You Mean We're Not Going to Be Rich?
Over the past week, a panic hierarchy has emerged in the halls of my business school.
Classmates who interned over the summer for the relatively unscathed investment banks -- Goldman Sachs, Credit Suisse, Bank of America, JP Morgan -- wear queasy expressions, as if they've just wolfed down the greasy quesadillas in our cafeteria that it's best to avoid. Those who interned for Merrill Lynch, which was acquired last week by Bank of America, fidget frantically with their BlackBerrys, checking for any news that could cost them their fulltime offers. The Lehman Brothers interns are unnaturally stoic, congregating in corners and whispering to each other, trying to avoid being the focus of everybody's attention. The panic level swings with every new piece of information released to the market: Lehman files for bankruptcy (Our offers are gone !), Lehman's investment-banking division is acquired by Barclays (Hallelujah, our offers are saved!). All this while several professors tell us that they believe we are on the verge of a depression to rival the 1930s.
Of course, students who don't get lucrative job offers are in far better shape than folks with variable-rate mortgages and families losing their jobs. But there is still something melancholy about seeing a bright-eyed student on the cusp of graduation, ready to take the markets by storm, only to be released into a world where all the portcullises to the bulge-bracket firms are slammed shut.
Uncertain of where we'll land, we instead ponder why nobody had fully read the writing on the wall. A friend from a rival business school, a summer intern at Lehman, insists that though everybody was well aware of the bank's troubles, few at the firm could have predicted last week's plunge. "We started literally the same week that Lehman demoted [chief financial officer Erin] Callan and announced its first quarterly loss since going public," he said. "But then [Hugh "Skip" McGee, global head of investment banking] gave this battle cry to the intern class that could have come straight out of 'Braveheart.' It worked. We were all clapping by the end of it."
Those at the other beleaguered banks also felt a shift over the summer. The party wasn't over, exactly, but the keg was close to running dry. "Last year, Morgan took all the summer interns out sailing in Rhode Island," said a friend who interned at Morgan Stanley. "This year it was another island -- Long Island. They took us to the vineyards. I mean, who the hell knew Long Islanders grew grapes?"
Even with the downgraded perks, my peers are still keeping their fingers crossed that their fulltime offers will be honored. But I can't help thinking that a rescinded offer could be a blessing in disguise. A junior-level investment banker's life is a brutal existence.
At least it was for me. I worked as an analyst for an abbreviated tenure and despised it enough to write a novel about the experience. In my partly autobiographical book, a posse of four analysts keep a tenuous grasp on sanity while languishing under tyrannical bosses. The nicknames we gave to our superiors hint at the sparkling personalities involved: the Sycophant, the Ice Queen and the Philandering Managing Director.
Of course, in life as in the novel, the rewards are enticing enough at first: zipping around in black Town Cars, ordering dinner on the company dime every evening off SeamlessWeb, slapping down a gold AmEx for bottle service at the exclusive club Marquee (unless you were with your vice president, who would throw down his black card with much pomposity).
But once I could afford to splurge on a Zagat-rated "$$$$" dinner, I didn't have any time for it. I frequently spent 90 hours a week shackled to my computer. Banking often felt more like an endurance test than a job, a crazy marathon with nobody to offer me a towel at the end of the race. What bothered me most, though, was the way I couldn't plan anything. When I was foolish enough to try and sneak in a Sunday matinee, my BlackBerry would inevitably vibrate before the movie's climax, forcing me to scamper back to the office to tweak a pitchbook that had to go out to the client within the hour -- even though the client was most likely somewhere in the vicinity of a golf course with no immediate interest in my piecharts.
The dangling carrot for the junior-level investment banker is the long-term potential. As you slither up the banking ladder, salaries increase astronomically. A managing director -- the top of the totem pole -- easily pulls in a few million a year. The luckiest individuals in the analyst and associate pool will migrate to a private-equity or hedge-fund position, where clients come begging their former lackeys for money. You pay your dues to reap these rewards: Pull back-to-back all-nighters without complaining, and you too shall achieve the Banker Dream -- mainly retirement at age 35 with a brownstone in the West Village, a summer house in the Hamptons and a closetful of Brioni suits and Hermès ties.
So when I watched the newscasts last week of young Lehman employees lugging their cardboard boxes out of their offices, I felt enormous sympathy. They had slogged through the worst part of banking without seeing much of the upside. They won't rise through the ranks the promised way -- keep your head down, resist the urge to throw yourself out the window, and everything will work out just fine.
But there's a silver lining. In a few years' time, when the market has recovered, all of the surviving banks will find themselves with a dearth of junior talent. When the dust clears, the cowering lackeys who survive the upheavals of today may yet become the black-card-carrying titans of tomorrow.
David Bledin is a student at Yale School of Management and the author of the novel "Bank."