Young Money: Inside the Hidden World of Wall Street's Post-Crash Recruits (7 page)

Goldman tried to pare some of its image woes by taking out full-page ads in the
New York Times
and the
Wall Street Journal
, touting its green energy investments and featuring images of hard-hat workers and windmills. But it didn’t help. The public had identified Goldman as the primary driver behind Wall Street’s crisis-era malfeasance, and it wasn’t letting go.

Samson and Jeremy both had opinions on all of these issues—from Goldman’s compensation to its culpability during the financial crisis. But during their after-work hangouts on Jeremy’s roof, they rarely talked about morality, or ethics, or the firm’s image on Main Street. Most days, their conversations hewed closely to the daily struggles of their jobs: their bosses, the trades of the moment, their frustrations with the finance lifestyle.

It wasn’t that there were no moral questions involved in the work they did every day. Unlike banking analysts, who might be six or seven levels of responsibility away from a finished deal, sales and trading analysts were directly responsible for buying and selling products to clients. Mortgage products and energy derivatives, Samson and Jeremy’s respective bailiwicks, were two of the most complex kinds of securities sold on Wall Street, and Goldman’s informational advantages in both areas could be huge. Every time a Goldman salesman got rid of an axe, he was unloading it on a client who may or may not have fully understood the risks it held or how it should be priced. That kind of behavior was at the heart of the SEC’s lawsuit, and the suspicion that it happened all over Wall Street was part of what had taken the general public’s distrust of the financial sector to an all-time high.

Part of what was happening was simple mental compartmentalization. Jeremy and Samson knew that some of what they were doing might have been ethically suspect, and they didn’t like many of their coworkers, but much of the time, they found the actual substance of their work intellectually stimulating, and they generally considered Goldman a good place. Moreover, the clients they spoke with every day—large, sophisticated investors—were used to dealing with Goldman and weren’t surprised by the bank’s cutthroat business model. And so, while they could contemplate their direct, everyday tasks on one hand and the ethics of working at Goldman Sachs on another, the two strains of thought rarely crossed in their minds.

The compartmentalization phenomenon turned out to be bigger than Jeremy and Samson, and bigger even than Goldman Sachs. As I interviewed dozens of young analysts at firms across the financial sector, I heard the same kinds of answers to my questions about morality and ethics:

“I don’t know, I never really think about it.”

“I’m just trying not to fuck up.”

“Dude, I’m so far away from anything like that…”

Entry-level analysts, it seemed, were so routinely exhausted, and so minutely focused on their day-to-day tasks—on pleasing their bosses, nailing every page of their pitch books, and avoiding getting in trouble—that they often avoided thinking about the big picture. It was a sort of cognitive triage, and daily concerns always took priority over long-term, large-scale worries. Still, there was no doubt that these worries existed. (In fact, I often found it much easier to get young analysts to open up about their doubts than senior executives, who had often been in the industry long enough to have built a self-reinforcing moral framework that allowed them to feel no compunction whatsoever about working in finance.)

“There’s kind of an inherent conflict between ethical business practice and fiduciary duty,” Jeremy once told me, in a moment of moral clarity. “As a person working for a public company, your duty is making money for your shareholders, but what if that means doing wrong?”

So, yes, many of the Wall Street analysts I’d met were thoughtful, robust ethical thinkers in their private lives. But professionally, they were foot soldiers. And at times, asking them to switch modes and reflect on their qualms with Wall Street as a whole was like trying to get a congressional page to pontificate about the constitutionality of gerrymandering. All the page was worried about was getting his boss’s lunch order right.

As Wall Street’s young analysts got older, and their jobs slowed down, I hoped to get them to reflect about the larger issues framing their work. I wanted to know if they ever stayed up at night worrying about having screwed a client on a deal, whether they thought their pitch books represented honest and forthright analyses, and whether they were ever tempted to turn down an unscrupulous assignment and risk hurting their careers.

For now, though, I had to accept that they were just trying to keep from drowning.

