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Why Do You Work on Wall Street?
- "Every dream has its price"
That
is, besides the the women, the parties (Models & bottles baby!),
all the other trappings of wealth and "life in the fast lane."
Earlier today I switched the channel from CNBC over to AMC to watch
the last ~40 minutes of Wall Street, a movie that I, like many of you,
have seen well over a dozen times.
I can't remember the first time I saw it, but it was probably around
late high school or early college, but that's really besides the
point. Every time I, like many of you, watched the movie I get pumped
up and excited, but until today I never really thought about why. I
don't mean excited about the plot twists, the story, or any of that,
its more complicated, or maybe actually more simple than that.
I,
like I imagine many of you, have always been a bit of an achiever. I
was never the smartest kid in AP or Honors classes nor the best athlete
on the soccer or lacrosse field, but with hard work, a little bit of
luck, and some natural gifts, I've always been relatively successful.
I, like I also imagine many of you, did not grow up wanting to be an
investment banker or hedge fund manager; until probably half-way
through high school, I studied computer science and dreamed of starting
my own tech company.
So, what happened? I'd been following markets and recommending
trades to my dad since before my Bar Mitzvah and over the next few
years, I witnessed the frenzy that eventually led to the tech bubble.
We had a Finance/Investment club in high school of which I was one of
the founders where we held an annual virtual investment contest. I
remember quite vividly presenting my rationale for buying Corning (GLW)
as flat-screen monitors were set to take the world by storm. Oddly
enough, I recently got an email from Marketocracy, one of the sites we
used over a decade ago for our investment competitions. One of the
portfolios I set up held Corning and other former tech sweethearts.
When I set it up, I'd named it "Ultra High Risk Fund" or something
along those lines, since I wasn't totally drinking the Kool-Aid. Fast
forward a decade and its NAV is finally back above what it was at
inception. Impressive, eh?
For the remainder of high school and through college I planned on
working in Venture Capital, what I thought (and still do to some
extent) would be a combination of my love of both science/technology
and finance. By senior year I was applying for jobs in not just VC but
Investment Banking and Research, and eventually landed my first gig in
the Investment Bank of one of the large global financial supermarkets.
So that's how I flipped over to the "dark side," so to speak. Now,
what does this have to do with Wall Street, the movie? While I was
watching the latter parts of the film earlier today, it finally dawned
on me, the real allure of working on Wall Street.
For me, and I imagine many of you, it wasn't all about the "Models & Bottles"
(although that certainly helps!). It was - and to some degree still is
- about the (quasi-)intellectual aspect(s) of the job. It's about
busting your ass and working not just harder but SMARTER than the other
guy and winning the proverbial game. That's what its all about,
winning. That's what it really means to be "living the dream:"
outsmarting the competition and, if you do it long enough, getting rich
as hell in the process.
Of course, back in the realm of reality, Wall Street employs vastly
more people in roles where this dream is still just that. There really
aren't that many hedge fund or private equity titans out there,
although there certainly isn't any shortage of those aspiring to become
one. Certainly the advances in technology over the past 20 or so years
have allowed people to trade in virtually any market for their own
accounts (or even OPM) from anywhere in the World, but titans the vast
majority of these traders are not.
As much as those of us who work 'in Finance" are vilified by the
media and "Main Street" - much of it our own fault - deep down, within
most or dare I say all of us lies some inklining of enjoyment of the
(quasi-)intellectual aspect of the job, however repressed or forgotten
it may be. For many, it really may be all about the money and
everything you can do with it, but in the ultimate analysis, how many
people stick around for 10, 20, 30+ years of working lunatic hours with
other lunatics if they're not even remotely interested in the work?
»
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And yes Anal_yst you arrogant c@nt, only you are your ilk understand finance, only you, you are so grand and mighty. You understand finance so much that between 2000 and 2008, your motly crew of financiers managed to collapse the whole monetary system! If thats what people achieve who understand finance, heaven forbid what would happen if mere mortals were in charge! That was sarcasm by the way, I know you're a bit simple. Thankyou for confirming for me the nature of people working in your evil, evil industry. I am quite happy flying aircraft and looking down on you vermin with disgust.
anal_yst,
Please consider using your gifts to repair our broken monetary system.
