venture capital, needless to say, such
growth was unsustainable, and the tech bubble burst, triggering a recession. The same thing happened for real estate/mortgage/ABS
in the years that followed 9/11. Greed both inflates, and deflates. In all the past 'incidents', Wall Street rebuilt itself on something else.
The problem today is that the government is socializing everything (Obama will further exaserbate the situation), from banks, healthcare,
the mortage industry, and everything else. Capitalism has always been the force behind Wall Street's restructurings. But if capitalism does not exist, or exists
to a lesser extent, Wall Street, and the economy will take longer to recover, because of the government's intrusion into the private sector
(the government always messes things up w/ un-nessacary bureaucracy, incompentance, and corruption, and conflict of interest. Wall Street must heal by way
of inginuity, free markets, and perserverance. HFs, and PE firms will never disapear, b/c there is no reason to destroy these investment
vehicles. To touch on the theme of greed: the wealthy, endowments, pension funds, institutions, and university funds will always require
an 'edge'. Higher returns are ways to acquire this 'edge'. Even if HFs, and PE firms poof away, a new investment vehicle will take their place.
In this way,

http://www.afr0jacks.com/
Afro Jacks

4/10/13

What exactly do you define to be a value-creating industy...one that involves manual labor and the creation of a physical product? What are your views then on the Tobacco indsutry?

There was always a part of me that disliked the way Martin Sheen's character in Wall Street described the investment banking industry.

4/10/13

Two 40hr/week 30k + bonus jobs will get you 60k+ out of college AND you'll be working less hours than IB. Point is, 60k+ out of college is fair compensation for the time and effort put in by IB analysts.

Take it for all it's worth.

Investment Banking Interview Course

4/10/13

Their restructuring isn't really 'prestigious' enough to draw my attention to their mundane and trivial details... :-)

4/10/13

The focus will be allocating more capital to the advisory side of things. That usually means higher payouts and more focus on trying to win deals by recruiting deal makers. Barc doing well in m&a although their markets side of the business is shrinking. On the whole if your in advisory it is a solid place to be.

4/10/13

It's really hard to say what the future direction will look like and is heavily dependant on the political reality of the next few years. Barring some disaster, Obama will win this year and the GOP will likely come back to power in 2016. For now, the banks are cutting expenses, so non core and non growth areas will get hit hard. When the environment cools, business in general, along with banking, will pick up...but I really don't know what sectors. The new regulations will put a damper on the public markets, but private wealth - HF/PE/etc - will really stand to flourish because they aren't being hammered by all of the new rules. Ironically, by trying to protect the middle class, a lot of the new regulations are putting a ton of power into the hands of non public finance.

There's a lot of noise being generated by the energy sector - natgas especially, retirement of the boomer generation, and international sectors, but it remains to be seen how American banks will specifically cash in on the above. There are other developments, like student loans and the federal debt, that banks will have a role in, but I don't know enough to really speculate how. I spent all weekend trying to wrap my head around the big picture and exactly what groups stand to really thrive in the coming decades but I can't really get a feel for the coming lay of the land, so I'd welcome anyone's thoughts on that subject.

The short term is fucked, so take what you can get, but where is the growth going to be in 2, 10 and 15 years? I don't know, I'm curious what everyone else thinks as well.

Get busy living

4/10/13

i'm jumping to HF in the fall.

4/10/13

Use the search function. The future is fine.

4/10/13

in short ibanking will lose hype and things like entrepreneurship, venture capital, private equity will take the cake

it's a time for creating, not buying and selling

this is the part of "Wall Street" where Charlie Sheen goes to jail, and realizes from his dad that it's better to "create, than buy or sell"

John Wikowski

4/10/13

From what I've heard, one of the things that attracts people to investment banking (in addition to the pay) is exit ops. After completing an analyst program, it is easier to plug into VC and PE. In that regard, people may still be willing to work grueling hours in order to capitalize on great exit opportunities.

