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My Time at Lehman

nickchirls.com

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Re: My Time at Lehman

#151

Post by rayiner »

pyoung wrote: post #143
penny500 wrote: post #61

Earlier quoted context omitted.

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 shou…

The US is a model of reaching the right regulatory balance. No joke. The Asian countries are headed in the direction of more regulation as their economies mature and the naturally explosive growth of new industrialization transitions to a sustainable economy. Meanwhile, after decades of stifling over regulation, in the 1990s and 2000s Western Europe has liberalized it's economic policies and become more like the US. Australia has always been like the US and has been very successful for it.

Re: My Time at Lehman

#152

Post by Florin_Andrei »

neilk wrote: post #27
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…

Free-market believers assume there must be somebody in the system with the incentives to help those less sophisticated investors. Or that the market will eliminate con artists, because their investments must be weak. That's how you get Alan Greenspan, thought by some to be a sophisticated thinker, flabbergasted that the events of 2006-2008 were even possible.

Somebody, but not me.

Me, I'm busy with the hand over fist endeavor.

Re: My Time at Lehman

#153

Post by rayiner »

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…

You're probably not saving a million in four years. First year analyst is like $120k or $130k all in. First year associate (fourth year in, -ish) is like $250-300k?

Re: My Time at Lehman

#154

Post by rayiner »

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…

The fact of the matter is that banks are up or out. Most people won't make MD, either because they can't stand it anymore or they're asked to leave. So most "take that opportunity." As for what they do--they take a few hundred K and a prestigious job title to a cushy corp finance position or similar. The superstars go to a hedge fund and make even more money.

Re: My Time at Lehman

#157

Post by Evbn »

mgkimsal wrote: post #101
mapgrep wrote: post #93

Earlier quoted context omitted.

>what do you expect in a free market system that rewards every marginal advantage I expect the government to allow so-called free market capitalists to fail when they fail. Lehman was emphatically NOT staffed by the best and brightest -- it collapsed. All the other big banks should have been allowed to collapse as well, rather than be bailed out by a staggering infusion of free government money and hidden bailouts li…

I could swear I'd read somewhere a couple years ago that a lot of the TARP money - especially from smaller banks - was repaid by them refinancing into SBA loans. So, yes, technically TARP funds were repaid, but often by borrowing from some other govt program at a lower rate. I might refinance my house to a lower rate, but I would be lying if I said I "paid off" my house. I paid back one lender by borrowing from anoth…

That's obnoxious, but it is less than 1% of TARP funds, right?

Re: My Time at Lehman

#158

Post by Evbn »

RestlessMind wrote: post #100
mapgrep wrote: post #93

Earlier quoted context omitted.

>what do you expect in a free market system that rewards every marginal advantage I expect the government to allow so-called free market capitalists to fail when they fail. Lehman was emphatically NOT staffed by the best and brightest -- it collapsed. All the other big banks should have been allowed to collapse as well, rather than be bailed out by a staggering infusion of free government money and hidden bailouts li…

>Lehman was emphatically NOT staffed by the best and brightest -- it collapsed. "Lehman collapsing" might be unrelated to "individuals at Lehman succeeding". You make a big gamble and if you succeed, there is big bonus. If you lose, there are no financial penalties (at worst, you lose your job which should not be a big deal for someone who has already made millions. Like, Dick Fuld). In fact, in absence of regulation…

Ding ding ding.

"moral hazard" / "agency problem"

Re: My Time at Lehman

#159

Post by Evbn »

hkmurakami wrote: post #62
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…

>Why should retirement accounts get invested in anything but government bonds and index funds? Step 1: Pension return rates get "set" during boom time highs. Step 2: Boom times end, the pension fund is grossly under funded, and the manager needs to find ways to get excess return beyond what the typical fixed income and equity products can offer. Step 3: Pension Managers reach for "alternative investments", hoping for…

Step 4: shut down (by force of law) all pensions that claim to offer returns in excess of the Treasury bill rate.

Employees shouldn't be forced to but their compensation in a lottery managed by someone else with fraudulent promises of returns.

Re: My Time at Lehman

#160

Post by bearmf »

SourPatch wrote: post #119
jnewell wrote: post #90

I cringed when I read this headline on HN because I too worked for Lehman between 2006 and 2008. I felt the same way Nick did even around the same time (wanting to go back to making "real things"). However, lately I feel like I have come back somewhat full-circle. Many of the issues he complains about is rampant in almost of every industry. For example, Groupon was basically taking advantage of unsophisticated small…

I think you raise a very interesting point. When you read stories about trading, often people bring up the question, "What value does it provide to society?" Much of the commentary I read wants to apply that judgement to trading, but nowhere else. Are designer jeans a benefit to society? Is fast food? Are casinos? Does everyone's job need to be beneficial to society? And if so, who makes that call?

Clearly designer jeans and fast food are more beneficial than casinos and zero-sum trading. The first two are at least somewhat useful, are not that addictive and do not harm anyone except maybe people who eat too much fast food. Casinos are of some entertainment value, but are very addictive and have negative effects on neighboring communities. Zero-sum trading is tricky, it is not that addictive but very few people benefit from it at all, less than from casinos and much less than from designer jeans. At the same time negative externalities probably exist but are not well studied.
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