Young Money: Inside the Hidden World of Wall Street's Post-Crash Recruits (24 page)

105.
“I decided to go to Fashion Meets Finance”:
Kevin Roose, “Fashion Meets Finance, After the Crisis,”
New York Times
(DealBook), May 6, 2011.

105.
“Women in fashion need men who can facilitate their pre-30 marriage/retirement plan”:
Brian Niemietz, “Dough Job,”
New York Post
, June 10, 2008.

106.
“But in 2009, it returned with a vengeance”:
Amy Odell, “Thank God for Goldman Profits—Fashion Meets Finance Is BACK,”
New York
(The Cut), July 29, 2009.

110.
“who are often taught to succeed by emulating the people above them on the food chain”:
See Ho’s
Liquidated
, p. 52.

113.
“The number of huge companies doing big, billion-dollar deals fell in the wake of the financial crisis”:
Antonio Capaldo, David Cogman, and Hannu Suonio, “What’s Different About M&A in This Downturn,” McKinsey Insights & Publications, January 2009.

113.
“and hadn’t yet recovered”:
Helen Thomas and Anousha Sakoui, “M&A Volumes for 2011 Set to Disappoint,”
Financial Times
, September 29, 2011.

114.
“some of the analysts in Ricardo’s group had procured alertness pills like Adderall and Modafinil”:
For more on the recreational use of Modafinil by Wall Street workers, see Robert Kolker’s
New York
article, “The Real
Limitless
Drug Isn’t Just for Lifehackers Anymore” (March 31, 2013).

121.
“had even taken the liberty of reserving the domain name wallstdropday.com, just in case it ever came to fruition”:
It didn’t.

122.
“Jeremy went back to his usual spot on the roof of his apartment building, lit up a joint, and broke down”:
A note on drug use: I’m often asked if young bankers on Wall Street abuse drugs. I can’t say for certain, but in my experience, the drug intake for many first- and second-year analysts is limited to heavy drinking, performance-enhancers at work (Adderall, Modafinil, and over-the-counter caffeine pills), and an occasional pot-smoking session on the weekends or at night after work. The financial sector’s cocaine use, which was notorious before the financial crisis, seems to be much less prevalent now, or at least is confined to older bankers and traders, who have more free time to go wild anyway.

135.
“A European debt crisis had been raging”:
For more on the Euro zone crisis, see “Timeline: The Unfolding Eurozone Crisis,” BBC News, June 13, 2012.

136.
“Banks were still taking on huge, leveraged positions in opaque and little-regulated markets”:
Dominic Elliott, “Basel Leverage Rules to Put Pressure on Wall Street,” Reuters Breakingviews, June 26, 2013.

136.
“The junk bond market…was having its strongest year since the crisis”:
Matt Wirz and Shira Ovide, “Welcome to the Biggest Junk Bond Sale Since the Financial Crisis,”
Wall Street Journal
(Deal Journal), July 26, 2011.

136.
“that work lived on under the guise of ‘market-making’ trading desks”:
Frank Partnoy and Jesse Eisinger, “What’s Inside America’s Banks?,” the
Atlantic
, January 2013.

137.
“traders who had worked in the back and middle offices tended to have deep knowledge of their firm’s technical systems, and could exploit them if given the chance to trade on their own”:
John Gapper,
How to Be a Rogue Trader
, Portfolio, 2011.

141.
“The classic private equity deal was a leveraged buyout”:
In the prologue to
Barbarians at the Gate
, Burrough and Helyar describe the leveraged buyout this way: “In an LBO, a small group of senior executives, usually working with a Wall Street partner, proposes to buy its company from public shareholders, using massive amounts of borrowed money. Critics of this procedure called it stealing the company from its owners and fretted that the growing mountain of corporate debt was hindering America’s ability to compete abroad. Everyone knew LBOs meant deep cuts in research and every other imaginable budget, all sacrificed to pay off debt. Proponents insisted that companies forced to meet steep debt payments grew lean and mean. On one thing they all agreed: The executives who launched LBOs got filthy rich.” A kinder description of the private equity business model (“collect money, pair it with debt, and buy a company with the intent of selling it down the line for a profit”) can be found in Jason Kelly’s
The New Tycoons
(John Wiley & Sons, 2012).

145.
“the annual earthquake known in the corporatized language of HR as the ‘compensation communication period’”:
Kevin Roose and Susanne Craig, “It’s Goldman Bonus Day,”
New York Times
(DealBook), January 19, 2012.