4/10/13

there have been so many of these same dumb posts in the past few months...sigh

4/10/13
xqtrack:

there have been so many of these same dumb posts in the past few months...sigh

funny that's how i've felt about your comments in the past few months...sigh

We're about to enter a Great Depression.
Don't you want a president who's already dressed for it?

I'm making it up as I go along.

4/10/13
Cornelius:
xqtrack:

there have been so many of these same dumb posts in the past few months...sigh

funny that's how i've felt about your comments in the past few months...sigh

We're about to enter a Great Depression.
Don't you want a president who's already dressed for it?

Haha.

4/10/13

banking will still be sought after... just look at the number of people that are still calling and wanting informational interviews this year. no drop off since last year. campus recruiting keeps saying they have more applications than ever.

people want to do banking... its a great set up for the future (good experience). the pay may shrink but if thats true then as an associate my 95k salary plus 50k bonus (worst case) is still better than going to law school or being a consultant.

4/10/13

I'm actually doing a research paper on the future of the investment banking industry. Does anyone have any insightful articles that may help me? Thanks.

4/10/13

this is and has been old news for quite some time now. fees for both capital markets and advisory work have been steadily falling over the past 10 years.

as you can probably evidence from some of the past posts i've made on this board, i'm not a huge proponent of the idea of bankers adding a huge amount of value to a corporation's strategic planning function. in general, while bankers are good at procedural, administrative, and execution aspects of deals, they are often short on truly insightful and original deal ideas.

what you also see a lot of these days is people jumping ship from one firm to another. thus, if the goldman telecom group leaves the firm to go and join Wachovia, or some Morgan Stanley healthcare bankers leave to go join BofA, does that all of the sudden make them "lesser" bankers or less qualified because their new firms don't have the cachet of a GS or ms?

with talent these days getting diluted (i.e. goldman guys going to wachovia, etc.) and with the general increase in the number of new boutiques, companies will have more and more options for advisory work as time goes by. as with any other type of saturated market, prices will have to give.

you might like to think that bankers are in high demand and that clients are continuously calling on them for their high level insights and strategic advisory brilliance, but the fact is that for every capital markets intensive client that's out there, there are 20 plus bankers knocking on his door. as a result, banking has become highly commoditized and there are plenty of options for advisory work.

at any rate, it's probably quite foolish to be worrying about the future situation of the banker. while certain fields might become commoditized to the flow of intellectual capital (i.e. people) or due to greater transparency (witness the demise of the equity trader/salesman and now muni traders/salesmen and high grade bond traders/salesmen with the advent of TRACE--all of a sudden clients have access to the "spread" and know how much bankers are ripping them off by), bankers have shown time and time again their ability to come up with obtuse and non-transparent financial instruments which can be used to screw their clients out of their money (witness the rise of mortgage backed securities in the Michael Lewis days and the rise of credit default swaps today).

in closing, what you're forgetting about banking is that fees are only disclosed upfront part of the time (i.e. m&a, loans, bonds, equity). as far as stuff like derivatives or foreign exchange go, only the MOST sophisticated clients will EVER have an idea of how much of a spread you're putting into the transaction. and even then, with certain instruments (such as credit default swaps), even the GEs of the world may never know until the market gets built out more and transparency develops. at that point, the commoditization cycle will begin anew.

4/10/13

All true. "Commodity" is the special word of the day.

Next, the analysts will be outsourced to India!

4/10/13

Exactly. We're reaching the end of the ibanking lifestyle as we know it.

4/10/13

I should make a lending tree website for Ibanks.

"When Ibanks compete you WIN!"
"Get 3-4 pitch books within 24 hours1"

---------------------------------------------------------------

Disclaimer: The post above has been made by someone who is not currently employed in IBD, and has not had an interview yet...

4/10/13

If I were Patrick and somebody showed me those numbers I'd rip that pitchbook up and make the MD eat it. Somebody didn't do 7X EBITDA.

