Young Money: Inside the Hidden World of Wall Street's Post-Crash Recruits (21 page)

SAMSON STIRRED AWAKE.
He grabbed in the dark for his iPhone, silenced his alarm, and looked up at the clock on the wall. It read:

0 DAYS, 0 HOURS, 0 MINUTES, 0 SECONDS.

This was it. After nearly a year of staring at that clock every morning—a clock that had come to symbolize every remaining bit of hope in his life—it was finally time to quit his job in the mortgage department at Goldman Sachs. That night, for the first time in nearly two years, he would go to sleep a happy, unencumbered man.

Samson had decided to quit after talking with Jeremy and several other friends. He was jealous of Jeremy’s newfound freedom and the pep that had seemed to return to his step after he’d left Goldman. And shortly before Christmas, he had approached his friend Colin, who was about to quit the firm to work on his mobile ticketing start-up idea.
I’m in
, he said.
Let’s do this.
He told Colin he would quit, and join him, on the day his second-year bonus cleared his bank account.

Samson hadn’t known, for months, whether he would actually have the nerve to quit his job when the clock struck zero. He’d hemmed and hawed, at moments feeling quite sure that he would quit, and at others feeling like a third year (and bonus) would be worth another 365 days of unhappiness. But he decided, ultimately, that he liked the idea of being self-employed. He’d hated every minute of his Goldman experience that involved taking directions, and he couldn’t bear the thought of spending any more of his career working for people whose intelligence he didn’t respect. The start-up would be different. Now, he and Colin would be calling their own shots, lining up their own funding, reaping their own rewards.

Still, he was nervous. That winter, while he was deciding whether or not to follow Colin to his start-up, he wrote in his journal:

After deciding to quit, Samson had begun making preparations. The day before, he’d cleaned out his Goldman gym locker, removed some of his personal belongings from his desk, and taken a final walk around the building. And on the day itself, he woke up an hour early, showered, got dressed, and grabbed his bag for the walk to 200 West Street.

As he walked toward the Goldman building for the last time, it began to rain. Samson took out his earphones, plugged them into his phone, and played one of his favorite songs: “The Storm Is Over Now,” by R. Kelly. As the ballad’s familiar refrain started up (
“The storm is over / And I can see the sunshine / I can feel Heaven, yeah / Come on and set me free”
) Samson started to cry—first softly, then in a visceral outburst that came from the depths of his abdomen, the kind he hadn’t experienced since his childhood. His shoulders heaved, and he sobbed as the raindrops slid down his face, not caring if passersby heard or what they might think had happened to him.

Samson got to work at 6:45, dried his eyes, and sent his managing director an e-mail: “Need to speak with you whenever you get in.” The MD arrived two hours later, and called Samson into a room off the trading floor.

“Hey, I’m going to get right to the point,” Samson said. “I’m leaving the firm.”

Samson told the MD that he was going to work at a tech start-up, one he was starting with a fellow Goldman drop-out. The MD said little as Samson spoke, nodding and asking him logistical questions, like when his last day would be.

Samson agreed to stay through the end of the week, handing off a few projects, and helping the other analyst in his group pick up some of his live deals. And on Friday, after a mostly idle week spent saying good-bye to his friends at the firm, Samson left 200 West Street. He wrote a good-bye e-mail to his colleagues, then logged on to Twitter and sent a good-bye tweet to nobody in particular:

That night around midnight, I went to a swanky downtown dance club, where Samson was throwing a good-bye party for himself. I found him in the back of the club, bottle of champagne in hand while he danced to Katy Perry’s “Firework” in the center of a circle formed by his friends. He was very, very drunk, but there was something else in his eyes.

“He’s so happy!” one of his friends told me. “I’ve never seen him like this.”

“That’s what quitting Goldman does,” said Jeremy, who had come to celebrate his best friend’s departure from the firm, three months after his own.

A week after the party, Samson took out his notebook one more time. He wrote:

ON A SUNNY
fall Friday in 2012, hundreds of students flocked to the Dillon Gym for the Princeton Career Fair, an annual event that is attended by tech giants, Fortune 500 companies, and large nonprofit organizations. I walked past orange-shirted career services workers, past booths sets up by investment banks and consulting firms that came bearing slick banner displays and free golf balls, and into a phalanx of job-seeking students.