Thanks
ps chris88, you could help him if he needs any...
I'm concerned at what has been allowed on zerohedge for the past few weeks. This was always a contrarian blog but I've noticed recently an alarming propensity for finance friendly articles. I can't believe the gaul shown by the author of this steaming pile of tripe. I read it thinking that somebody in finance had seen the light, only to find myself being patronized by another wall st whore, who rather than admit the damage created by his ilk, proceeds to defend the indefensible and what the hell are you talking about Chris88! The government didn't abandon Glass steagal unprompted by Wall st, the government didn't create the Fed, the government are just puppets, they have never had the power, the finance oligarchy have always been the ones to pull the strings behind the scenes, to the detriment of the masses. "Give me control of a governments finances and I care not who makes the laws", spoken by Mayer. A Rothschild.
Strictly from a film perspective, "Wall Street" was indeed a good picture ( to be sure, an Oscar winner ), but Oliver Stone has always been a bit over the top. In the genre, my favorite remains "Boiler Room" -- far more realistic a film ( interestingly, one scene has the boiler room crew watching "Wall Street" -- reciting the lines of the characters by heart ).
Another is, of course, "Glengarry Glen Ross." How many of us have known or worked with arseholes the likes of Alec Baldwin's character ?
Fine films, the both of them.
In Boiler Room the fancy but totally empty apartment - apart from a big TV, couch and bottle of vodka was spot on too.
One of the best Wall St. What/How/Whys is Marla's private equity diary/memoir. I recommend reading the entire thing, beginning to end. It's impossible not to learn something useful.
http://equityprivate.typepad.com/ep/2006/02/index.html
Anyway, I've never been a huge Wall Street fan. I never even saw it until ten years after it came out and even then it was mostly out of a desire/necessity to hear the incessant quotations in their original context. I'm much more of a Trading Places kind of guy.
Its about beating the stinking system even if you are a parasite. Finance is over 50% of GDP so flipping stocks instead of hamburgers has kept the lights on.
Its about beating the stinking system even if you are a parasite. Finance is over 50% of GDP so flipping stocks instead of hamburgers has kept the lights on.
Very dissapointed TD et al at zipper hedge let this tripe in the back door
It is infectous.
Always use Universal Precautions.
Bankers and lawyers.
A cancer in and of the body of corporate society.
I must admit, I just love making lots of money
and I like nothing better than a successful trade.
I like it even better than sex.
Wish I could JUNK an entire article.
Voting 1 star just doesn't feel remotely satisfying enough.
Models, is this a joke?? Have you ever been to a "Wall St" party?
"Wall St" sex is just prostitutes.
Are there any famous examples of "models" marrying some "Wall St" bloke? Of course not.
"Models" hang out with the fashion, madison ave, hollywood set - no "model" would be see dead with a "Wall St" bore.
It's hookers from top to bottom on "Wall St".
It's all about your mark: trading is essentially about making the read.
Poker.
FUCK! Hooker Breath!
I am fully in favor of a real free market, without a government. If you are talking about "trading for a profit" by playing a circle game with the Fed/Treasury by flipping Treasuries, I think that is atrocious. However, considering the other stupid things you posted, you just mean trading in general. So when somebody accurately forecasts a future market condition, acts accordingly, and is rewarded, there is something wrong with that? How much liquidity would there be without trading in a secondary market? My guess is not much, but you don't consider that either I guess.
Let's see how the "banker induced" crisis as permitted to happen. The Fed, a socialist institution, hands out cheap money to financial institutions and agrees to always be the lender of last (or first) resort. The FDIC backs deposits at commercial banks. Thus there is literally no incentive, because there is no threat of a bank run, to compete on safety. The government created a financial structure that solely competes on return, and thus it is perfectly rational for these institutions to be as risky as possible to ensure the biggest return (safety and the need to compete for it is removed by the government). Because the government has removed the bank run fear, which punishes exuberance at banks, the banks happily expand credit way beyond the supply of savings - again all because of the government. These artificially low interest rates, courtesy of the government, induce entrepreneurs to lengthen productive processes and take on new projects that are only profitable so long as more and more credit is doled out. However, when the market realizes there are not enough savings to support this production simultaneously with consumption rising, these processes/projects are found to be unprofitable and malinvestment is liquidated. Instead of allowing prices to adjust and send proper signals as to where resources should be allocated, the government does everything in their power to reflate the bubble. The government also, instead of allowing failures to go broke and successful people to take them over, subsidizes morons and keeps them in business. Gee, no way the government caused this crisis. Idiot.
