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Friends Don't Let Geek Friends Work In Finance
theodp writes "If Vivek Wadhwa remade Pinocchio, instead of The Coachman luring naughty boys to Pleasure Island to engage in mischievous behavior and be transformed into donkeys, you might find Goldman Sachs CEO Lloyd C. Blankfein luring bright engineering grads to Wall Street to engage in mischievous behavior and be transformed into, well, asses. While the practice of poaching engineering talent slowed after the economy tanked in 2008, Wadhwa is dismayed to report that thanks to hundred-billion-dollar taxpayer bailouts, investment banks have recovered and gone back to their old, greedy ways, snagging engineering grads who might otherwise solve the world's problems, making them financial offers they can't refuse, and morphing them into quants, investment bankers and management consultants. 'Not only are the investment banks siphoning off hundreds of billions of dollars from our economy with financial gimmicks like CDOs,' writes Wadhwa, 'they are using our best engineering graduates [25% of MIT grads in '06] to help them do it. This is the talent that our country has invested so much resource in producing.' He concludes: 'Let's save the world by keeping our engineers out of finance. We need them to, instead, develop new types of medical devices, renewable energy sources, and ways for sustaining the environment and purifying water, and to start companies that help America keep its innovative edge.' Amen, but how 'ya gonna keep 'em down on the Engineering farm after they've seen Wall Street?"
Mama don't let your sons grow up to be bankers........
cd pub
more beer
Heavier taxes on finance income, or some sort of legal restructuring or limitation of finance itself. If you can't get money for nothing... you can't get money for nothing. The wealth gap in the US is absurd. And don't talk about ability, unless I'm completely mistaken these people are not taking any more risks or putting in any more effort than any of the other MIT grads that continue to work as productive engineers.
Emotions! In your brain!
...but how 'ya gonna keep 'em down on the Engineering farm after they've seen Wall Street?
Give them the opportunity to change the world.
If all Engineers just buy some silver, we can get back at the banksters.
Google: CRASH JP MORGAN BUY SILVER
since when is attempting to convince people to make a specific choice considered slavery?
Finance needs effective oversight, they need watching. If you solve that problem then your engineers won't be getting the offers they can't refuse.
As a nerd that has a passion for finance, one thing worth considering is that the work of finance itself is tremendously fulfilling (outside of the demonizing that happens from some ill-informed quarters). The problems that you are presented with are fascinating, you are surrounded with motivated people of incredible ability, and have unbelievable responsibility at a young age - where else would I get to advise the CEO of a company on his strategy at age 25? If you have never helped a desperate company raise capital to avoid going bust by working consecutive 100 hour weeks, I suppose I can't really explain the feeling. Most of all, the work is just interesting. Or maybe I'm the devil.
I'd upgrade that to
As long as the government views the biggest firms as untouchables, and pick one or two as examples/targets, this will continue on for some time....
Letting a few of them fail in the last debacle would have been better for the economy
Five years out of school and working as an engineer, I make a mid five figure salary. Friends I went to school with who now work in finance make low six figures.
America is not interested in keeping its innovative edge.
Or perhaps because many of these businesses can only afford to pay these people so much because they corrupted the government and got bailouts and handouts? I also don't begrudge sports salaries because I don't make that much, I begrudge them because they can only exist due to the hundreds of millions of dollars corrupted government officials dole out to them to build their stadiums (in some cases, after referendums specifically on the funding were voted down). Take away the corruption, takes away the billions of dollars in unnecessary handouts to these companies, and suddenly the playing field becomes much closer to level for more productive professions.
1. RollingStone: "Why Isn't Wall Street in Jail?": http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216
2. "Inside Job"(2010): http://www.imdb.com/title/tt1645089/
After reading/watching these, I found myself wondering why I spent all those years accomplishing nothing in IT, when I could have been robbing banks from the inside with no worries about being prosecuted.
Right, pull out the jealousy card as soon as someone sees a problem with this recruitment. The only possible reason one could have for disagreeing is that they're jealous they don't have the job themselves.