I went to Princeton in order to finish my young Wall Street investigation the way I began it—on the campus of a top-flight university that sends a plurality of its graduates into the financial sector every year. I was curious about how the events of the past two and a half years had changed the way students at target schools saw the financial industry, and whether the same frantic desire to secure banking jobs still existed among them.

In
Liar’s Poker
, Michael Lewis wrote that when Wall Street banks began recruiting at Princeton each year in the 1980s, the campus career center “resembled a ticket booth at a Michael Jackson concert, with lines of motley students staging all-night vigils to get ahead.” But at this year’s career fair, many of the most prestigious banks were no-shows. There was no Goldman Sachs booth, no eager recruiters from Morgan Stanley or J.P. Morgan handing out key chains and Frisbees. The biggest names from Wall Street were Credit Suisse, Barclays Capital, the hedge fund Bridgewater Associates, and a number of midsized hedge funds and private equity firms. Trumping them all was the Anheuser-Busch booth near the back of the gym, where Princeton alumni in red track jackets were giving out free, Budweiser-branded sunglasses under a sign that read: “Increase your liquid assets!”

The financial firms in attendance were using largely the same vague pitches I’d heard years earlier at Wharton. One bank advertised its “global transaction advisory for the new economy.” Another offered students a chance to “bring your career into focus.” Jane Street Capital, a medium-sized hedge fund, had a banner promising its recruits a “dynamic, challenging environment. Rapid advancement. Idea-driven meritocracy. Informal fun and open atmosphere.” (Oh, and last on the list: “Generous compensation.”) I walked around the gym for an hour, listening to recruiters attempting to reel in students with time-tested come-ons:

“I love my job, and I love what I do.”

“Just because you don’t have a finance background doesn’t mean you won’t like the job.”

“It’s a total rush. Wouldn’t lie to you, dude. And even if it’s not for you long-term, it’s just two years.”

But most students didn’t seem to be jumping at the bait. Several of the ones I spoke to told me they weren’t interested in finance at all. A Princeton senior named Maxwell told me that he had once considered working at a bank, but had instead decided to pursue his dream of working in the sports industry.

“Look, I could work myself to the bone and make a lot of money in finance,” he said, “but I’ve known people who did that, and it’s not rewarding. In finance, you’re just playing around with numbers. I feel like, for me, it wouldn’t really be accomplishing anything besides making money. I would get bored.”

Other Princeton students I talked to said that while they were interested in finance, they didn’t want to work at just any big bank.

“I’m personally looking for a place that can promote economic development and growth in whatever industry it’s working in,” a junior named Shawn said. “I mean, everyone wants to make money. But when I’m working in the place, I want to know that I’m doing some good.”

I talked to dozens of Princeton students that day and found, to my surprise, that hardly any of them were gung-ho about becoming financiers. Many were applying for programs like Teach for America or AmeriCorps, and a significant number planned to go work for tech companies. I met aspiring accountants, management consultants, and graphic designers. And although I did meet a cadre of students who were planning to do two-year stints at a bank after graduation, they sounded apologetic about it. Many of them swore that they would leave Wall Street after their two years were up to do something “good” or “useful” or, barring that, “more fun.”

As I made my way back to the Princeton Junction train station that day, I found myself trying to envision what Wall Street will look like ten years from now, when students like these have had a chance to settle into their careers and the finance industry has fully absorbed the shocks of the 2008 crisis. And I came up with three predictions.

The first and easiest prediction is that Ivy League schools will never again send massive hordes of their graduates to Wall Street, as they did before the crisis of 2008. For one thing, in a financial sector that has been made permanently smaller and less profitable by new regulations, there will never again be room on Wall Street for vast numbers of
any
prestigious school’s students. But there will also be more competition during recruiting. Already, nonprofit organizations like Teach for America and companies like Google are cutting deeply into the territory that used to be dominated by Wall Street. One out of every six Ivy League seniors now applies to Teach for America, and in 2011, the program recruited more seniors than Goldman Sachs at schools like Brown and Columbia. These organizations have figured out that they don’t have to offer six-figure paychecks to entice students to join their ranks. They just have to recruit early in the school year, equip students with specific on-the-job skills, surround them with other smart young people, and give them prestigious and meaningful roles that will look good on their résumés and not limit their options in the future.

