Young Money: Inside the Hidden World of Wall Street's Post-Crash Recruits

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To my parents, who taught me
about money and its limits.

The eight young financial workers profiled in this book allowed me into their lives to an astounding (and, frankly, ill-advised) degree over the course of the more than three years I spent interviewing them. Despite Wall Street’s tradition of tight-lipped secrecy, they told me everything. They spoke candidly about their struggles and shortcomings, made me privy to confidential information about their work, and, in some cases, turned over their private diaries, photographs, and e-mails.

In doing so, they took a massive risk. All of them violated rules set by their employers that forbid them from speaking to the media without permission, and most breached boundaries of personal comfort as well. If they had been caught talking to me, they could easily have been fired—a possibility that escaped none of them.

In exchange for their openness, these young financiers made only one request: that I keep them anonymous. As a result, most names in this book have been changed, many personal details have been altered or obscured, and a few events have been reordered chronologically or given minor tweaks to make them less recognizable to the people involved. In some cases, the description of a person’s job function has been changed to that of a related job, and the names of some financial firms have been replaced with the names of similar firms. (I’ve left in place the names of prominent executives, as well as people who allowed me to use their real names.)

With these necessary exceptions, the stories in this book are true.

to succeed as a young banker on Wall Street, there are some fairly strict preconditions. You have to be pleasant, polite, and attentive to detail. You have to be able to work three consecutive twenty-hour days without having a nervous breakdown or falling asleep on your keyboard. You have to know how to calculate the net present value of future cash flows, how to make small talk about the Yankees, and, ideally, how to write a coherent memo to your boss after your third Jäger Bomb.

But most important, you have to be handy with an Excel spreadsheet. Not just handy, actually. You must be an Excel wizard—a grandmaster of the XLS file format. Which was why, on a weekday afternoon in 2010, I found myself sitting in a cramped conference room on Broad Street while a statuesque Russian woman named Valentina pitted me against thirty brand-new Wall Street recruits in a spreadsheet-formatting competition.

On your mark, get set…go!
” she cried.

All at once, the room filled with the machine-gun
sound of fingers flying over laptop keys. I looked down at my unformatted spreadsheet—it was a mess. Rows 14 and 18 should have been bolded but weren’t. There was an empty row between row 11 and row 12, and the years in row 5 were formatted to the first decimal place, so instead of saying 2007, 2008, 2009, and so on, they said 2007.0, 2008.0, and 2009.0. In all, there were about fifteen errors standing between me and the kind of pristine, organized Excel spreadsheet that would make a senior banker swoon. The all-time record for total beautification was thirty-five seconds, set by a freakish junior analyst from an investment bank called Moelis and Company. I’d be lucky if I was done in ten minutes.

I looked up at the other students in the room—a crew of eager young finance cadets who had been sent to a five-day boot camp, run by a company called Training the Street, to learn elementary accounting, basic financial analysis, and other skills they’d need at their new jobs on Wall Street. Most of them were in their early twenties, the ink still drying on their college diplomas. Some were lifelong bankers-in-training. Others were liberal arts majors who didn’t know bonds from bananas. And in a matter of days, all of them would be let loose on the markets. Armed with Bloomberg terminals and can-do attitudes, they’d get to work selling stocks, building models for billion-dollar mergers, and giving business advice to corporate executives old enough to be their parents. They were just entry-level analysts—the lowest of the low in Wall Street’s pecking order—but the fact that they had managed to get hired by some of the world’s most powerful investment firms meant that they were on the rise. Soon, they would officially become card-carrying financiers, and they would be invited to take part in a giant, globe-spanning moneymaking operation that controls the fates of companies, governments, and millions of ordinary people around the world.

I, too, was a twentysomething living in New York, but that was about where the similarities with my fellow Excel grunts ended. I studied English in college, took a grand total of zero business or economics courses, and paid no mind to the corporate recruiting circus that came to campus every year. Neither my upbringing in small-town Ohio nor my schooling had helped me understand or sympathize with what went on inside Wall Street banks. And during the economic collapse of 2008, every story I read about the financial sector’s implosion seemed to be describing a cartoonish fictional universe—one that seemed as distant from my everyday life as reading about Scientology or the mob.

But when I moved to New York after college, I started getting curious. The economy was still in shambles, and the world’s anger toward Wall Street banks was still burning blue-hot. Politicians and pundits fulminated on the greed of bailed-out bankers, and many called for them to be prosecuted and jailed. HBO talk show host Bill Maher quipped about executing Wall Street higher-ups; one online clothing vendor sold “I Hate Investment Banking” T-shirts for $18.99 apiece; and a new arcade game called “Whack-a-Banker” was introduced in the United Kingdom, in which players used mallets to take their aggression out on pinstriped financiers. (The game became so popular in its first location, the BBC reported, that the worn-out mallets had to be replaced.)

