I had known for some time that things were going South. Management would hold periodic "town hall" meetings where everyone would pile into a room and listen to a bland presentation detailing the firm's recent successes and those ever-nebulous "areas for improvement." Throughout my year on the job the prognosis in these speeches became progressively more grim. It went from, "we are operating from a position of strength, " to "we need to cut costs." One of my personal favorite euphemisms--unveiled at one such town hall meeting in October of 2008 -- is the manufactured verb "right-size." In response to questions about whether or not layoffs would continue, one executive said earnestly that "we may still need to 'right-size' certain areas of the business." I lost my job in November.
My specific business group had gone from steady money-maker to potential disaster. When I started I was told that my group, which practiced a form of collateralized lending -- the collateral being illiquid and opaque assets known as hedge funds -- was judged not to a threshold of "zero loss", but to one of "zero controversy." With the much publicized turmoil in the hedge fund industry we had used up our allotment of controversy about five times over. I was effectively a salesman, tasked with supporting the effort to generate new business. Given that the bank was entering a period of damage control and risk aversion, I did not expect to be selling complicated and risky financial products for too much longer.
For the time I was being kept afloat by a bloated beast. There were several periods during which, for weeks on end, I would come to work and do nothing. I would get in early, say 7:45 am, and leave perhaps at 7:00 pm in the evening or later, but do one hour of actual work. It wasn't for lack of initiative, interest, or competence. There simply wasn't enough work to be done. I would create projects for myself, study financial concepts I hadn't yet grasped, read the news. If I needed a mental break I went to CNN.com, which is to the Internet as "Armageddon" is to the Movies. "Getting coffee with so and so" seemed to be the most acceptable form of time-wasting. I also spent time just chatting with people on the desk. We talked mainly about current events -- the election, the Somali pirates, the reversion of Iceland to a hunter-gatherer society, Britney Spears, Britney Spears' sister, the Somali pirates, and ridiculous investment strategies such as the Credit Card Arbitrage. A good conversation might go for an hour or more. In short, the expectation of anything but termination would have been naive.
Tension was palpable from the moment I walked in that Friday morning. The concentration of pale-faced senior managers behind closed doors was a dead giveaway. I couldn't focus and passed the time nervously chattering with colleagues. It was unclear, even to my managers, who would be going home that day. We were warned, however, that it was "going to get ugly." Around 11:00 am the bloodletting commenced. The head of our division was posted up in a corner office. His business managers walked the rows, quietly tapping folks on the shoulder and saying, "Excuse me, Tom, do you have a moment?" Voyeurs stood like so many meerkats, waiting to see who would be next. Once tapped, Tom would follow Ron down the corridor to the corner room, thank him for the escort, and enter to receive his sentence. The Boss, staring out the window pensively, would turn and rub his eyes, playing the tormented executioner. For legal reasons, the communication of termination must be done in a specific way, so the Boss reads what is essentially a script: "The Blah Blah Group is being restructured due to the downturn in the markets, and your position has been eliminated." He cannot express any sense that they would prefer to keep you or that you have done a wonderful job, only that business needs have changed. He then explains that an HR representative is waiting in the room next door to answer questions and provide more detailed information about the termination process. The whole process lasted less than five minutes.
I saw Ron coming from a ways off. Our eyes met briefly, but I quickly looked back at the computer and pretended to be busy. "Excuse me, Jon, you got a moment?" he said politely. I simply smiled and got up. I immediately felt relief. There was nothing I could do to stop this. No more anticipating, no more questioning, no more second-guessing myself, no more worrying, no more trying to save my job! All that was left to do was sit back and let it happen, and it felt great! I actually felt blessed to be a part of it. I was a victim of the financial crisis, how exciting!
Out on the trading floor everyone was in shock. The Spared looked around in awe, unable to focus on their newly augmented work load. The Soon-to-be-departed milled around, collecting things, saying goodbyes, insulting management through uneasy smiles. Stoic veterans looked on through the pain questioning what went wrong and what they could have done to stop it. Their looks belied a feeling of paternalistic sorrow as they watched this systematic culling. Young women cried unabashedly, perhaps out of a sense of rejection, perhaps about the money, perhaps in anticipation of missing friends. For me the take-away was that many people on that trading floor, myself included, were still just kids.
Paradoxically, my rejection by the firm brought with it a sense of validation. One consequence of being young on Wall Street is to be constantly worried. Worried that you aren't doing enough, worried that what you are doing is not good enough, worried that you somehow won't live up to the manically high expectations that have been set since Day 1. When you are an intern you worry that you won't get hired. When you are working you worry that you'll get fired. And, if you are past the worry of getting fired, you worry about how much you'll get paid. It never stops. The worries always got to me. Even one year into the job, I walked to work every Monday with a little knot in my stomach. When I was let go, however, I encountered an outpouring of support and commendation for a job well-done. In addition to my personal victory, I was rewarded with an uncommon glimpse into the hearts of my now-former colleagues. While interpersonal emotions do not generally run rampant on the trading floor, I could see in people's faces that this whole thing truly pained them. They hated to see friends and veterans, whose families they knew and whose friendship they valued, get sent home to face a troubling future. They hated to see young upstarts, approaching the prime of their careers with enthusiasm and energy, get cut off so soon. I really enjoyed seeing this human side of the industry, despite the context in which I saw it.
