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My Time at Lehman

nickchirls.com

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Re: My Time at Lehman

#11

Post by pekk »

danielna wrote: post #5

I have a strange sense of sadness for my friends who are "stuck" on Wall Street. Strange because it's weird to feel sad for someone making $250k+ per year, but I've heard their first hand accounts of how much they hate their jobs. If you're the type of person who can step back from the ego-driven culture of investment banking I feel like everyone reaches the same meta-conclusions that Nick did. It's just unbelievably…

Step back from the ego-driven culture of investment banking, into the ego-driven culture of startups. Hmm...

Re: My Time at Lehman

#12

Post by ig1 »

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…

This.

"Caveat emptor" applies heavily in b2b transactions be they financial or otherwise. If you're buying a product then you need to spend money to hire sophisticated buyers, because if your buyers are dumber than the sales-people you're buying from they're going to be fleeced.

This is true if your buying a financial asset, a car or an enterprise software licence.

Just because Oracle sells into companies that could just as well have used postgres that doesn't mean that Oracle aren't producing anything of value, it just means they're taking advantage of the buyer being less sophisticated than they are.

Re: My Time at Lehman

#13

Post by cadlin »

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 think American public policy has a hard time grappling with Wall Street because the financial sector has disproportionate lobbying power.

Also, I don't think most Americans care about how free from regulation the financial sector is. Most people have a feeling that Wall Street is screwing over everybody and there's nothing they can do about it.

I'm not exactly sure who you mean by "we," either. Hacker News commenters?

Re: My Time at Lehman

#14

Post by edw519 »

ig1 wrote: post #12
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…

This. "Caveat emptor" applies heavily in b2b transactions be they financial or otherwise. If you're buying a product then you need to spend money to hire sophisticated buyers, because if your buyers are dumber than the sales-people you're buying from they're going to be fleeced. This is true if your buying a financial asset, a car or an enterprise software licence. Just because Oracle sells into companies that could…

Just because Oracle sells into companies that could just as well have used postgres that doesn't mean that Oracle aren't producing anything of value,..

Oracle doesn't sell software. They sell risk reduction. Someone to sue or blame.

Once you understand that, you see how brilliantly they've achieved product/market fit in a way many people here can only dream of.

Re: My Time at Lehman

#15

Post by jdross »

Not to be too self-promotional, but this is literally the problem we're solving at Addepar.

15 years ago the power shifted from banks to hedge funds, and then in 2008 it started shifting to investors. But they still don't have the tools to understand what's going on.

If you're interested in solving problems like this in an engineering-led company, please email me. I'd love to talk.

Re: My Time at Lehman

#16

Post by jwb119 »

cadlin wrote: post #13
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 think American public policy has a hard time grappling with Wall Street because the financial sector has disproportionate lobbying power. Also, I don't think most Americans care about how free from regulation the financial sector is. Most people have a feeling that Wall Street is screwing over everybody and there's nothing they can do about it. I'm not exactly sure who you mean by "we," either. Hacker News commente…

> the financial sector has disproportionate lobbying power.

I'm not sure that's true. If Wall Street really had some super lobbying power Dodd-Frank and Sarbanes-Oxley wouldn't have passed in their current forms. Regulating Wall Street is a pretty easy position to take if you're a politician.

Re: My Time at Lehman

#17

Post by ig1 »

edw519 wrote: post #14
ig1 wrote: post #12

Earlier quoted context omitted.

This. "Caveat emptor" applies heavily in b2b transactions be they financial or otherwise. If you're buying a product then you need to spend money to hire sophisticated buyers, because if your buyers are dumber than the sales-people you're buying from they're going to be fleeced. This is true if your buying a financial asset, a car or an enterprise software licence. Just because Oracle sells into companies that could…

Just because Oracle sells into companies that could just as well have used postgres that doesn't mean that Oracle aren't producing anything of value,.. Oracle doesn't sell software. They sell risk reduction. Someone to sue or blame. Once you understand that, you see how brilliantly they've achieved product/market fit in a way many people here can only dream of.

Sure some people buy Oracle for risk reduction after having done a sophisticated analysis, but plenty of people buy it because that's what the nice sales person tells them they need and the sales person obviously understand this techy stuff far more than they do.

The dev team says they can just use this "postgres" but the sales person said he'd seen this situation a lot of times before and that dev team was too inexperienced with "serious software" to know they needed to use a proper database rather than a toy one that people use when learning because it's free.

(not to pick on Oracle for any particular reason; this is common in enterprise sales at all levels)

Re: My Time at Lehman

#18

Post by orangethirty »

jdross wrote: post #15

Not to be too self-promotional, but this is literally the problem we're solving at Addepar. 15 years ago the power shifted from banks to hedge funds, and then in 2008 it started shifting to investors. But they still don't have the tools to understand what's going on. If you're interested in solving problems like this in an engineering-led company, please email me. I'd love to talk.

What are your plans to deal with this?

Re: My Time at Lehman

#19

Post by samstave »

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…

>"We like the idea of letting everyone transact freely, but we are uncomfortable with the "winner take all" implication of that policy."

I don't agree with this fully. Your statement implies that "Freely" means "with complete abandon to any sort of soundly regulated and protected system designed to prevent fraud, corruption, exploitation... " -- Also, acquiescing to the "well the system is fucked by design, why are we upset that they exploit the structure of the system" is a cop-out to the fact that their actions are wrong and need to be fixed.

To quote the magnanimous G. Costanza: "WE ARE LIVING IN A SOCIETY, HERE!!!"

Re: My Time at Lehman

#20

Post by nilkn »

jwb119 wrote: post #8

I worked at Lehman from 2004-2008 in investment banking and on the bond trading floor and I think I have a little more balanced view. Yes, there are people on wall street that hate their jobs. Yes, there are people obsessed with money. That's easy to point out. But there are also some people that are there because they like working with their friends and making big bets, and getting proven wrong or right. It's actual…

> wouldn't you feel shorted if you made the company 10x that in profit on your trades

That guy didn't make the company all that money entirely on his own. Lehman supplied the capital, they get the bulk of the profit. That's how it works.

If he wants the truly big bucks (as if a million isn't), then he should trade his OWN money. But of course he probably didn't have anywhere close to enough to do so.

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