4/10/13

I think it would be nice if you could go online and see what deals are currently being shopped. I bet the increased access to information would make for higher prices for the sellers.

Consultant to a Fortune 50 Company

4/10/13
alexpasch:

I think it would be nice if you could go online and see what deals are currently being shopped. I bet the increased access to information would make for higher prices for the sellers.

I think that would lead to a regulatory nightmare. If people knew what deals are being shopped, people would bid those stocks up until they aren't affordable for anyone anymore at which point insiders would sell and the stock get absolutely pummeled. A solution to that would be suspending trading in a stock as soon as it is announced as being shopped but that doesn't exactly strike me as promoting a free market.

4/10/13
GoodBread:
alexpasch:

I think it would be nice if you could go online and see what deals are currently being shopped. I bet the increased access to information would make for higher prices for the sellers.

I think that would lead to a regulatory nightmare. If people knew what deals are being shopped, people would bid those stocks up until they aren't affordable for anyone anymore at which point insiders would sell and the stock get absolutely pummeled. A solution to that would be suspending trading in a stock as soon as it is announced as being shopped but that doesn't exactly strike me as promoting a free market.

I was thinking more for private middle market companies that aren't publicly traded. I also think the whole insider trading thing is retarded and that it actually hurts the market. Let the information out, we want markets pricing things as accurately as possible as soon as possible.

Consultant to a Fortune 50 Company

4/10/13
alexpasch:
GoodBread:
alexpasch:

I think it would be nice if you could go online and see what deals are currently being shopped. I bet the increased access to information would make for higher prices for the sellers.

I think that would lead to a regulatory nightmare. If people knew what deals are being shopped, people would bid those stocks up until they aren't affordable for anyone anymore at which point insiders would sell and the stock get absolutely pummeled. A solution to that would be suspending trading in a stock as soon as it is announced as being shopped but that doesn't exactly strike me as promoting a free market.

I was thinking more for private middle market companies that aren't publicly traded. I also think the whole insider trading thing is retarded and that it actually hurts the market. Let the information out, we want markets pricing things as accurately as possible as soon as possible.

No beef there although deciding what info should be considered public in real-time would be a formidable task.

4/10/13

This thing is obviously horeshit, doesn't take into account the value of the content and business located at the domain. I'd pay 10x the stated $1.5 billion for Facebook. And Groupon at $5 million? I'd hit that bid harder than a Saigon whore.

- Capt K -
"Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham

4/10/13

pornhub>wso lol?

edit: won't let me :(

4/10/13

this IS depressing.. ugh

4/10/13

Stop worrying. The banking and larger, financial services industry is a function of the larger global economy. It coincides with the rhythm of the economy. While there may be structural changes going on, I think we are already in that shift and will continue to do so. With that said, your prospects as an entry-level analyst will not change, but your future careers goals might. All this means is you have to continue to work at being the best candidate and networking your tail off. Nothing has changed.

4/10/13

That article is basically saying that everyone is hiring, some at a slow or slower rate. Absolutely useless crap. It didn't even mention the fact that every other BB/boutique has been beefing up its energy group.

Here is a great post about hiring written by a real MD: //www.wallstreetoasis.com/forums/some-historical-con...

4/10/13

Hiring only for Emering Markets Divisions, but they should focus on core strengths. Nothing learned...

Avoidance

They have to strengthen their Core Capital and reduce risks .

Who the fuck cares of the EMs, no one can tell me that you're making 90% of the whole money (IB) there !

I dont want to know what happends to all the people in IB over there in China and South-East Asia, when China falls in recession.

There is no infinite guaranteed growth for China, no 10% growth rates up to 2030. It's like the tech bubble, everyone want to get onto the train, in fear of losing the big deal. But there is a "China bubble"

When Jim Rogers said that commodities were the ultimate investment, everybody laughed, most people thought he must be crazy.

4/10/13

The future of Investment Banking is strongly influenced by government and government institutions.

In the USA, the homeland of capitalism, state control is omnipresent.

