Volume 3 Issue 47: Two-Cent Economics

Pity The Wall Street?

This particular story makes the Wall Street bankers sound so sad:

Earlier this fall, Steve Ferdman celebrated getting a job offer from Credit Suisse in the usual Wall Street fashion. Over expensive oysters and dark rum cocktails at a trendy Manhattan restaurant with his parents, he toasted landing the full-time position after working six months as a consultant without benefits. 

A week later, Mr. Ferdman, 28, sat alone at the same place and ordered a gin and tonic to lament getting laid off by the bank, for the second time since 2008. When he told the bartender about his misfortune, his next round was on the house. 

... 

The mood is even darker outside the Ivy League. Matthew Slotnick, a senior economics major at Boston College, said that he had sent more than 100 résumés to contacts on Wall Street and received several interviews. But he has not gotten any offers. Mr. Slotnick, who has wanted to work at an investment bank since entering college, is now applying to smaller banks and firms outside of New York. 

“People are saying it’s sort of a 2007, 2008-type hiring climate,” he said. “I haven’t given up, but it’s a bit depressing.” 

Any sympathy for Wall Street’s huddled masses yearning to get rich should be tempered by the fact that financial sector recessions often deal a soft blow. Laid-off financial workers typically get large severance packages, including the use of outplacement services. During their job hunt, many can draw on substantial savings built off past bonuses, on top of collecting unemployment. 

But for those laid-off Wall Street workers whose golden tickets have vanished, the disillusionment is real.

It is always difficult to sympathize with the big bonus-guzzling junkies on Wall Street. There is a reason for Occupy Wall Street. It is an industry which has been "lightly regulated" (more like unregulated) while they make tonnes of profit. As with all "frauds", as long as they keep making money, we allow them to keep doing it. Just ask Nick Leeson or Jerome Kerviel.

Even those who do not have the intention to cheat are given a huge benefit of the doubt, despite taking excessive risks, as long as they continued to make huge profits. Ask LTCM. The excessive risk-takers were probably allowed to roam free because the regulators themselves were possibly having a small piece of the action. With so much money piling up, there is bound to be some spilled over.

As for the smarties who were not able to procure jobs on Wall Street, perhaps in many years to come, they may consider it a blessing in disguise. Because on Wall Street, in the pursuit of the millions and billions of dollars, many of these geniuses lose themselves instead of finding what they were looking for.

Source: Dealbook