Highlights: Young Money: Inside the Hidden World of Wall Street's Post-Crash Recruits, by Roose, Kevin


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This new plan, nicknamed “two and out,” was a brilliant tactical move. Selling Wall Street jobs to undergraduates as a temporary commitment rather than a lifelong career enabled banks to attract a whole different breed of recruit—smart, ambitious college seniors who weren’t sure they wanted to be bankers but could be convinced to spend two years at a bank, gaining general business skills and adding a prestigious name to their résumés in preparation for their next moves.

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He proceeded to explain that by coming onto campus to recruit, by blitzing students with information and making the application process as simple as dropping a résumé into a box, by following up relentlessly and promising to inform applicants about job offers in the fall of their senior year—months before firms in most other industries—Wall Street banks had made themselves the obvious destinations for students at top-tier colleges who are confused about their careers, don’t want to lock themselves in to a narrow preprofessional track by going to law or medical school, and are looking to put off the big decisions for two years while they figure things

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extremely skilled at appealing to the anxieties of overachieving young people and inserting themselves as the solution to those worries. And the irony is that although we think of Wall Street as a risk-loving business, the recruiting process often appeals most to the terrified and insecure.

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Banks, in other words, have become extremely skilled at appealing to the anxieties of overachieving young people and inserting themselves as the solution to those worries. And the irony is that although we think of Wall Street as a risk-loving business, the recruiting process often appeals most to the terrified and insecure.

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“Think about it: if you go to a bank, you make as much money as anything except hedge funds, private equity, or possibly a tech startup. Those things are wildly more risky and a lot harder to do.

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Jeremy wanted to believe that a bank didn’t have to exist solely for its own preservation and enrichment—that all that stuff he’d heard in recruiting about being a “trusted advisor” to clients wasn’t just marketing fluff.

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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.)

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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.

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After hearing Chelsea detail her woes, I began thinking about the kinds of young people I’d seen flourish in finance—the ones who seemed genuinely happy with their careers. It occurred to me that those people tended to fall into three general categories—call them Habituals, Locomotives, and Gunners.

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In social psychology, this phenomenon is called the “hedonic treadmill”—the shifting of desires relative to achievements. And although it applies in every industry, it’s baked in to Wall Street’s basic ethos. By virtue of their stations in life, young Wall Street bankers and traders are rarely unlucky, but they are always relatively unlucky—there is always someone, somewhere close by, making ten times more money or with ten times more responsibility and status. And after 2008, the element of scarcity was added to the equation. Now, Wall Street workers were not just battling for a piece of an infinitely large pie. There was less to go around—fewer jobs, smaller paychecks, tighter opportunity sets. To borrow David Foster Wallace’s description of literary New York, bankers after the crash became “great white sharks fighting over a bathtub.”

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To correct for the possibility of missing the whole picture, I decided to try to find the dark heart of young Wall Street—to venture past the likable into the utterly unredeemable. I decided to go to Fashion Meets Finance.

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Fashion Meets Finance is a singles mixer series with a simple premise: take several hundred male financiers, put them in a room with several hundred women who work in the fashion industry, and let the magic happen. The series was started in 2007, and it is predicated on the idea that male Wall Streeters and female fashion workers, as the respective alpha ascenders of their tribal clans, deserve to meet and procreate, preserving the dominant line in perpetuity. It’s social Darwinism in its purest, most obnoxious form.

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“I want the real deal!” said one female fashionista, who was sprawled out on a white sofa on Bar Basque’s terrace, sipping a vodka soda and watching the men walk by. “I’m really independent,” she said, “and I don’t want someone who needs to be around me all the time. I want them to work

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Ricardo’s situation wasn’t uncommon. Every year on Wall Street, first-year analysts who were once courted by college recruiters with lines about how they would be given meaningful, creative work and the chance to learn from top executives are shown the harsh truth: they are Excel grunts whose work is often meaningless not just in the cosmic sense, but in the sense of being seen by nobody and utilized for no productive purpose. Some of the hundred-page pitch books analysts spend their late-night hours fact-checking in painstaking detail are simply thrown away after being given a quick skim by a client. In other cases, the client doesn’t read the deliverables at all, and the analysts’ work is literally garbage.

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break the entire chain and require hours to fix. Making one model is annoying; doing it twice a day involves getting accustomed to a constant low-level terror that is akin to working at a Christmas light factory, and knowing that one badly installed bulb in a string of ten thousand lights will make all the other ones go dark.