The question of what to do next immediately loomed large. Initially I felt immense pressure to stay the course. I had developed an expensive lifestyle and it seemed risky to delay the search for new employment, severance pay or none. These practical worries were constantly competing with, and ultimately overshadowed by, questions of worth and purpose. These questions had always dogged me, being one of a new breed on Wall Street. As a result of the industry's hiring binge, in which liberal arts graduates were just as prized as the one-track finance whiz, the makeup of young Wall Street has become far more diverse in terms of backgrounds, attitudes, and ambitions. Many recent hires, myself included, approached the industry with a utilitarian mindset: Do it for a few years, pocket a couple hundred thousand dollars, then do something more exciting and fulfilling. With the financial crisis in full swing, however, this idea began to lose its viability, and the opportunity cost of switching tracks began to diminish.
My feelings on the industry were and remain complex. To some extent, I drank the Kool-Aid. Investment banks provide a service to society by greasing the wheels of innovation, investment, and industry. I found plenty of interesting, well-educated, down-to-earth family people. These folks work hard, save rather than splurge, and aim to conduct business with honesty and integrity. For a young person, it is a great place to cut your teeth in business. You learn to be diligent, quick on your feet, and professional. Your opinion matters to those around you, and hierarchy, while certainly present, is not all-encompassing. The education is comprehensive, touching on business, law, finance, communication, politics, economics, and so on. Most large firms encourage and support philanthropic endeavors, and community involvement is emphasized. All in all, part of me feels its just another workplace where people are doing the best they can for themselves and their families.
Taking a more critical view, however, I distill the world of finance down to its essence and am left with an industry whose sole purpose and trade is to make, move, and modify money. Coca-Cola also strives only to make money, but they do it by making beverages people want and consume. The financial industry makes money to make money, they make money complicated to make money, they hide and reconstitute money to make money. Even when they lose money they find ways to make money. The circularity could make one's head explode. I would sometimes stand in meetings late at night, observing the seriousness and concern with which people debated this deal or that trade and find myself unable to answer the questions of "why?" and "what for?"
I now think the "Main Street" perception of recklessness in the ivory towers of Wall Street, which initially struck me as too emotional and unfounded, is partially accurate. One realization I've come to during my post-termination reflection is that very few people in those banks truly have a grasp on what is happening. A bank's trading operations comprise dozens of small groups, segmented by the product they are trading or creating. There are dozens and dozens of products being structured and traded in markets all over the world. These groups range in size from 3 people to upwards of 15. Each group has a senior manager in charge, who in turn reports to another senior manager, and so on through several levels, funneling upwards to the heads of the divisions and then to the CEO. Even with their best efforts, senior management cannot possibly understand all that is happening beneath them.
Managers in all industries grapple with the challenge of delegation. In finance, however, where the stakes are so high and the situations so awesomely fluid, it is a recipe for disaster. I found out after I was let go that one manager was laid off because he had given the go ahead to a trade that lost one hundred million dollars. Sure, risk managers reviewed the trade, but they review many trades on many different fronts, and when a trained salesman (everyone on Wall Street is a salesman) tells them it is a good idea, they usually end up buckling. What other industry puts that much money at risk within such a decentralized decision-making framework? I have now seen clearly that the market of recent years was like a caged tiger: Tame until it decides not to be. In a split second, the animal's wild soul asserts itself and someone loses a piece of his neck. Such was the financial industry's pursuit of greater and more exotic sources of profits. On the day I left, my group, once thought to be bullet-proof, was facing potential losses of over $100 million.
The most oft-used platitude during these times has been "it is what it is." For all its nothingness, it speaks volumes about the resignation with which many industry participants, but certainly not all, view the current crisis. In a finance professional, this attitude is borne of necessity. It keeps him resilient. It speaks to the fact that in this industry, if you lose a bit of money, you pick yourself up and try to make it back. In light of all that's transpired, however, I'm beginning to think that this is a dangerous attitude. It shows a lack of reflection and a short-term perspective. That is the attitude many will carry with them to the job that opens up at the bank or hedge fund down the street, and it is the attitude they'll carry with them into the next big disaster.
I'm still searching for a calling, and at this point I'm completely content with a job being just a job. This job was a learning experience for which I am thankful. I worked with people whom I still respect, admire, and miss. That said, I feel spared. The job had become trying and miserable, and perhaps it was just not for me. I heard a senior colleague say he was embarassed to tell people what he did for a living, and, amongst my friends and acquaintances, he is not alone. Many are plain sick of it. As for me, I no longer have to deal with these questions. I'm not sure what I'll do next, but I'm finally on my way to Buenos Aires.