146.
“bonus season amounts to a combination of Christmas and Judgment Day”:
Every year, banks try to stall their analyst bonus days until after other banks have gone and set their levels accordingly, avoiding paying Banker A $40,000 while Banker B across the street at UBS gets $45,000 a week later. Nobody wants to overpay or underpay. The whole thing has a whiff of price-fixing to it, and would be funny if all involved didn’t take it so utterly seriously.

146.
“Analysts who land in the top bucket are often assured of a third-year offer”:
When bonus numbers emerge, they are invariably leaked to Dealbreaker, the finance blog, where they’re posted anonymously for other analysts to kvetch over. One 2010 posting about bonuses at J.P. Morgan that no doubt inspired jealousy all over Wall Street read: “first year IB analyst top bucket $65K, second bucket $60K (first year base is $70K). JPM told analysts they ‘want to pay at the top of the market.’ People are generally happy with the numbers.” (Bess Levin, “Bonus Watch: JPMorgan,” July 30, 2010.)

155.
“tacked posters of Warren Buffett and George Soros on their walls”:
I don’t know if such posters actually exist, but they should.

156.
“Black Diamond is Harvard’s most exclusive student-run hedge fund”:
Mercer R. Cook, “Exclusive Investment Club Asks Student Members for $1,000,”
Harvard Crimson
, September 14, 2012 (note: Black Diamond has changed its membership and investment rules since the
Crimson
’s report).

159.
“But here, you have guys with commonality; everyone is going into finance, everyone has a background in finance, everyone is interested in making profits”:
After my visit to Harvard, Patrick sent me a list of the firms where Black Diamond’s alumni have worked. It’s a who’s who of global finance, and includes Bridgewater Associates, the Blackstone Group, D. E. Shaw, Bain Capital, the European Central Bank, the Federal Reserve, and every big investment bank you can think of.

164.
“Goldman, like many Wall Street firms, gets relatively sleepy in the summer”:
Patti Domm, “Sleepy Summer Markets Could Give Way to Rougher Fall,” CNBC.com, August 16, 2012.

165.
“Jeremy had gone in with more than a dozen other first- and second-year Goldman analysts on a house share in Westhampton”:
For an exploration of the annual phenomenon of Hamptons house shares, nothing beats Vanessa Grigoriadis’s 1999
New York
story “Welcome to the Fun House,” in which she describes the summer antics at a Bridgehampton house where twenty-odd summer roommates, many from Wall Street, spent their days “reading
Forbes
, gabbing on cell phones, and slathering Coppertone Sport on well-maintained bodies.”

172.
“The slow municipal bond markets”:
Lisa Lambert, “US Municipal Market Shrinks for Two Straight Qtrs.,” Reuters, September 16, 2011.

173.
“Well, the idea might at least be floated.”:
This is a joke.

178.
“Facebook was preparing to go public the following year”:
Shira Ovide, “What We Know About the Facebook IPO,”
Wall Street Journal
(Deal Journal), June 13, 2011.

178.
“Apple had become the biggest consumer-facing company in the world”:
Dominic Rushe, “Apple Pips Exxon as World’s Biggest Company,”
The Guardian
, August 9, 2011.

178.
“A 2011 survey conducted by the consulting firm Universum”:
Cited by Rachel Emma Silverman, “Young Workers Like Facebook, Apple and Google,”
Wall Street Journal
, November 13, 2011.

179.
“Between 2007 and 2012, the number of jobs in New York City’s tech industry”:
Jonathan Bowles and David Giles, “New Tech City,” report by the Center for an Urban Future, May 2012.

180.
“And among MBA programs, Harvard is a financier’s paradise”:
For more about Harvard Business School, I recommend Philip Delves Broughton’s
Ahead of the Curve
(Penguin, 2008), a memoir about his two years at HBS. Broughton describes how deeply intertwined HBS and the financial sector had been, writing: “It felt as though the consulting firms and the Wall Street banks had buried encampments on campus from which they deployed their fresh-faced recruiters. They made unsolicited calls to our homes offering to describe their work. It was like being badgered by the Church of Scientology” (p. 135).

181.
“He oversaw the growth of a voluntary pledge called the ‘MBA Oath’”:
Max Anderson, “Why We Created the MBA Oath,” Harvard Business Review Blog Network, June 8, 2009.

181.
“Dean Nohria’s efforts to unhook HBS from the financial sector were visible in admissions, too”:
Statistics on the pre-MBA careers of HBS students were provided by HBS.