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In the course of my finance-industry immersion, I often found myself asking older bankers about the necessity of the first-year lifestyle. In an era when technology has made working from home much more feasible, why are bankers—whose work comes in fits and spurts—required to be physically present at their desks for upwards of twelve hours a day? Couldn’t you hire twice as many recent college grads, pay them half as much, and create a more reasonable sixty-hour week for everyone?

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answers I got came in several flavors, most of which boiled down to “Because it’s always been like this.” With the same attitude as a fraternity brother who treats the pledges like dirt because he remembers being abused as a pledge, many older managers on Wall Street seem to cherish putting analysts through their paces. And although some bank executives recognize that burnout and exhaustion are common among young analysts, they don’t necessarily seem to view it as a treatable issue. “Is there a way to make this easier on analysts?” one senior Wall Street hiring director asked me, then answered his own question: “Yeah, probably. A lot of it you can’t control. But we try to get managers to think about, how do you distribute work evenly to analysts, and do it and sooner in the day? That seems to make a difference.”

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And others explain it as a self-selection mechanism. When given such unreasonable hours, the logic goes, analysts either bow out under pressure or rise to the challenge. How else are you supposed to find out who is real Wall Street material?

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contract that had existed on Wall Street for decades. As part of the basic bargain, analysts were asked to demonstrate full loyalty to the firm by becoming a slave to its demands. In order to fully belong, the first-year analyst had to realign his priorities, replacing his own with his bank’s. And seen in this light, all the young banker’s cancelled dinners and broken relationships aren’t just unpleasant externalities—they were central to the process.

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The detour cost him five minutes, but it made him feel less like part of a platoon of soulless banker automatons, and more like his own man.

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They had started smoking weed together on Jeremy’s roof deck—first occasionally, then nearly every day as their outlooks on life worsened. And, during some of these smoking sessions, they had started plotting a mass exodus of first-year analysts out of Goldman, in which everyone would announce their departure on the same day, then take to the Internet and tell their horror stories of working at the bank. They called this fantasy “Wall Street Drop Day,” and had even taken the liberty of reserving the domain name wallstdropday.com, just in case it ever came to fruition.

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He didn’t think it was possible, medically speaking, to get an autoimmune disease from working too much. But he wondered if the sacrifices of his body and mind he’d been making for the sake of the bank had exacerbated his condition, or made it harder for him to notice that something was wrong. The more he thought about the antibodies attacking his organs, the more offensive it seemed that he had skipped so many gym visits, done so many rounds of shots at the bar with his colleagues, or pulled so many all-nighters while making tiny edits to pitch books and trying to figure out whether a corporation was worth 8 or 8.5 times pretax earnings.

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I’d spoken to a number of older financiers in the course of my fact-finding, and asked them how their lives had morphed as they’d made their way up the ladder. Some of them had kept their noses to the grindstone, worked hundred-hour weeks well into their thirties, and eschewed the pleasures of a normal life for a chance at rapid, lucrative career advancement. They jumped to the buy side when the time was right, or remained on the management track at their firms, and saw their income increase rapidly year after year. Others had stepped off the hedonic treadmill, accepted the fact that they were likely never going to make it to the CEO’s chair, and did the best they could to provide value to their firms in whatever roles they inhabited. This was a less sexy version of the finance path, but one that was becoming increasingly appealing as the financial sector struggled, and people attempted to mitigate their personal risks by staying put.

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He knew that the pressures of being young and servile would eventually ease up, and he’d be left with a secure career that would give him the time and disposable income to do the things he really cared about.

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What Wall Street was, I heard over and over again, was completely amoral. It had no regard for whether a given deal represented a net good or a net loss for humanity. All that mattered was the revenue. If a bank could make ten billion dollars by spreading malaria vaccines throughout Africa, it would do it in a heartbeat. And if a bank could make ten billion dollars by spreading malaria itself? Well, the idea might at least be floated.

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To her, the great tragedy of Wall Street wasn’t that it was evil and greedy, but that it was fundamentally boring, a place populated by the kinds of uncurious corporate drones who had no lives outside of work, who watched CNBC out of personal interest and considered Berkshire Hathaway’s annual investor letter the ne plus ultra of high literature. It was those people—and not insider-trading felons, book-cooking CEOs, or sneering plutocrats—who made her want to run screaming from the finance world.