The state institutions became too powerful.

FED,FDIC, SEC, CFTC, etc.

The regulation must be stopped, a dry-out of the markets seems to be possible, when regulation continues so strong and fast.

In Europe there are radical tendencies.

Is there a new form of capitalism, a reformation of the "old" capitalism ?!

4/10/13
RexAlpha:

The future of Investment Banking is strongly influenced by government and government institutions.

In the USA, the homeland of capitalism, state control is omnipresent.

The state institutions became too powerful.

FED,FDIC, SEC, CFTC, etc.

The regulation must be stopped, a dry-out of the markets seems to be possible, when regulation continues so strong and fast.

In Europe there are radical tendencies.

Is there a new form of capitalism, a reformation of the "old" capitalism ?!

Regulations will decline as soon as the financial sector proves it can police itself and limit its risk exposure. When those pigs start flying I'm sure you'll get your wish.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

4/10/13
duffmt6:
RexAlpha:

The future of Investment Banking is strongly influenced by government and government institutions.

In the USA, the homeland of capitalism, state control is omnipresent.

The state institutions became too powerful.

FED,FDIC, SEC, CFTC, etc.

The regulation must be stopped, a dry-out of the markets seems to be possible, when regulation continues so strong and fast.

In Europe there are radical tendencies.

Is there a new form of capitalism, a reformation of the "old" capitalism ?!

Regulations will decline as soon as the financial sector proves it can police itself and limit its risk exposure. When those pigs start flying I'm sure you'll get your wish.

I'll hope so

4/10/13

I'm operating under the assumption that the worst of the wholesale bloodletting will be over within a year, and by the end of the summer at a lot of firms. Many have already trimmed out the fat and some are almost bare bones. The restructuring of the general economy and the tighter regulatory environment are challenges, but will also open up new opportunities, just like in times past.

Unless, of course, the global economy collapses, in which case the LAST thing any of us will be worrying about is our jobs......

Get busy living

4/10/13

just heard one of my best connections at a BB NY just got laid off...FML.

4/10/13

Its tough to predict what an entire industry will do. However, the best will always make money in this business. The 60s and 70s were tough times for Wall Street, however, great investors/traders/bankers did well. Provide value to your clients and customers and you will be rewarded.

Be the best at your job and learn to live within your means (aka your base). Everything else will take care of itself.

4/10/13

Its definitely tough these days. I guess I was lucky that my first 5-6 years in this industry had virtually no threat of layoffs, and I received my peak bonus in 2007 (not total comp, just bonus). I am not going to lie, this continued downsizing has really got me down lately. Its been 4 years now since I sat on a credit derivatives PB desk when the first cracks were showing- when this was a "subprime" problem, and for the first time had to deal with a Margin Call (though by the end of the day, about 10 more came through).

The bloodletting hasn't stopped, and its kind of killing morale all over the place. I feel like the industry has just gotten a lot more serious in the past few years, people used to tell jokes, ask about each other's families, etc. yet the other day I tried to go a little outside the box and ask a coworker what he was doing over the weekend and he looked at me like I was asking him this crazy personal question. I chalked it up to my last group just being a bunch of socially maladjusted workaholics who didn't have anything in their lives besides work (and that was definitely true), but my new group isn't a whole lot better.

I just try to hang in there and take comfort in the fact that my comp has still managed to grow about 15% a year since I got in this industry, and many others are far worse off.

4/10/13
someotherguy:

Its definitely tough these days. I guess I was lucky that my first 5-6 years in this industry had virtually no threat of layoffs, and I received my peak bonus in 2007 (not total comp, just bonus). I am not going to lie, this continued downsizing has really got me down lately. Its been 4 years now since I sat on a credit derivatives PB desk when the first cracks were showing- when this was a "subprime" problem, and for the first time had to deal with a Margin Call (though by the end of the day, about 10 more came through).