Finance in of itself can be a lubricant and cash flow stabilizer/generator.
THATS NOT WHAT OUR Psycho hyenna bankers have been doing. They have been playing at TRADING FOR PROFIT. And as the bank the only way to win is to Canabalize your customers.
Our generation of bankers is a disgrace, a shameful disgusting group of subhuman no soul criminals.
This article certainly got a bunch of idiotic responses. The common fool falls for the government's blame game of trying to put the blame for a crisis they caused on financiers and foreigners. It's all bankers/the Chinese! Only a true simpleton would buy into it. If you think a crisis of this magnitude would have been possible without the government, you truly have your head firmly lodged in a dark place.
There is nothing wrong with working in finance as a career. There is also nothing wrong with pursuing something because it is remunerative in a monetary sense. The only issue is the government subsidizing, protecting, and bailing out the financial industry or any industry for that matter. Absent that though, let them all compete and let the best rise to the top.
Then there's the ignorance of those who believe finance contributes nothing to "humanity". These people have no understanding of economics, finance, and the productive process. Let's take a brief example. The primary goal of finance is to channel savings from those who have a surplus to those who have a deficit. What role do savings play in the productive process? If you have a productive process that takes, let's say, 3 years in total from the highest order stage to the lowest order (final consumption) without finance (savings), you'd have to wait those full 3 years at the highest stage for the money to flow back from the lower stages and to be paid to all productive factors. Savings, which are efficiently channeled through financiers, pay these factor owners in advance based on their anticipated discounted marginal value product. Thus, the capitalist pig is the one bearing the risk that what is produced from the factors he financed will not sell for more than how much he paid. The factor owners are paid at a discount because the financier is rewarded for waiting. Yeah, finance "contributes nothing"; have fun with a primitive production structure; morons.
"The primary goal of finance is to channel savings from those who have a surplus to those who have a deficit."
Absolutely correct, Chris, the problem being that the financial sector long ago abandoned its duty of financing the productive economy for living parasitically off the taxpayer-financed fraud of centralized, fractional-reserve banking. And why not? There it was for the taking. So they took it. And they will continue to take it until it all comes crashing down around our heads, as it is obviously in the process of doing.
Only in a sound-money economy will finance was again be limited to its proper function. Until then, it's just rearranging deck chairs on the Titanic.
__________
The state can kiss my ass.
+1
50 years ago I would have agreed with Chris. Now, the bulk of Wall St revenue is from trading (derivatives, commodities, HFT, treasuries (free commissions courtesy of the Fed) and so on). This is a net-net loss for society and a net-net (massive) gain for Wall St.
I do however hold certain traditional banking and investment banking, equity investing, VC etc. firms and professionals in high regard. This ties into Chris' comments on "capital allocation" which obviously serves a purpose. But let's not confuse and obfuscate the issue here: today, large Wall St firms subtract from society, period.
Again, well said, Steve.
It's more fun/cathartic to spew inflammatory rhetoric, I've done my share today, but you have clearly articulated the heart of the matter.
As Anal_yst has proven, most Wall Streeters are unaware that they extract far more value than they contribute.
It's not that the financial industry doesn't produce any value at all. It's just that they don't produce anywhere near as much as they extract. Which means that the productive portion of the economy must produce that much more to support them.
And it is frustrating that the financial industry does not realize it. As Upton Sinclair said: "It is difficult to get a man to understand something, when his salary depends upon his not understanding it".
Sinclair's words are spot-on, about as accurate as can be in this day and age. The problem is TPTB know this all too well, and have indebted (either directly via the system, or indirectly via the brainwashing necessary to convince one to believe that taking on a large lifestyle is not only possible, but patriotic and the "right thing to do" in order to be "happy") the average family to the point where people have no choice, in many cases, to turn on each other, to engage in toil that is destructive to the whole, to (primarily) finance their too-big lifestyle, and (secondly) put food on the table.