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“You’re working with this constant fear,” he said. “You go to this bulletproof firm, it gives you a ton of options, and it’s really self-validating. And then all of the sudden, you have no options, you’re not getting paid nearly as much as you thought, and you might get fired. And then you start thinking, Well, shit, I could be halfway through law school, and instead I’m in New York dicking around doing models and bottles, and at the end of it I won’t even have that much to show for

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“Seven years ago,” Trevor said, “the only way to succeed was in private equity or hedge funds. The folks I was in i-banking with weren’t asking about personal fulfillment. But now with the financial crisis and a tech boom, people are saying, ‘I don’t need to sacrifice twenty years of my life to get where I want to be.’”

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As I walked home from my meeting with Trevor, I reflected on all the things I’d learned about the passions of the young financiers I was getting to know. I recalled Jeremy’s love of car mechanics and engineering, Chelsea’s business ideas scrawled in her notebook, Ricardo’s desire to be a doctor. I thought of how none of them had grown up wanting to be investment bankers, but had at some point been convinced to forgo their truest aspirations in order to work on Wall Street.

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couldn’t really begrudge them that choice. It’s a rare luxury, reserved mainly for children of privilege, to be able to make a job decision straight out of college based solely on passion, with no regard at all for money or security. Most entry-level jobs, in any field, involve corporate drudgery of some sort. And many of the young people I knew in New York who were pursuing artistic or creative endeavors also had substantial safety nets. In an economic climate where nearly 20 percent of people under twenty-five were unemployed, and far more earned less than they should have, it’s no mystery why finance jobs remained a desirable plan

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couldn’t really begrudge them that choice. It’s a rare luxury, reserved mainly for children of privilege, to be able to make a job decision straight out of college based solely on passion, with no regard at all for money or security. Most entry-level jobs, in any field, involve corporate drudgery of some sort. And many of the young people I knew in New York who were pursuing artistic or creative endeavors also had substantial safety nets. In an economic climate where nearly 20 percent of people under twenty-five were unemployed, and far more earned less than they should have, it’s no mystery why finance jobs remained a desirable plan

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The British economist Roger Bootle has written about the difference between creative and distributive work. Creative work, Bootle says, involves bringing something new into the world that adds to the total available to everyone—say, as a doctor who treats patients, or an artist whose sculptures decorate public parks. Whereas distributive work—which could characterize many corporate jobs, but especially those that involve intermediary functions like banking and law—only carries the possibility of beating out competitors and winning a bigger share of a fixed-size market. Bootle explains that although many jobs in modern society consist of distributive work, there is something intrinsically happier about a society that skews in favor of the creative. “There are some people who may derive active delight from the knowledge that their working life is devoted to making sure that someone else loses, but most people do not function that way,”

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Nor should they. Whatever your views on Wall Street banks, their basic functions (advising on mergers, underwriting bond offerings, lining up buyers and sellers of securities) need to be done somewhere. Even though regulations and political pressure could eventually shrink those banks to a more reasonable size, they can never go away completely. As long as we want to have an economy where companies can merge and acquire other companies, and where businesses can raise money and compete in the global markets, we will always need some number of twenty-two-year-olds churning out Excel spreadsheets night and day in the bowels of investment banks.

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If the Wall Street career path continues to break down, in other words, it may lead to a more equitable allocation of resources, in which talented, highly creative young people use their abilities for purposes other than padding an investment bank’s bottom line. And if that happens, the financial crisis will have sparked at least one good change.

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independence. He saw some of that in Graham, whom he’d long thought could be the CEO of a Fortune 500 company, or an actual senator, if he could only start caring about something other than his bonus.

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“Ultimately,” he told me, “the product Goldman is selling is its balance sheet. At the end of the day, if you have the Goldman balance sheet in your pocket, your job is pretty easy.”

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“So, what motivates you?” he asked. Graham leaned back in his chair. “Making money,” he said. “Making as much money for myself and the firm as possible. You know, if money is not your main concern here, you should leave.”

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Jeremy liked the start-up, which had nothing to do with oil, gas, or any of his other areas of expertise. But more than that, he liked what the start-up represented—the boldness of breaking out of a stable corporate environment, the relaxed work atmosphere, the colleagues who cared more about improving their company than playing politics and angling for promotions. Working there would put him in the company of a bunch of smart, young, creative people doing interesting things. And although leaving now, instead of in February, would cause him to miss half a year’s bonus, who cared? If the start-up became a behemoth, his stock would make him rich.

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Jeremy went back to his apartment and logged on to Facebook, so that all his friends could see the momentous step he’d just taken. In the status box, he wrote: “The nightmare is over. As of today, I am no longer a Goldman Sachs employee.”