THE BAND HIT
a crescendo into the chorus, and the congregation swayed and sang along.

All around the church sanctuary, the sounds of praise reverberated off the walls. Most people were shouting and speaking in tongues, while intermittently singing and clapping along with the music. There were several hundred people in attendance, and all of them—men, women, children, little old ladies—were on their feet, making such a ruckus that the people on the street outside paused next to the door and peered in to see what the fuss was about.

And, way up in the front row, there was J. P. Murray, who was hung over as hell.

J. P.—short for Jean-Paul—was a first-year IBD analyst at Credit Suisse, the Swiss firm whose headquarters was a majestic-looking building at 11 Madison Avenue. During the days, he worked long hours on Excel models and pitch books. He spent most of his Friday and Saturday nights getting drunk in clubs and flirting with women, and on Sundays J. P. liked to repent for his sins at church. His congregation was located in a poor, predominantly black Brooklyn neighborhood all the way at the end of the L subway line, where most people didn’t know or care what Credit Suisse was, or what an investment banker did. J. P. found the church’s lack of pretense refreshing, and a service often got him out of his own head after a long week at work. Here, in this sanctuary, he didn’t have to be Jean-Paul Murray, aspiring Master of the Universe, with a docket full of responsibilities and a career on the move. He could just be J. P., the big black kid with the goofy smile.

J. P., who stands six foot seven in his socks, is the son of a Haitian mother who had emigrated to the United States when she was pregnant with him. Her work as an administrative assistant, and some modest side income from his stepfather, gave them a steady lower-middle-class lifestyle in Philadelphia, where they lived. J. P. had worked hard in high school to get himself into Temple University, where he commuted to class from home and paid for his tuition out of pocket, with money he earned from his part-time job as a bank teller.

J. P.’s mother, a devout Christian who had missed church only a handful of times in her life, wanted him to become a preacher. But J. P. wanted more. He’d always dreamed of working on Wall Street, where a person with drive and ambition could become truly wealthy—the kind of wealth that would buy not only nice things for himself but also provide a plentiful future for his children and grandchildren. During his junior year, J. P. applied for and got an internship at Credit Suisse. That had been before the crisis, and J. P. felt lucky that in 2009, after the crash had taken a hammer to Credit Suisse’s profits and a machete to its head count, he’d been able to talk the bank into hiring him back full-time.

He’d gotten placed in health-care investment banking, a group that met the financial needs of pharmaceutical companies, hospitals, and medical equipment makers. He wasn’t in love with the work, but he consoled himself with the fact that he had beaten the odds and made it to Credit Suisse, which recruited from all of the Ivy League schools, and had only a few spots reserved for nontarget graduates like him.

“I’ve come this far, and I’m not going to fuck it up,” he told me.

On his first day, J. P. arrived at Credit Suisse for an orientation program in the firm’s auditorium. He looked around the room and did what he often did upon entering unfamiliar territory—counted black people. Out of roughly two hundred incoming first-years, he found exactly eight.

I am the biggest, blackest dude in this room
, he thought.

Ever since he was only one of a handful of minorities in some of his Temple business classes, J. P. had done his fair share of thinking about how being black would affect his career as an investment banker.

To hear some people on Wall Street tell it, race and ethnicity didn’t matter in finance. As long as you were making money for your firm, the sector’s long-held mythology went, it didn’t matter whether you were white, black, or purple. That, of course, is too easy a gloss, and obscures the obvious fact that today’s financial sector, like the financial sector of old, is still dominated by white men. There are no black or Hispanic CEOs of any major Wall Street firms, and the executive committees of many financial institutions are still porcelain-white.

To their credit, all Wall Street banks acknowledge the problem. Many firms recruit at historically black colleges and universities, and most have affiliations with groups like Sponsors for Educational Opportunity that groom minority students for high-powered corporate jobs. J.P. Morgan has an entire internship program, called “Launching Leaders,” dedicated to finding spots for promising students of color within the bank. There are conferences, workshops, and affinity groups for ethnic minorities at every major firm.