185.
“It had made the national news the day before”:
Colin Moynihan, “80 Arrested as Financial District Protest Moves North,”
New York Times
, September 24, 2011.

186.
“international cities as far-flung as Sydney, Tokyo, and Davos”:
A big list of Occupy protests can be found here: “Occupy Protests around the World: Full List Visualized,”
The Guardian
, November 14, 2011.

187.
“The exceptions were people like Vikram Pandit”:
Donal Griffin, “Pandit Says He’d Be Happy to Talk with Wall Street Protesters,” Bloomberg News, October 12, 2011.

187.
“Later, JPMorgan Chase CEO Jamie Dimon would say”:
Polya Lesova, “Dimon: Occupy Wall Street Has ‘Legitimate Complaints,’” MarketWatch, May 3, 2012.

189.
“The cutoff for the top 1 percent of American tax filers in 2010 was about $370,000 in adjusted gross income”:
Adrian Dungan and Michael Parisi, “Individual Income Tax Rates and Shares, 2010,” Internal Revenue Service.

192.
“Roughly 20 percent of the Yale graduating class typically goes into business and finance”:
Beverly Waters, “Yale College Class of 2010: A Study of Activities One Year After Graduation,” Office of Institutional Research, Yale University, June 2011.

192.
“among Yale alumni in the industry are such heavyweights as Steve Schwarzman”:
Other Yale graduates in finance include short-seller James Chanos and Robert Greenhill, the founder of Greenhill and Co., a New York investment bank.

192.
“folded the results into an essay for Yale’s weekly news magazine”:
Marina Keegan, “Even Artichokes Have Doubts,”
Yale Daily News Weekend
, September 30, 2011.

193.
“I wrote to her and asked her if she could adapt it into a short article for DealBook”:
Marina Keegan, “Another View: The Science and Strategy of College Recruiting,”
New York Times
(DealBook), November 9, 2011.

194.
“students at many other top-flight colleges had begun raising questions about the dominance of financial recruiting on their campuses”:
Kevin Roose, “An Orange and Black Eye for 2 Banks,”
New York Times
(DealBook), December 9, 2011. For full dramatic effect, I recommend the videos of students at Princeton interrupting recruiting sessions by J.P. Morgan and Goldman Sachs, which are available on YouTube. (Search “JP Morgan-Chase Mic-Checked at Princeton University” and “Goldman Sachs Anti-Recruitment Session at Princeton University.”)

195.
“students at Harvard and other schools protested the recruiting efforts of Dow Chemical”:
“Students Will Protest Dow Chemical Today,”
Harvard Crimson
, October 25, 1967.

196.
“In the early 1970s, Stanford University banned Goldman Sachs from recruiting on campus for five years”:
William D. Cohan,
Money and Power: How Goldman Sachs Came to Rule the World
, Doubleday, 2011.

196.
“And after the Iraq War in 2003, students at many top-tier schools protested Lockheed Martin, Halliburton, and other military and weapons companies”:
Nicole Dungca, “SDS Protests CIA, Raytheon Recruiters,”
Brown Daily Herald
, September 24, 2008; Peter Schworm, “Students Switching Activism to Boardroom,”
Boston Globe
, August 13, 2007.

196.
“At Harvard, a young alumnus named David Weinfeld wrote an op-ed”:
David A. Weinfeld, “Boycott Wall Street,”
Harvard Crimson
, October 11, 2011.

197.
“At Stanford, two student columnists called for the school”:
“Op-Ed: Stop the Wall Street Recruitment,”
Stanford Daily
, October 11, 2011.

197.
“at Duke, another finance feeder school, a majority opinion of the student editorial board added its voice”:
“Pass the Buck,”
Duke Chronicle
, December 1, 2011.

197.
“Morgan Stanley CEO James Gorman emphatically denied that the financial industry’s massive unpopularity made an impression on incoming recruits”:
Michael J. Moore, “Morgan Stanley Said to End Ban on Junior Banker Job Hunts,” Bloomberg News, April 16, 2013.

198.
“At Harvard, the percentage of seniors with jobs at graduation who went directly into financial services fell from 28 percent in the class of 2008 to 17 percent in the class of 2011. At Princeton, where 46 percent of seniors with jobs at graduation were once Wall Street–bound, that number shrunk to 35.9 percent in 2010”:
Again, these numbers reflect only students who had jobs as of graduation.

198.
“But the moral and reputational fallout of the crisis had also had an impact”:
Kevin Roose, “At Top Colleges, Anti-Wall St. Fervor Complicates Recruiting,”
New York Times
, November 28, 2011.