My Time at Lehman • Hacker News Board

Re: My Time at Lehman

#141

Post by tomkarlo » Sat, Apr 13, 2013, 12:24 AM UTC

mynewwork wrote: post #132

tomkarlo wrote: post #128

Earlier quoted context omitted.

That's not generally how it seems to work. For junior bankers under 30 (analysts and associates) you're making good money, but not such great money that you're putting away hundreds of thousands of dollars a year after your expenses and taxes. I can't recall ever hearing of someone saying, "I've worked 5 years, I've saved $500K, but instead of making $500K next year, I'm going to retire." Also, the lifestyle (and par…

I absolutely understand that $1M doesn't seem like much while on wall street, as I said in my original comment it's not early retirement / "F You" money. For the purely money-driven clearly they keep working and living the lifestyle. But for the people who do leave, as you did, and the blog author, and presumably the others considering which foul acts are better than going to work each day, I have to think their live…

Yes, but you're forgetting that this is a business where pretty much the only reason you're there and successful is because you're either enormously ego or money driven. Otherwise you just wouldn't last. Lots of people don't last very long regardless.

Someone who will work 100+ hours a week -- despite being able to make $200K at a regular 40 hour a week job -- is not the kind of person who "takes a break" because they have a little cushion in the bank. These are incredibly hard core people who spend every minute of their day figuring out how to be just a little bit more successful than they are right now. Their goals are to make millions per year.

I've worked with people who were worth more than $2B and up and would pretty much cut your heart out with a spoon if it meant an extra $100 in their pocket. As another banker pointed out, that's part of why they're worth $2B, and we're not.

Re: My Time at Lehman

#142

Post by tomkarlo » Sat, Apr 13, 2013, 12:26 AM UTC

rayiner wrote: post #122

pm90 wrote: post #118

Earlier quoted context omitted.

This sounds like a very difficult situation! I didn't realize it was this complicated; I always wondered why pension fund managers were so gullible.

The pension fund managers are stuck between a rock and a hard place. States underfund pensions while state employees keep demanding ever larger retirement benefits. So as a result they have to seek insane returns on their portfolios.

Yup. And eventually it ends in tears, because they fail to hit their ridiculous return targets and the pension ends up massively underfunded. But of course at that point, the politicians are either gone, or just blame the fund for failing to hit targets.

Re: My Time at Lehman

#143

Post by pyoung » Sat, Apr 13, 2013, 12:46 AM UTC

penny500 wrote: post #61

pyoung wrote: post #42

Earlier quoted context omitted.

The reaction to SOX by Wall Street was fairly mixed, some liked it because it meant the could put more trust in corporate financial statements. Some did not support the bill because of the usual straw man argument that 'regulation makes us less competitive'. Regardless, the passage of the bill does not say anything about the lobbying power of Wall Street, because WS was fairly mixed on it to begin with. Regarding Dod…

How is "regulation makes us less competitive" a straw man argument? If your Singaporean or European competitors operate under a set of different and less stringent rules, that wouldn't increase your costs to doing business (and in effect making you less competitive relative to foreign competitors)? Even the regulators know about the costs of Dodd-Frank.

I think Singapore does so well because of the low taxes and because it is one of the few Asian countries in that region that isn't hampered by corruption. Europe's economies are way too diverse to group together, some of them are 'business friendly', some of them are not. The 'Celtic Tiger' was largely due to low taxes, and hasn't turned out too well (most of Europe is hurting right now), so I am not sure why we should aspire to emulate them. Regulatory policies have little to do with their success (but a lot to do with their failures, in the case of Ireland).

I think most people agree that over-regulation is a bad thing. What I take issue with is when political groups and lobbyists scream 'regulation makes us less competitive' anytime regulation is mentioned. The fact is it might increase the costs of doing business a little bit, but it also might mean that my air and water aren't horribly polluted (see Beijing air quality) or that I can count on my retirement account actually being there when I need it. I feel like one side is trying to find a good balance, while the other is being completely obstructionist. The end result is watered down regulatory policies that increase the complexity and costs of doing business, while at the same time, being completely ineffective. One major issue with this result is that this greatly benefits entrenched players, as they are already adept at navigating complex regulatory environments (which keep out new entrants) but in the end, they aren't actually affected by the regulations in any meaningful way.

Re: My Time at Lehman

#144

Post by ramchip » Sat, Apr 13, 2013, 12:52 AM UTC

mynewwork wrote: post #125

tomkarlo wrote: post #91

I worked at Lehman for 4+ years (left in 2008) and while I didn't feel so negative about work (I was more senior than the OP) I definitely was in a spot where I knew that if I kept at it for another 10-20 years -- no matter how much money I made -- I would feel like I wasted my time. I went back to tech, and now I have a job where I'm still well paid by any reasonable standard, and I really enjoy what I work on and w…

I'm always curious when I hear things like "Lehman for 4+ years" because, based on the numbers thrown around on HN and blogs like this, it seems likely you could have a net worth over a million dollars. While not the "F You" money many here dream of, it still seems like a few years on wall street would give you a nest egg that would make it easy to live comfortably on any other salary (whether that's tech or teaching…

Usually you don't get a really high salary until you've worked a few years in the field. That's the trap, you think "I'll work there a few years and save up", but then after a few years you get to the point where your salary is really going up and it's hard to leave when you start making real money...