The bloodletting hasn't stopped, and its kind of killing morale all over the place. I feel like the industry has just gotten a lot more serious in the past few years, people used to tell jokes, ask about each other's families, etc. yet the other day I tried to go a little outside the box and ask a coworker what he was doing over the weekend and he looked at me like I was asking him this crazy personal question. I chalked it up to my last group just being a bunch of socially maladjusted workaholics who didn't have anything in their lives besides work (and that was definitely true), but my new group isn't a whole lot better.

I just try to hang in there and take comfort in the fact that my comp has still managed to grow about 15% a year since I got in this industry, and many others are far worse off.

Finance may be the center of the maelstrom but you could substitute almost any industry out there for this and it would ring true. I don't have a crystal ball to tell you if finance will ever go back to the way it was, but these aren't problems that are unique to banking, trading, or Asset Management. We deal with liquidations and workouts for portfolio companies on a regular basis and every employee has a story about how things used to be so great and what a good company it was once upon a time.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.

4/10/13

The Future of Investment Banking

In the 80s it was the bond market which guaranteed huge profits

From 2003-2007 it was structured finance...

Wall Street will find new ways of profit-making.

I point with my finger on the new GS Division Investing&Lending, to show just an alternative to commodity markets or real estate

Huge Activities in China and India

4/10/13
RexAlpha:

The Future of Investment Banking

In the 80s it was the bond market which guaranteed huge profits

From 2003-2007 it was structured finance...

Wall Street will find new ways of profit-making.

I point with my finger on the new GS Division Investing&Lending, to show just an alternative to commodity markets or real estate

Huge Activities in China and India

While I disagree with your somewhat incoherent rant against government regulation earlier, I certainly agree with you here. Wall Street adapts faster than any other industry to changing political, regulatory, economic environments. Each new peak and valley is predicated with the rise and fall of some new asset bubble(s). When one pops another inflates in its place. I'm not saying this is a good or bad thing, it just means that there is always money to be made (and lost) somewhere and Wall Street headcount must be constantly reallocated to keep up.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

4/10/13
duffmt6:
RexAlpha:

The Future of Investment Banking

In the 80s it was the bond market which guaranteed huge profits

From 2003-2007 it was structured finance...

Wall Street will find new ways of profit-making.

I point with my finger on the new GS Division Investing&Lending, to show just an alternative to commodity markets or real estate

Huge Activities in China and India

While I disagree with your somewhat incoherent rant against government regulation earlier, I certainly agree with you here. Wall Street adapts faster than any other industry to changing political, regulatory, economic environments. Each new peak and valley is predicated with the rise and fall of some new asset bubble(s). When one pops another inflates in its place. I'm not saying this is a good or bad thing, it just means that there is always money to be made (and lost) somewhere and Wall Street headcount must be constantly reallocated to keep up.

Im against regulation within financial markets, because it results in sinking personal income (mine)

So far from that point I'm a very antisocial person. But as a human being my concern for the people is more important.

Under George W. Bush and Reagan we saw huge deregulation, which resulted in a increasing income gap and great inequaltites.

Okay, we've got the golden years in IB and Real estate, but people should always look from what the majority is suffering/benefitting.

I'm not a fan of Barrack Obama, but he's the best man America can choose to solve the current problems.

No McCain, Palin or Romney will do it better.

I'll hope that Obama stops Ben Bernanke QE Program, cause its not the right way to solve the current problems.

Of course IB is doing better without regulation, cause you can take higher risks and generate higher profits. But is that appropriate ?

4/10/13
RexAlpha:
duffmt6:
RexAlpha:

The Future of Investment Banking

In the 80s it was the bond market which guaranteed huge profits

From 2003-2007 it was structured finance...

Wall Street will find new ways of profit-making.