I don't demonize all (or even most) businesses who seek out the best. What I do object to is the organized cesspool of crime that is the finance industry. They are directly responsible for the current economic conditions (a recession that could lead to a depression). They produce nothing of value, and now want to leech away the best and brightest so they can make billions more. These filthy rich will do everything they can to amass more wealth, even as society crumbles around them. It doesn't matter to them, they have a huge buffer zone, and can just up and move out of a country after it's been screwed up enough.
And before you mention again that it's just sour grapes, note that I don't live in the US and haven't really been adversely affected by current economic conditions. Its just really boils my blood that people that could be making real improvements in this world are being sequestered into amassing wealth for the top 1% elite. Pure, unadulterated, unrestricted capitalism at work no doubt, but destructive just the same.
If you want more engineers, make the field more attractive. If the industry sucks people are going to avoid it no matter how badly we need it.
And I took exception with the statement "This is the talent that our country has invested so much resource in producing." That makes it sound like we gave them loads of valuable training for free and then they wandered off and left us holding the bag. What a crock. Most of them graduated with smothering debt in order to get that education...so it seems that the greater part of the investment was their own. That debt just further drives them to an industry that will pay big.
Lately I have really been lamenting the fact that I chose to program computers for a living. I see how much money people in the finance industry make. They are in a higher income bracket, and yet they don't seem to be in a higher talent or workload bracket. Why shouldn't I be envious, and why shouldn't I leave my boss high and dry for a different job that pays twice as much?
It's not slavery. Working for the betterment of mankind instead of its hasty demise is liberating. On the contrary, working for greedy pigs is slavery, no matter how much money they give you.
I used to work for the military-industrial complex. It paid very well, but it's a soul-sucking job. After one of my kids developed cancer and 9-11 happened, I decided that I couldn't go on in that line of work, and left the industry. I now work at a university for 1/3 the income, and feel much better about what I do for a living.
The determined Real Programmer can write Fortran programs in any language.
If the career path you choose is to be a thief, robbing the country blind, then yes, the government has every right to try to discourage you from that choice.
The old idea that people working in some specific profession produce nothing of value to society.
I take it you've just come back from Mars: currently, "producing nothing of value to society" would be such a massive improvement for the finance sector that even I wouldn't begrudge them a bonus...
The inventor of the mobile phone fart app has more to be proud of than the inventor of the CDO.
Of course, some people in finance might still be doing useful work - e.g. taking deposits from people with surplus cash and lending it, at a slightly higher rate, to people with short-term cashflow problems. Maybe such people should find a new name for what they do, because that sort of thing ceased to be the main business of the banks when they found that they could play insane money games with our cash, keep the winnings and send us the bill if they lost.
In a survey of 100 programmers, 111111 thought that duck-typing was a good idea.
Or perhaps because many of these businesses can only afford to pay these people so much because they corrupted the government and got bailouts and handouts?
Or perhaps the "bailouts" were actually loans that are being repaid with interest, and the Government was working for the benefit of the people, who are better off with a strong financial system?
E pluribus unum
We go through early life focusing on personal achievement, and one has to in order to succeed in the highly competitive application process to make it to MIT. You go through a intense regimine of MIT, where despite a number of classes where Teamwork is necessary you are still judged on your individual accomplishment aka Grades.
Is it so wrong then when an MIT graduate looks at the job opportunities arrayed in front of them, that they see 3 possibilities:
1) Start a new company/work at a startup, try to create something that will change the world. Payoff potentially astronomical, chance of success relatively slim. Ability for individual success to translate to financial success, medium.
2) Work for a big corporation, more than likely creating something which addresses the corporations needs, which may or may not help society. Payoff potential medium, chance of success high, ability for individual success to translate into financial success, low.
3) Enter the world of finance. Payoff potential high, chance of success mediuam, ability for individual success to translate into financial success, Very High.
Finance remains one of the few industries, where a contributer is able to directly monitor their value added and thus demand/receive incentives to match said value. What upside is there for me to go work for a GE, where even if some radical new design i create revolutionizes their jet engines and makes the company billions over the next 15 years, I'll get a decent paycheck, maybe some stock or options but in reality there is no real upside for my success.