Prediction two is that the Wall Street recruiting process will never again attract the same assortment of college students it once did. The hardcore finance majors, Black Diamond hedge fund members, and Wharton graduates of the world will still beat a path to Wall Street’s doors, but there will be many fewer dilettantes—political science majors, say, who wind up on Wall Street because it’s the most popular thing to do at their school. Those students will either have considered the ethical implications of working on Wall Street and decided against it, or they’ll apply anyway and be beaten out for prime spots by students from less prestigious schools who already have years of finance experience and technical know-how—in other words, students who actually
want
to be bankers.

The third prediction involves Wall Street firms themselves. In the coming years, most banks will eliminate their “two and out” analyst programs and revert to hiring analysts like they used to—as career-track workers who are given indefinite, at-will jobs. Partly, banks will make this switch in order to preserve their labor advantage. (It does them no good, after all, to lose their best second-year analysts to private equity firms and hedge funds every year.) But they will also recognize that in an era of tighter budgets and greater competition, they can’t afford to fill their ranks with analysts who are simply notching a line on their résumés en route to their true passions. They will realize that hiring intelligent, committed A students from nontarget schools does them more good in the long run than hiring B students from Yale who will bolt at the first sign of trouble or disillusionment.

There will still be Ivy League recruits on Wall Street, of course. And those recruits will enter a gauntlet that is largely the same as it ever was. They’ll work hundred-hour weeks, alienate their significant others, and get Seamless Bellies from too many in-office meals. The next generation of young financiers won’t necessarily be more moral, or more scrupulous in their dealings, than the ones who currently work on Wall Street. There will still be fraudsters, insider traders, and creators of financial products that explode at regular intervals, to the detriment of taxpayers and the economy at large. Barring more and better regulation, nothing about the financial industry will be improved, systemically speaking, from its current state.

But college students will no longer coast onto Wall Street’s shores uncritically, and investment banks will stop serving as two-year halfway houses for aimless Ivy League graduates. That will be a healthy change, if you ask me. Because one of the main lessons I’ve taken away from my finance immersion is that the financial sector is not a neutral pass-through, and people who work there—even for just two years—are often transformed in lasting ways.

Over the past three years, I’d seen surprising changes in all eight of the young financiers I shadowed. A few of those changes were positive—they’d developed professional personas, gotten more mature, and learned skills that were necessary for running and analyzing businesses. But other changes were more worrisome. I’d seen most of them become less happy and optimistic, more cynical and calculating. They were slower to smile and quicker to criticize. Many of them began to talk about the world in a transactional, economized way. Their universes started to look like giant balance sheets, their appetite for adventure waned, and they viewed unfamiliar situations through the cautious lens of cost/benefit analysis. Sure, some of them had decamped to tech firms, but they had all stayed in industries that were highly paid and traditionally prestigious, and none of them had gotten out of the private sector entirely. Many of them, I suspected, would never be able to make art, volunteer for nonprofits, or give their time to nonwork hobbies without keeping a running P&L in their head.

There is, in other words, an enormous cost associated with our nation’s long-standing practice of sending huge numbers of our most promising college graduates into finance. These financiers form an elite class that will go on to become influential in the top ranks of government, technology, and culture. And if they all share the experience of having spent their formative years working as entry-level bank analysts, performing and internalizing the ethos of the financial sector, it means that, in a way, we’ve allowed Wall Street’s culture to enter our national bloodstream.

It’s the consequences of that cultural contagion—and the genuine misery I saw Wall Street inflict on so many young people—that makes me glad that the financial sector is smaller and less dominant now than it was before the crisis. Wall Street is just one part of a much larger economy, and it should have no monopoly on brilliance. Every company in every industry could benefit from having a few more superbly talented young people knocking on the door looking for work, and I suspect that many of them will, now that finance has been knocked from its pedestal.

Make no mistake: financial firms will never have a problem filling their ranks with smart, capable twenty-two-year-olds. Among the young and ambitious, Wall Street is still a draw. But at the margin, for the first time in decades, the big banks are beginning to lose their grip. And that’s good for us all.