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As the deal progressed, though, the kinds of feedback Derrick got from his firm’s principals had nothing to do with the kinds of improvements he thought the firm could bring to the business. Their ideas were all about cutting costs quickly to increase short-term profits, and reselling the business for a higher price than they paid without having done anything to improve the company at a fundamental level.

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“We can easily grind out 50 mil on rationalizing labor and liquidating assets,” one principal said, meaning that he thought the firm could increase the value of the company by $50 million simply by firing workers and selling off equipment. The reaction played right into Derrick’s worst fear: that he was working in an industry that paid lip service to turnarounds and corporate improvements but was really practicing a particularly venal kind of fee-seeking finance.

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Derrick was in danger of getting trapped by both golden handcuffs and status handcuffs—the inability to give up the benefits a Wall Street career afforded a guy who wanted, above all, to feel like he had standing and respect.

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“One fear is that I’ll stay in private equity and wake up when I’m thirty-five and find out that I’m not necessarily that much smarter or better than I was when I was twenty-five.” “And the other?” I asked. “The other is that, here I am on this path, and if I don’t fuck it up, I’ll be wealthy.”

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As Derrick spoke, it occurred to me that my young Wall Street immersion was revealing just as much about being young as being on Wall Street. The analysts I was interviewing, after all, were not mature, developed titans of industry, with full conceptions of themselves and their values. They were kids, roughly my age, who wanted to build a good life for themselves but were unsure which bricks and beams to use. They were being bombarded with definitions of success and chances to tweak and expand those definitions. And slowly, they were trying to figure out where in the world they stood, and what they wanted their lives to represent.

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As I spoke to Ricardo and Arjun that winter, I began to understand why they were intent on remaining in the financial sector for the foreseeable future. And I couldn’t necessarily blame them. They were twenty-four and twenty-five years old, respectively. Both had been raised by immigrant parents who stressed the value of earning money and having stable careers. And if they stayed a few more years in finance, they would be able to guarantee themselves a generous standard of living for the rest of their lives. For those who can make it work as a career, Wall Street is still an unparalleled personal economic engine.

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Money aside, a career on Wall Street does carry some benefits. One of them is that the finance world is a huge umbrella, with thousands of different jobs that involve varying functions and work environments. If you don’t like corporate finance, you can move to prime brokerage. If you hate your job in equity research, you can move to a hedge fund whose specialty suits you better. The analysts’ obsession over “hot desks” and stratification within investment banks obscures the fact that these are all high-paying jobs with lots of mobility and opportunity. Even the lowliest back-office manager at a major investment bank earns more than the leading practitioners in many other industries.

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and a meaningful percentage of the young people who come to Wall Street for two years after college stay in related fields for the rest of their professional lives. (One headhunter I spoke to estimated that only 10 percent of young Wall Street workers ever leave to work in a completely different industry.)

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It saddened me to imagine Ricardo and Arjun spending their lives as the vice presidents of such-and-such obscure finance subdivisions. Both of them had outside passions that, statistically, they were extremely unlikely to ever pursue, now that they’d survived their first two years on Wall Street and decided to press on in the financial industry. And I couldn’t help but think that they’d be able to contribute more, on balance, doing things other than serving as well-paid investors and intermediaries. But they seemed to be happy to

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These organizations have figured out that they don’t have to offer six-figure paychecks to entice students to join their ranks. They just have to recruit early in the school year, equip students with specific on-the-job skills, surround them with other smart young people, and give them prestigious and meaningful roles that will look good on their résumés and not limit their options in the future.

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They will realize that hiring intelligent, committed A students from nontarget schools does them more good in the long run than hiring B students from Yale who will bolt at the first sign of trouble or disillusionment.

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I’d seen most of them become less happy and optimistic, more cynical and calculating. They were slower to smile and quicker to criticize. Many of them began to talk about the world in a transactional, economized way. Their universes started to look like giant balance sheets, their appetite for adventure waned, and they viewed unfamiliar situations through the cautious lens of cost/benefit analysis. Sure, some of them had decamped to tech firms, but they had all stayed in industries that were highly paid and traditionally prestigious, and none of them had gotten out of the private sector entirely. Many of them, I suspected, would never be able to make art, volunteer for nonprofits, or give their time to nonwork hobbies without keeping a running P&L in their head.

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These financiers form an elite class that will go on to become influential in the top ranks of government, technology, and culture. And if they all share the experience of having spent their formative years working as entry-level bank analysts, performing and internalizing the ethos of the financial sector, it means that, in a way, we’ve allowed Wall Street’s culture to enter our national bloodstream.