Until society/companies puts emphasis on engineers and inventors in terms dollars, people will be less inclined to create/invent.
- An MIT '05 who works in finance.
I take strong exception to everyone in the financial sector being labeled a thief. I've worked for some excellent financial firms that have helped people to manage their finances and invest for the future. That there are amoral scumbags in the world is no shock, but just as most of the lawyers I've known are good people who try to do good in the world through their work (while their profession is tainted by the loudest minority), bankers and other fiduciaries provide an essential service which all too often does not receive the respect it deserves.
The idea is fine. Roll together a bunch of mortgages (debt obligations) backed by property (collateralized) and you have a security. It's actually a useful idea because it gives banks another market to sell these to. It gives people with money to invest another place to invest it.
The problem was basically fraud. Wrapping steaming piles of dog crap together and claiming they weren't risky was an outright lie. CDOs plus outrageous lies were the problem. I still remember well just being amazed at things like low-doc and no-doc loans. I remember applying for a loan from my bank and they offered me more than double what I could actually afford.
We want to blame the finance guys, but the problem was banks giving loans to people they knew couldn't repay them because they could just sell the loan to someone else and not care. The problem was the liars who falsely represented those CDOs that were composed of crap as being safer than they were. The problem was investors not doing due diligence, seeing anybody with a pulse getting $100k+ in money to buy a house, even if they didn't have a job and NOT being damn sure those types of loans weren't in the CDOs they were buying. The problem was investors not seeing a massive streak of systemic risk running through adjustable mortgage rate backed securities. When rates go up, defaults go up on ALL of them. Systemic risk, which is exactly what bundling things together is supposed to mitigate.
People, the very same issue would exist if this happened with savings accounts. There's nothing wrong with savings accounts, but if a chain of people did stupid things with the money in them causing it all to be lost, would we be up in arms that savings accounts are bad, or would we be up in arms about the criminals who misused them? I hope the latter.
Agreed, the 99% of them do make the 1% of you look bad.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
Your feelings are hurt? Didn't you know: your salary is not proportional to your social utility. No one thinks that the "invest in companies" part of banking is wrong. The "create useless products which cause the world to crash" is what people object to. Oh, and the "hold the public to ransom instead of going bankrupt, like honest business do" is pretty bad.
Also the "think your salary is deserved" attitude -- especially after the crisis -- is particularly grating. You do not work so hard, nor are so clever that the salaries in the banking industry can be deserved. But this is not particularly relevant.
What is, is that perfectly good engineers go and pursue essentially fruitless careers instead of advancing the lot of mankind because of the salaries offered. This means that people selected for their greed, as opposed to a love for forward looking investments, are concentrated in an industry were they can cause maximum damage. This means that there is a dearth of very good engineers in the technical fields, which destroys the potential investments you would like to make!
Upset people hate your guts for ruining the world economy with your greed and stupidity?
And exactly what has goldman sachs financed recently except themselves? VC funding has nothing to do with the likes of you. You are a leech not a true banker.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
I'm an academic research mathematician who'll soon be leaving his postdoc to look for work in the financial sector.. or any other interesting sector. I've had a lovely time doing postdocs in interesting new cities, but I'm done with the moving, long distance relationships, etc. I love programming too since like age 7, so anything goes. I promised myself however that I'd try several interesting things before taking any job that required a security clearance, i.e. NSA.
Inside academia, there are literally hordes of well qualified PhDs who'll never ever get proper research jobs simply because the number of good secure research positions grows slower than the national population while every such position produces numerous qualified people (ignore the hordes of under-qualified people graduated by some faculty). We understand this population model when we call the variable rabbits, yet we ignore it when we say academics.
Academia and industry may be losing many of the best-of-the-best to Wall St. but we've more than enough qualified people for all the high level jobs. If society wants more people in a particular field, then society must allocate the resources. You could for example quadruple the NSF's budget by shaving off just over %2 of the $900 billion military budget.