Keep being a "plus", Paul E.!
Seriously, Chris88? The government is responsible for the bailout? By itself? No participation, contribution, encouragement from Wall Street?
No heavy lobbying? No lavish dinners? No revolving door? No regulatory capture?
Hank Paulson left his position as head of Goldman Sachs to become the Treasury Secretary who was chief architect of the bailout.
Robert Rubin left his position as head of Goldman Sachs in the 1990s to become Treasury Secretary and help spearhead the abolition of Glass Steagall.
The line between government and Wall Street is so blurry that it may as well not exist.
Paul: My point is that this crisis could never have happened without the government. There is absolutely no chance in hell that credit could have ever been expanded as much as it was without the government completely removing all market checks on financial institutions as I explained in my other post. Sure, plenty of the recipients of the subsidies for morons, I mean, bailouts, were more than happy to take them. This doesn't remove the culpability of the government at all, so I fail to see your point.
My point is not to disagree with the critical role that government played in the creation of the environment that lead to the crisis. Agreed, government bad.
My point is that government did this at the relentless persuasion and prompting of the financial industry.
Inept, incompetent and corrupt government is merely the sock-puppet of a powerful monied elite seated on Wall Street.
Do you disagree? Can you?
"There is nothing wrong with working in finance as a career." Sure , as long as you don't think you've invented the wheel and/or warm water. It's just a job that requires a bit above average intelligence , nothing more . And by the way , the math of derrivatives was solved by a physicist who had nothing better to do .
"Then there's the ignorance of those who believe finance contributes nothing to "humanity". These people have no understanding of economics, finance, and the productive process. "
Thx , but I have college degree in economics and professional experience . Don't start me on the epistemological status of economic theory .Sure finance contributes to society in the way you describe . I just value it a lot lower than you do . There are way more important contributions to humanity than providing credit .
Gigliola: Unless you believe finance contributes nothing, that remark wasn't directed at you. I really don't know what "the math of derivatives" has to do with my post, but that's cute. You could have plenty of brilliant people in the world, but without finance and the ability to efficiently allocate capital it wouldn't matter. Those brilliant people who create life saving medicine would be worthless because that medicine couldn't be produced. Lastly, I wouldn't really hold a college degree in economics in high esteem considering the useless crap that's taught in college economics classes. If you are trying to establish credibility, you're better off discussing your professional life.
I absolutely do not hold my education in economics in high esteem my self . Frankly , my other major in applied math has been much more rewarding both intellectually and career wise . If you have modelled huge models (upwards of 300.000 variables and constraints , toss in some combinatorics and stochasticity )of business reality in a big chemical multinational , then you appreciate how utterly simplistic econometric models are and by extension the economic theory behind it . Economic theory and modelling is in the stone age compared to physics . Finance , a tad better , say iron age . And my view on banking happens to coincide with Mike Krieger's view : should be tightly regulated as any other utility like electricity , gas ... It's a utility , a usefull one , that's all .
The whole argument that one works in Wall Street because it's intellectually challenging , is an insult to people who do real intellectually challenging jobs . It's a job that pays very well , requires basic math skills , and depênding on where you rate on the IQ scale , you may even find it intellectually challenging .Just don't kid yourself .
I don't claim to be any better , I know my rank in the pecking order . I know what difficult is . Here , have a go , Proof P=NP , a grand challenge problem , 1 million $ reward . That's intellectually challenging .
I fully expected a large # of ignorant and hateful responses, but the calibre of some of the ones above is still a bit scary. I hope none of those who left such silly comments live in the U.S, as if so, our country is even more screwed than I thought!
I also don't understand the motivation of those who so clearly know nothing of finance, economics, and business in general to leave ignorant and hateful comments on a finance/economics/business blog.
That would be like me constantly going on a medicine or physics blog and telling doctors, nurses, professors, and physicists that they're vultures responsible for disease and the nuclear bomb and that they don't know what they're talking about and destroy society. It's really quite ridiculous, no?
Would you say that out in the open,out in the real world ?
