Prospects for Would-be Investment Bankers?

<p>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.</p>

<p>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.</p>

<p>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?</p>

<p>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.</p>

<p>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.</p>

<p>Lehman</a> Bros., Merrill Lynch employees anxious about future - Los Angeles Times</p>

<p>Take a look at the deal Buffett got--if that's not a deal of desperation I have never seen one.</p>

<p>Bloomberg.com:</a> Worldwide</p>

<p>Half's probably a bit extreme but there are still definitely cuts to be made. I think Ken Moelis was pretty on target earlier this year when he said Wall Street was around 30% overstaffed or so.</p>

<p>If you think PE is going to absorb much think again</p>

<p>Guy</a> Hands: PE dealmakers could see 75% pay cut (Dealscape)</p>

<p>
[quote]
Take a look at the deal Buffett got

[/quote]

Yeah, I would love to earn a 10% yield while waiting for capital growth. ;)</p>

<p>Private equity - The next big thing</p>

<p>MBA</a> Admissions and Careers: The Next Big Thing</p>

<p>Barrons, simply, you are buying the media hype as many are because they want to. UMich, you're on target. WS was way overstaffed and 30% sounds about right. There was major correction at most banks over the past 2 years and there will be further deep cuts. Most on the Street are glad to see the streamlining and the exit of the mediocre and the dishonest. </p>

<p>Mediocre PE firms will soon be gone to the relief of many. During boom times any idiot can make money in some areas. Look for the good firms to grow considerably and add new businesses. All good people in traditional firms are being called by PE firms to defect and many will.</p>

<p>For those who want to enjoy the media portrayal, enjoy! There are always people anxious to see the fall of those they perceive have gotten easy breaks or have too much whether they are ivy league students or folks on The Street. That's life. There were and are crooks on WS just like everywhere else. All their hard working, honest cohorts are happy to see them go. Yet the general public just prefers to blame The Street for things like the mortgage debacle rather than the individuals who partook or their greedy mortgage brokers because the big guy always falls hardest. Again, just life.</p>

<p>I do wonder what the handful of people who are on every thread quoting media sources who haven't a clue get out of this. Those who predicted the big fall see a big fall. Those who've slogged it out on The Street see a needed correction and some needed regulations. The story is far more complex than the average media guy can absorb and the reporting is humorous on many levels. The Guy Hands story above is a great example. It talks about cuts in PE compensation due to longer term exits. This happens in every recession and has nada to do with what's happened to ibanks! The LBO guys weather every cycle and sell when optimum. </p>

<p>My reason to even address the negativity and misreads here is to assure those students with an interest in finance that WS remains a very real career option.</p>

<p>I was around here saying the same things WAY before the current situation. </p>

<p>Jack Welch and many other REAL top business people agree with me.</p>

<p>""We have to look at the damn investment bankers," he said. "They're playing with other people's money. The only penalty was a cut in their bonus, not their head."</p>

<p>Jack</a> Welch says U.S. faces "deep downturn": Financial News - Yahoo! Finance</p>

<p>And you want to pass the blame on to some poor schmoe trying to get a house. Shame on you and your soon to out of work friends. Here's aome real culprits that belong in jail--and why did they agree to this--pressure from top WS firms.</p>

<p>Bloomberg.com:</a> Exclusive</p>

<p>See you back here in 2011 Barrons. And yes, the poor schmoes trying to buy houses they couldn't afford but betting on never ending equity growth are largely to blame for the mortgage debacle. </p>

<p>No one who has a deep understanding of ibanking agrees with you. When the best you can do is to quote Guy Hands, there is no real understanding going on. I understand that for whatever reason you want to celebrate your idea of the demise of Wall Street, you are hardly alone! </p>

<p>But when the sensational press goes away and America has a real understanding of why the bailout effects them, when Senators and Congressmen understand that their 15 minutes are over on this subject, then the real information will prevail for those who want it.</p>

<p>"Jack Welch and many other REAL top business people agree with me."</p>

<p>No, buddy; you THINK you agree with them (and what they know ... not to say their agendas). It's quite different. You'll realize it eventually.</p>