Those programs have helped diversify the entry-level ranks of Wall Street as a whole. A study by CUNY professors Richard Alba and Joseph Pereira found that the percentage of white men among “core” Wall Street workers under age thirty (defined as workers in securities-industry companies who were not janitorial, cafeteria, or other nonbusiness staff) fell from 48.8 percent to 45.8 percent between 2000 and 2009. The percentage of white women thirty and under also fell during the same time period, from 22.7 percent to 18.9 percent.

But gains at the junior ranks don’t necessarily mean that Wall Street is an equal-opportunity industry. A 2010 report by the U.S. Government Accountability Office found that financial services firms still suffered from a major lack of diversity among top managers and executives. As late as 2008, the GAO reported, white males held 64 percent of all senior jobs on Wall Street. Moreover, the diversity hiring efforts at Wall Street firms tend to be narrower than they appear. Most of the progress has been concentrated in a few ethnic minorities—namely, South Asians and East Asians—and students from privileged backgrounds still dominate.

“My bank is a very diverse place, but not in a typical way,” one Morgan Stanley analyst told me. “There’s ethnic diversity, but it’s not very socioeconomically diverse. You’ve got a lot of kids who grew up in some Asian country and went to a prestigious prep school, then an Ivy League university.”

By that metric, J. P. Murray was a double minority at Credit Suisse. He was one of only a handful of new black analysts, and he was one of the only people at the firm who hadn’t had at least a middle-class upbringing.

Since joining the bank, J. P. had become close with the other black analysts in his first-year class, and while all of them seemed to be hitting their strides, he had noticed a certain caution in the way they seemed to approach their jobs. Being a black investment banker, J. P. had learned, required certain code-switching abilities. It required being able to talk about the things his white managers cared about, and have a good sense of humor when it came to the more subtle off-color comments and remarks thrown his way. In many ways, it required being able to tone down his blackness for the purpose of negotiating a power structure that still considered him an outsider.

J. P. had learned a lot from watching Denise, another black first-year analyst at Credit Suisse who seemed extremely savvy about how to maintain her identity while climbing the Wall Street ladder. Once, when J. P. and several other Credit Suisse analysts had clustered around her desk to chat during the middle of the day, Denise waved them away.

“Okay, one of you needs to leave,” she said. “Too many black people.”

Beneath that joke was some truth. Banks
were
largely white enterprises, and too many nonwhite workers cloistering together, even for benign social purposes,
could
seem threatening to white coworkers. J. P. would never have thought about these kinds of subtle, racially tinged social maneuvers before starting his job at Credit Suisse. But now that he had been alerted to their existence, he saw them everywhere.

Foremost in J. P.’s mind, though, was succeeding at his job. He wanted, more than anything, to prove that he could make it on Wall Street, despite the long odds.

“People, in a very cynical way, like to say you’re living the dream when you’re on Wall Street, but I believe it,” he told me. “Look, I’m twenty-two years old, and I’m making more money than both of my parents combined. My earning potential, in a few years, is double, triple, quadruple what they’ll make in their lifetime. There is a power structure, and I believe in my ability to impact it and become part of it.”

That belief had given him a single-minded focus on doing whatever it took to rise through the ranks. Whenever he found himself wallowing in self-pity after a long night of work, J. P. would don his headphones at his desk and listen to a song called “Live Fast, Die Young” by the rappers Rick Ross and Kanye West, which usually helped put things back in perspective.

J. P. was living fast, and even though he was probably shaving off years of his life with his frantic days and sleepless nights, he felt sure it would all be worth it in the end, when he had the money and seniority to pull his family into the upper class, with enough left over to finance his lifestyle.

His life wasn’t perfect, but standing in church, surrounded by people who were giving thanks to God for much lesser miracles, it was hard for J. P. to feel anything other than truly, inexplicably blessed.