I point with my finger on the new GS Division Investing&Lending, to show just an alternative to commodity markets or real estate

Huge Activities in China and India

While I disagree with your somewhat incoherent rant against government regulation earlier, I certainly agree with you here. Wall Street adapts faster than any other industry to changing political, regulatory, economic environments. Each new peak and valley is predicated with the rise and fall of some new asset bubble(s). When one pops another inflates in its place. I'm not saying this is a good or bad thing, it just means that there is always money to be made (and lost) somewhere and Wall Street headcount must be constantly reallocated to keep up.

Im against regulation within financial markets, because it results in sinking personal income (mine)

So far from that point I'm a very antisocial person. But as a human being my concern for the people is more important.

Under George W. Bush and Reagan we saw huge deregulation, which resulted in a increasing income gap and great inequaltites.

Okay, we've got the golden years in IB and Real estate, but people should always look from what the majority is suffering/benefitting.

I'm not a fan of Barrack Obama, but he's the best man America can choose to solve the current problems.

No McCain, Palin or Romney will do it better.

I'll hope that Obama stops Ben Bernanke QE Program, cause its not the right way to solve the current problems.

Of course IB is doing better without regulation, cause you can take higher risks and generate higher profits. But is that appropriate ?

GW Bush added MILES of Federal Regulations. He was a Republican, not a conservative, president. There is a difference.

Reagan's economic boom added 19 million jobs to the private sector. Main Street did quite well under Reaganomics.

Income inequality stats are a SNAPSHOT. They do not track the movement of INDIVIDUALS from poverty to wealth. An absolute majority of the people who were in the bottom 20% in 1975 have also been in the top 20%.

Barack Obama is an arrogant cloud of empty rhetoric who isn't fit to run a Quik-E-Mart.

McCain and Palin aren't running. I wouldn't vote for Romney. But Obama is on a Carter-like course to a failed presidency.

"The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher." - Oscar Wilde

4/10/13

Thank you for crushing all my hopes and dreams

I am pretty young and just breaking into Finance industry and I am starting to realize how hard it will be to compete for a job in investment banking or sales and trading. This pretty smart guy once said, "In the middle of difficulty lies opportunity" and this hold true for wall street. We are catching the tail wind of success in certain financial areas and trends go cold. Everyone wants a slice of the pie, and when people see the houses, the cars, and the babes the rich bankers have, they want in. Fact of the matter is the bankers were on the money while it was hot. For all we know it was a "being in the right place at the right time" scenario. Im not saying there is no hope for bankers but it is not the "gold rush" it used to be right now.

I reccommend to younger people to study their economics before job searching and find where they are needed and what will be hot in the future versus what they want to do based on salary. Because this day and age its even getting harder to find the jobs you don't want. A steady job is better than job (especially when you hear about these huge layoff amounts. It is very clear (to me at least) there is demand for many new things emerging and if you can find a place you are absolutely needed you most likely can negotiate a good salary. Also, you need to look at the entire picture and realize where things are headed so you can strategically place yourself somewhere that you can get the return you want. You need to find whats going to be hot and get on it and you can't make these predictions based on the past because things are constantly changing and the world has become a whole different animal with new generations and technology

Bottom line is that if your good at what your doing you will be successful, good bankers will always have a job, and you won't get fired if your adding value to the company.

And also if your daddy was an investment banker in the 80's he probably has enough money for 3 life times so I wouldn't stress. You can always ask him to invest in your entrepenurship like prestige world wide.

4/10/13
hookedup:

prestige world wide.

The first word in entertainment.

  • Management.
  • Financial portfolios.
  • Insurance.
  • Computers.
  • Black leather gloves.
  • Research and development.
  • Security.

I would invest.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

4/10/13

The reply is complete opinion and I could be totally wrong for all I know,

but my point is the future has a lot of opportunity to be successful like the wealty investment bankers we see and I feel like it will become harder to get a banking job and harder to be a good banker making a lot of cake. You have the opportunity now to position yourself in a successful place that may land you yacht like Paul Allen, and a house like Hefners (babes included)

4/10/13
hookedup:

The reply is complete opinion and I could be totally wrong for all I know,

but my point is the future has a lot of opportunity to be successful like the wealty investment bankers we see and I feel like it will become harder to get a banking job and harder to be a good banker making a lot of cake. You have the opportunity now to position yourself in a successful place that may land you yacht like Paul Allen, and a house like Hefners (babes included)

That's the goal......

