mathmajor92688

syncaster, sorry to burst your bubble and im doing it with a sense to inform you but..

1) its quite unusual for someone right out of undergrad to get into a HF or PE group. you usually do IB first to get into these buy side industries
2)hahah ive heard everyone working for consulting at first digs traveling. but once you are gone 5 days a week plus a missed flight here and there, its gonna tear on you. also not considering you will be paying rent for a house/apartment that you barely see
3) consulting employees, as far as im concerned, involve extremely confident, extrovert, personable, and smart people... type A people. i would even go out and say consultants are more extroverted and personable than Ibers, although i think Ibers have more ambition..

and da mn you are young.. hahah

mathmajor92688

actually barrons, i cant really think of an industry that draws overly ambitious, personable, confident, smart, cocky, and arrogant people. and thats why i think the competition will not lessen THAT much...

unless you can name me some professions... i really am curious about this. there are marketing strategists and consultants, but i think these professions are not for the overly ambitious because of the returns to work ratio..

side note, on a basic supply and demand graph, a decreased competition would mean a decreased supply, which would mean an increased pay rate.

if the the banks arbitrarily started paying less, the number of students that were attracted by the pay would diminish, therefore shifting the supply curve to the left, which then would shift the pay back to where it should be. i think the pay would remain relatively equal. i mean also, if they diminished pay, the smartest students would no longer want to study finance and would go into the med or eng professions. banks NEED to keep the same pay in order to attract the brightest and the best. i think i am making sense... maybe im not..

Majayiduke09

Some of you all who really think that all of a sudden kids from top schools will completely stop being interested in Investment Banking are delusional.

Yes, in the short-term, bonuses will take a hit; we will not see 60-90k end of the year bonuses for 1st years like in 2007 for a while. However, grads will still make a considerable amount of money as a 22 year old grad as well as have a wide variety of exits. I'd imagine all in comp falling back to 100k for 1st years for a while.

So yes...demand may slow but ironically competition will increase as the number of Wall Street firms have lessened.

barrons

People will need to have an attitude correction or risk their own money. They can become an options trader or similar job for their own account. That's where many of these types used to go. Math--you need to restudy those graphs. Firms can hire the most competent person willing to work for the least on the labor supply curve. There are fewer of them but they don't need that many so it will clear the market at say $60k per year. Those who wanted more will be SOL and going to Law School. Believe me $60K looks pretty good when the real alternative is $30K and Teach for America.

I think the volume of business will be MUCH lower a decade. Lower volume + less demand for employees. It's really very simple. WS grew by adding a huge volume of business that is now gone. They also have lost trust with many investors which will mean raising money for buyouts and such will be ver hard. Want to sell junkbonds today? I'd rather sell ice to Alaska. IBs are not very charitable about keeping people around when there is no business. They know they can always hire when things get better.

I don't know how many people WS will hire but I think it will be more like the 70's level when things were pretty stagnant for a decade.

UCBChemEGrad

^ I'm going to New York around Christmastime... I expect the new tourist destinations will be the old Lehman Brothers and Bear Stearns buildings...hopefully they'll still have the signage up.

barrons

Here's a little preview of where WS might be heading--half the prior size for non RE IB business.

http://www.bloomberg.com/apps/news?p...N8s&refer=home

MonkeySee

"Yes, in the short-term, bonuses will take a hit; we will not see 60-90k end of the year bonuses for 1st years like in 2007 for a while. However, grads will still make a considerable amount of money as a 22 year old grad as well as have a wide variety of exits. I'd imagine all in comp falling back to 100k for 1st years for a while.

So yes...demand may slow but ironically competition will increase as the number of Wall Street firms have lessened."

There aren't going to be as many exit opps because, within the next year, hedge funds/private equity groups are going to be going through the same thing banks are now.

hmom5

Don't bet on it. The new regulations leave private equity firms in a powerful place, we'll see them grow and add businesses.

heartofthecity

Private equity is thriving, specifically in the mid-market sphere.

barrons

The same folks that predicted the IB failures have a similar outlook for Hedge Funds and PE. When the economy sours it will not be possible for the firms they bought to do very well and cover debt service. It's all interconnected and nobody will be immune.

Hedge funds suffer mass redemptions - Business News, Business - The Independent

hmom5

There will always be cycles. The death of ibanking is greatly exaggerated. Goldman just did an offering that drew twice what they were looking for and that fool Warren Buffet put $5 billion in.

MonkeySee

In a sense this is the "death" of banking. Sure, it will still be around, but if you've ever worked in banking you understand that it wont be like it was. Banking wasn't just the work itself but the culture/lifestyle. The former may survive but the latter will not.

barrons

One firm does not an industry make. Yes it will exist--in a much smaller, more regulated less profitable way. With much lower average pay. Buffet is buying because he is getting in cheap. What would that chunk have cost a year ago?

hmom5

I've been in banking for over 25 years Monkey and all I can say is there's a lot of laughter over media coverage and statements like the ones made here right now. There will certainly be changes, and almost 15% of jobs on The Street had been lost already in the past 2 years, but the restructured industry is here to stay and most bankers are too.

barrons

Does not sound much like laughter here. The indsurtry has not yet restructured to meet the level of actual business they will have next year. How much deal volume will there be and how much in fees? Banks will cut people without a second thought. I expect about half will be gone in a year.

Lehman Bros., Merrill Lynch employees anxious about future - Los Angeles Times