Watching Wall Street incur the world’s wrath, I often found myself wondering how the financial crisis was affecting young bankers and traders—the people my age who started their jobs in 2009 and 2010. They had nothing to do with the crash, of course. They had been in college while banks like Bear Stearns were loading up their books with mortgage-backed securities and increasing their leverage to dangerous levels. Still, as a result of the work they’d chosen, they were experiencing the financial industry’s pariah status right along with their elders.

Being young on Wall Street has always been a bizarre combination of glamour and masochism. On one hand, you’re a budding Master of the Universe—an apprentice at the feet of some of the world’s most talented moneymakers. You earn significantly more than your peers in other industries, get to witness billion-dollar deals unfold, and have a prestigious launching pad for the rest of your career. On the other hand, the work itself is often repetitive and boring, and the long hours and hellish lifestyle associated with the job can wear down even the brightest and most ambitious recruits. After the crisis, Wall Street recruits also had to cope with their industry’s new stigmatization. Many of the young people who came to Wall Street expecting champagne and caviar got dirty looks and ignominy instead.

I first realized how far the financial sector had fallen during a dinner party held at the home of a friend’s parents in Manhattan, shortly after my graduation. During dinner, an acquaintance mentioned that she’d just gotten a job in finance.

“Where?” a parent asked.

“Downtown,” the acquaintance replied.

“At a bank?” the parent prodded.

“Yeah,” she said.

“Which one?”

The young woman blushed, cast her eyes downward, and sheepishly croaked out: “Gold…man…Sachs?” The topic of conversation changed quickly, and for the rest of the night, she looked ill, as if she’d spilled wine on the host or hip-checked a family heirloom.

If one bank recruit felt this way, there were doubtless others. For years, thousands of graduates of the world’s most prestigious colleges and universities have gone to Wall Street, most only halfway knowing what they’re getting themselves into. At Harvard in 2008, 28 percent of seniors who had jobs at graduation were headed into the financial services sector. At Princeton in 2006, it was a staggering 46 percent. At Brown, my alma mater, about one in eight employed graduates typically went to Wall Street immediately after graduation—not as many as at some schools, but still a larger chunk than went directly to law school or medical school combined.

These numbers struck me as being incredibly important. After all, the junior bankers who flock to Wall Street every year are some of the nation’s most credentialed young people—the kinds of people who will make up the financial and political elite for decades to come. They are the next generation of American capitalists, and they’re coming of age in an era of tremendous shock and upheaval. I realized that if I wanted to understand what Wall Street, and America, would look like in the future, I had to figure out who these people were, and how the crash was changing their initiation process.

So, in 2010, I began embedding myself with the young finance world. I read a waist-high stack of books and articles on investment banking. I signed up for workshops to learn how to do the work of an entry-level banking analyst. I spent time at banker bars, got myself invited to parties and networking events, and snuck into the ones that wouldn’t invite me.

I considered applying to become a banker myself, but I’d written a book in college that involved going undercover at an evangelical Christian university, and I worried that Google would blow my cover if I tried a second infiltration. Instead, I tried to find as many entry-level Wall Street workers as possible who were willing to talk to me. Over drinks, at charity galas and quiet dinners in restaurant backrooms, and on sofas in their apartments, I asked them to teach me the secrets of the young finance life, and show me inside their cloistered world.

Over the course of the next three years, I interviewed dozens of Wall Street workers in every conceivable function—bankers, traders, salespeople, risk managers, executive assistants, and many more. Of those multitudes, I singled out eight young financiers to follow closely. The hours I spent with those eight—Arjun, Chelsea, Derrick, Jeremy, Samson, Ricardo, Soo-jin, and J. P.—were my clearest window into the day-to-day realities of working in finance as a young person. Their stories are the primary focus of this book.

When I wasn’t shadowing young financiers, I reported on the financial industry for the
New York Times
New York
magazine. In the process, I learned about the deal makers who plotted and executed huge transactions, the relationship between big banks and the broader economy, and what makes Stock X safer or more risky than Bond Y or Credit Derivative Z. But I also learned that despite its forbidding structure and impenetrable jargon, Wall Street is and always has been a human endeavor. People, not machines, run the financial sector. And that basic humanity is more pronounced in young financiers, who haven’t fully made the cutthroat, technocratic ethos of Wall Street their own yet.

“There’s a generation gap in finance,” one middle-aged hedge fund manager told me at the outset of my investigation. “Young people have their own risk models. They look at their place in the world completely differently than we do.”

I wanted to learn to see the world in the same way they did, even if it meant spending five days plugging formulas into Excel under the supervision of a Russian drill instructor.

“Okay, time’s up!” Valentina said, when the clock had run out on our formatting competition. Her announcement provoked a mass of groans from the students, including me, who hadn’t yet finished. “Congratulations to the winner,” she said, pointing to an incoming Credit Suisse analyst in the second row. “And congratulations to the rest of you, too. I’ve seen some very impressive work this week, and you’re all on your way to becoming excellent financial analysts.”

Or in my case, close enough.

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