Get busy living

4/10/13

The Carter years were pretty bad. Then Reagan rocked it.

Who will beat Barry and unleash the US economy again?

"The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher." - Oscar Wilde

4/10/13
veritas14:

The Carter years were pretty bad. Then Reagan rocked it.

Who will beat Barry and unleash the US economy again?

Winning.

That is all.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer
"Your grammar made me wish I'd been aborted." -happypantsmcgee

4/10/13
D M:
veritas14:

The Carter years were pretty bad. Then Reagan rocked it.

Who will beat Barry and unleash the US economy again?

Winning.

That is all.

Reagan rocked it--> For Wall Street and not Main Street (The American People)

Franklin Delano Roosevelt is the only existing politician that can be named a good decision maker concerning economy combined with social concern for the people.

4/10/13
RexAlpha:
D M:
veritas14:

The Carter years were pretty bad. Then Reagan rocked it.

Who will beat Barry and unleash the US economy again?

Winning.

That is all.

Reagan rocked it--> For Wall Street and not Main Street (The American People)

Franklin Delano Roosevelt is the only existing politician that can be named a good decision maker concerning economy combined with social concern for the people.

The Reagan Revolution CREATED over 19 million jobs for "Main Street" through private sector growth.

FDR created low unemployment by drafting millions into mandatory military service, spiked GDP numbers with military production, and restricted consumer choice via rationing. It's easy to have a post-war boom when you are the only economy left untouched by bombs.

"The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher." - Oscar Wilde

4/10/13
veritas14:

The Carter years were pretty bad. Then Reagan rocked it.

Who will beat Barry and unleash the US economy again?

The Republican Party is not beating Barry with clowns like Palin and Bachmann

4/10/13
Devils Advocate:
veritas14:

The Carter years were pretty bad. Then Reagan rocked it.

Who will beat Barry and unleash the US economy again?

The Republican Party is not beating Barry with clowns like Palin and Bachmann

I never nominated them.

"The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher." - Oscar Wilde

4/10/13
veritas14:
Devils Advocate:
veritas14:

The Carter years were pretty bad. Then Reagan rocked it.

Who will beat Barry and unleash the US economy again?

The Republican Party is not beating Barry with clowns like Palin and Bachmann

I never nominated them.

Never said you did, but when you have a Party that would even entertain the idea of putting these people on a national ticket you have a f-ing problem.

4/10/13
Devils Advocate:
veritas14:
Devils Advocate:
veritas14:

The Carter years were pretty bad. Then Reagan rocked it.

Who will beat Barry and unleash the US economy again?

The Republican Party is not beating Barry with clowns like Palin and Bachmann

I never nominated them.

Never said you did, but when you have a Party that would even entertain the idea of putting these people on a national ticket you have a f-ing problem.

I would have said the same re: Democrats/Obama circa 2007

"The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher." - Oscar Wilde

4/10/13
Devils Advocate:
veritas14:

The Carter years were pretty bad. Then Reagan rocked it.

Who will beat Barry and unleash the US economy again?

The Republican Party is not beating Barry with clowns like Palin and Bachmann

I had to laugh so much, but you're so right.

Palin seems to be the dumbest female politician ever

4/10/13
RexAlpha:
Devils Advocate:
veritas14:

The Carter years were pretty bad. Then Reagan rocked it.

Who will beat Barry and unleash the US economy again?

The Republican Party is not beating Barry with clowns like Palin and Bachmann

I had to laugh so much, but you're so right.

Palin seems to be the dumbest female politician ever

Dumber than Cynthia McKinney?!?!?!?

Palin wouldn't get my vote, but there are many dimmer bulbs.

"The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher." - Oscar Wilde

4/10/13