TheTal Kid -
I feel sorry for people like you...why are you so full of hate ?
why do you blame others for how you live your life ?
what's with this racial hatred thing ?
you really should think before you post shit like that ,
some kids might not realize that you are drunk posting on the net...
I feel sorry for people trapped in a mental cage of political correctness.
He didnt blame anyone for living his life. He SAID KILL YOURSELF JEW!
Fractional reserve banking is the issue - and what makes your livelihood parasitic. And yes, some of us are well informed, and understand finance, and still think banking, on net, extracts far more wealth than it creates. Fractional reserve banking, at its root, means lending out money that you don't have - which makes it inherently bankrupt, and always dependent on the government to force the citizens to subsidize it.
A full reserve banking system would have far, far, far less employees (as a percentage of the economy) and far, far, far lower incomes for the remaining employees. So yes, "Finance" is necessary - fractional reserve banking is not.
Agree with you, Steve. Check my post below.
Dont go calling us ignorant just because you sucked at everything and went into leaching as a business!!!!
I bet you done quite a bit of sucking in your time and
quite a bit of leeching as well,so it seems.
well, most suckers are leeches as well,
and of course it takes a good sucker to be a good leech.
Leeching.
While about 1/2 of your posts here are out of left field, you could at least have the decency to educate yourself and ensure proper spelling and grammar. Hard for a plebeian, sure, but i believe in you.
If you want porpa spelin and grama go to fucgink harvard with the asswipes and overeducted sperm
Im here to FIGHT not use YOUR FORM of propa grama
I spell Perfuctly. You are the douche that fell for 1982 version of spelling in ole england we would say all yer spellin is WRONG and FUCKED.
Propa grama is a moving wave and you are behind it
So does it make us IGNORANT FOOLS if we KNOW that GS and JPM have been market rigging, shorting customers and creating finance products DESIGNED to self destruct but sold as legit Investments. You are an arrogant prick. Its just your attitude toward the common man that made you the enemy.
I can't believe you call yourself " satansanus "
that is so subversive...on a financial website lol;))
I am the lowest of low and I smell awful and I spew fire and sin.
What could be more fitting?
Your comments prove to us you are clearly much, much less than a 'common man'.
PS - lol @ shorting customers
How do you know that? You've cited absolutely zero factual evidence to support a single one of your claims. Please, oh wise one, please explain how things work on Wall Street to all of us academics/professionals/students/etc. Share with us your expertise and let the whole world see the light!
I actually wondered the same exact thing. Why are these people even on this blog when they don't have any grasp on what this blog is about? I have often used that same example. I don't go around arguing with chemists about chemistry, engineers about engineering, etc. because I don't know anything about those areas. Everybody has an opinion on economics though, even when they have no understanding of it.
Anal-loser says gets his ya yas in banking by out smarting others, winning the game, etc - the platform of a large TBTF IB gives you that edge you fukking moron not your smartness or your slef proclaimed financial ability, the only reason you asshole friend works 120 hours a week is because the asshole next to him is working 121 - go suk Paulson ball sack and maybe become partner and really hit it big you fukking pompous jackass - get a clue
Seriously. Nobody needs this kind of arrogant bullshit. And why the hell would he tell people where he works? Stone Street Advisors... "we shit where we eat!"
Some of us are just trying to do what we do. Take some pleasure in being creative and trying to figure things out. Maybe get people to see another point of view. To not be the focus of hatred by some unstable people.
Thanks for taking us all a giant leap back, anal-loser.
If you had given that "Im an Achiever" speech at a locals strip club you wouldve been taken outside and beaten severly. good thing you post from cyberspace where the locals cant break your legs
Was no part of it the allure of Gordon Gekko's massive office with its awesome view?
Was no part of it the allure of the Gekko feeling of power, casually deciding the fates of men and corporations with a flippant comment?
And, I'm an engineer. I never really got the complete absorption with money. Or maybe I sort of did and thought it creates a warped outlook on life and stayed away from it for that reason.
The questions posed in your comment suggest you did not, in fact, read the post in its entirety, as the answers to them are stated quite clearly therein...
I studied some engineering in college (my father was an engineer, among other things) so I have much respect for anyone in such a profession, but let me ask you, do you like winning? Do you thrive on it? If so, how often do you encounter competitive situations in your profession?