Don't like how Wall St. extracts so much money from the venture capital and IPO process? Fine, allocate $10--$50 billion for federally backed public interest venture capital operations, hell back it from social security, surely better than 3%. There will be no shortage of young engineers choosing $60k per year working on their own ventures over whatever salaries Wall St. offers. Just don't complain about people not doing socially useful work in saturated job markets, especially ones so supersaturated that all the young people end up in long distance relationships.
p.s. If we actually invested like $20 billion of social security receipts towards, then we'd see employers complain even more about a lack of qualified people, meaning people who'll do highly skilled work for little money.
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
It is not. However, Vivek Wadhwa does have a point. As someone who went from a tech/engineering background into management consulting, I have reached a point where I wish I had remained in technology, and in building something tangible.
Yes, the salary is better and the incentives are great -- I get to travel, I get to work on a variety of problems (marketing, revenue management, even technology recommendations), and in my late 20s, I work with C-level executives. It's great exposure.
However, as I near my 30s, I have to ask -- have I done anything tangible? Have I built something that made a true difference to the world? I wish I had joined a tech company and worked on my programming capabilities, so that I can build something, even if in my spare time. I wish I had used my undergrad engineering degree in working on VLSI design or something. And with the 60-80 hour work weeks and travel Monday through Thursday, I wish I had enough time for personal interests or activities -- in a past life, I used to do a lot of rock and ice climbing; it's been 2 years since I did any. Open source contributions? Zilch. Even playing with Lego seems like a chore, because I've 3 million other things to do. And you know you've a problem when you start getting worried about play being a chore, since it takes time away from other "important stuff" -- i.e. building pointless decks and excel models.
The other problem with most of what you do in finance and management consulting is that your skills are limited in the outside world, and you are so busy with your work that you've little time to learn other things.
So, I've decided to go the entrepreneurial route. I may try and fail, but at least I would have tried. With a couple of my friends (both of whom, incidentally, are from i-banking and quite burnt out themselves), we've decided that it's about time that we started throwing ideas at the wall to see what would stick. I live in Boston, so we're working with college students in the Cambridge area who are interested in working with us for a little equity and cash, and trying to develop new and interesting products.
The first of which is slated to go live end of this month -- Deal Umpire -- and a couple of others being worked on. It has been an immensely fulfilling experience.
Building a 50 page deck that no one will ever look at beyond the first two pages, a complex excel model that you spent weekends developing that gets forgotten and locked away, or making recommendations that get ignored because the client will do as the client pleases anyway -- none of this comes close to the thrill of building something on your own, something tangible and worthwhile (now, arguably, there are definitely clients and engagements that are truly interesting, and the client genuinely cares about what you are building -- but those are rarer than you'd think),
We have investors eager to fund, but we do not want to take up their offers, because we are afraid that it will be back to building decks and models to do someone else's bidding. So, we're at it on our own.
If you are an engineer, you probably went into the profession because you like to build things, because you like to open things apart and learn, and because you like the fact that creativity and analysis can often team up in building some pretty awesome stuff. You will not find that in either of those two professions. Yes, you will have money and the perks, but if you don't kindle that spark of creating something, you will soon extinguish it for greed. And that is very, very unfortunate.
Thankfully, I've a very understanding wife who is a geek herself, and she has been very instrumental in helping me keep my act together. And just the thought of working on something fun and interesting goes a long way to rekindling creativity I'd thought long gone.
Perhaps you speak a different dialect of English to me. From said act, emphasis added: ...encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions.
Also: http://en.wikipedia.org/wiki/Community_Reinvestment_Act#Relation_to_2008_financial_crisis
See particularly the mention of commercial real estate, which was never within the scope of the act. I guess all those sources that basically conclude that you, Ron Paul and all your ilk are full of shit are all part of some [insert bogeyman here] conspiracy.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Every time I see someone make a post with this sentiment, I want to vomit in their face. Are you not aware of what happened? Do you never read anything? Check out this graph. Note that over one trillion dollars on the fed's balance sheet went to buy mortgage backed securities. That is money that went to banks. Note that this is more than TARP. Note that this is just one of the ways the fed has been subsidizing banks. It's really bad, look at the numbers. Now, sorry for the vomit in your face.
"First they came for the slanderers and i said nothing."