Re: My Time at Lehman

#145

Post by sopooneo » Sat, Apr 13, 2013, 12:55 AM UTC

rayiner wrote: post #9

"Which, it turns out, is a trader’s field day. What this meant, in its simplest form, is that these traders (or salespeople) could buy bonds at the "market" price from intelligent hedge fund managers in NYC and sell this same crap at much higher levels to unsophisticated (but legally considered "sophisticated") pension funds and insurance companies in middle America. What I discovered, quite starkly, is that the part…

I don't believe the Ivey league recruiting has as much to do with intelligence as it does marketable pedigree. There are much more effective filters if you want to select for intelligence and drive.

Re: My Time at Lehman

#146

Post by sopooneo » Sat, Apr 13, 2013, 12:59 AM UTC

ig1 wrote: post #37

crazygringo wrote: post #24

Earlier quoted context omitted.

> simply transferring wealth from the less sophisticated investors often teachers’ pension funds and factory workers’ retirement accounts, to the more sophisticated investors... Exactly. Wall street and investment have wonderful effects -- funneling money towards companies that can use it in amazingly productive ways. It provides an incredibly valuable service. But the flip side is exactly this, that pension funds, o…

Because people are different, if you're 20 year-old healthy female you'll have a completely different risk profile from a 64 year-old male with health problems. If you work in the government you might want to avoid your pension being in your own government bonds because you don't want all your eggs in one basket. If you're an immigrant who plans to retire back to your home country you might want to limit you exposure…

People may be different, but within a given pension system, the various accounts are usually not.

Re: My Time at Lehman

#147

Post by mathattack » Sat, Apr 13, 2013, 1:01 AM UTC

rayiner wrote: post #9

"Which, it turns out, is a trader’s field day. What this meant, in its simplest form, is that these traders (or salespeople) could buy bonds at the "market" price from intelligent hedge fund managers in NYC and sell this same crap at much higher levels to unsophisticated (but legally considered "sophisticated") pension funds and insurance companies in middle America. What I discovered, quite starkly, is that the part…

Given this, it's a wonder that people try to beat the market and invest in products they don't understand. Index funds are government bonds are much better for the so called "dumb money."

Re: My Time at Lehman

#148

Post by tomkarlo » Sat, Apr 13, 2013, 1:16 AM UTC

ramchip wrote: post #144

mynewwork wrote: post #125

Earlier quoted context omitted.

I'm always curious when I hear things like "Lehman for 4+ years" because, based on the numbers thrown around on HN and blogs like this, it seems likely you could have a net worth over a million dollars. While not the "F You" money many here dream of, it still seems like a few years on wall street would give you a nest egg that would make it easy to live comfortably on any other salary (whether that's tech or teaching…

Usually you don't get a really high salary until you've worked a few years in the field. That's the trap, you think "I'll work there a few years and save up", but then after a few years you get to the point where your salary is really going up and it's hard to leave when you start making real money...

Yeah... I was going to add this. When you're making X, but you can see making 2X in a year or two, you're very reluctant to let it go. It's just human nature (and you also don't tend to consider the outcomes where you don't make 2X, or the opportunity cost.)

Re: My Time at Lehman

#149

Post by MichaelMoser70 » Sat, Apr 13, 2013, 2:04 AM UTC

crazygringo wrote: post #24

rayiner wrote: post #9

"Which, it turns out, is a trader’s field day. What this meant, in its simplest form, is that these traders (or salespeople) could buy bonds at the "market" price from intelligent hedge fund managers in NYC and sell this same crap at much higher levels to unsophisticated (but legally considered "sophisticated") pension funds and insurance companies in middle America. What I discovered, quite starkly, is that the part…

> simply transferring wealth from the less sophisticated investors often teachers’ pension funds and factory workers’ retirement accounts, to the more sophisticated investors... Exactly. Wall street and investment have wonderful effects -- funneling money towards companies that can use it in amazingly productive ways. It provides an incredibly valuable service. But the flip side is exactly this, that pension funds, o…

>Why should retirement accounts get invested in anything but government bonds and index funds?

Here (somewhere near the end) Mr. Blank says that this is what got the silicon valley rolling. When pension funds were allowed to invest, control of the valley switched from the military to the VC funds http://www.youtube.com/watch?v=ZTC_RxWN_xo

Probably another reason is that bonds and index funds do not yield enough to keep the pension funds going; people now live a longer life on average, so they need to pay more on each pension; so its all screwed up.

Everything is screwed up; now that probably that has something to do with the fact that energy prices & commodities are high; there is less energy to go round, so other creative means are found to create 'wealth'; these tricks increasingly have something to do with extracting something from pocket A and transferring it to pocket B.

Re: My Time at Lehman

#150

Post by rayiner » Sat, Apr 13, 2013, 2:21 AM UTC

sopooneo wrote: post #145

rayiner wrote: post #9

"Which, it turns out, is a trader’s field day. What this meant, in its simplest form, is that these traders (or salespeople) could buy bonds at the "market" price from intelligent hedge fund managers in NYC and sell this same crap at much higher levels to unsophisticated (but legally considered "sophisticated") pension funds and insurance companies in middle America. What I discovered, quite starkly, is that the part…

I don't believe the Ivey league recruiting has as much to do with intelligence as it does marketable pedigree. There are much more effective filters if you want to select for intelligence and drive.

It's a good first cut. The real filter is the analyst phase after which only the promising people are offered to stay on.