You’ll Rise as Smoke to the Sky

In memoriam, September 11, 2001:

• A Grave in the Clouds

• The Burning Ones

• A Good Death

Twelve years is a long time. And no time at all.

Salaam. Shalom. Peace be with you.


© 2013 The Epicurean Dealmaker. All rights reserved.

I, Fembot

“I think personality is much more important than intelligence, don’t you?”

— Bicentennial Man

I confess freely to you, O Dearest and Most Patient of Understanding Readers, that I have read Margo Epprecht’s Quartz piece “The real reason women are leaving Wall Street” front to back at least three times, and I still cannot discover a coherent answer therein to the article’s title. It is well enough written, with plenty of quotes from concerned characters and an adequate admixture of data and trend analysis to illustrate its principal empirical point: that notwithstanding a constant flow of women entering the industry over the past several decades and achieving some measure of success, it does not seem that many (enough?) stay. Nevertheless, I do not think it is confessing my own lack of sympathy or attention to assert that one searching for reasons for such a situation or even the author’s conclusions in this regard might remain just as nonplussed as I am.

There are allusions to Wall Street’s “hierarchical world” and “a specific culture of men” (whatever the hell that psychological gem, unelaborated and unexplained in the text, is supposed to mean). Ms Epprecht also points to the apotheosis of risk-taking over the past two decades, which, given the accompanying assertion that women shun risk more than their testosterone-addled colleagues, I suppose is intended to be dispositive. Anecdotes are offered of successful women on Wall Street who achieved high rank, power, and good industry reputation only to find, in vague ways left undescribed, that their achievement felt hollow, and the industry just didn’t offer the rewards they were looking for in exchange for their hard work and sacrifice.

Now, Mrs. Dealmaker Mère didn’t raise no fools. Having spent enough decades on this planet to be much closer than many of you to my AARP card, I am well aware that trying to determine what that mythopoetic, monolithic assemblage entitled “Women” wants is not only a mug’s game, guaranteed to relegate one to sleeping in a real or metaphorical doghouse for a week, but also empirically and epistemologically unsound. There is a huge range of capacity, preference, and personality among women—just as there is among men—and even without the personal examples known to me of women who are tougher, more aggressive, and bigger risk takers than the vast majority of men ever could be, I am certain there are more than enough women who would not only thrive but enjoy Wall Street culture without a second thought. By the same token, there must be plenty of smart, driven, and ambitious women who would look under the festering rock that is my industry and dismiss it completely with a judicious and decisive “Eww.” Frankly, the examples Ms Epprecht cites in her article support my prior point. The women she mentions are no cupcakes.

And investment banking is not a giant industry. Surely there are enough ambitious, tough-as-nails women who like money and social prestige sprinkled among the fairer sex to populate the cubicles and corner offices of Wall Street. Women who are not averse to sacrificing family, friends, and relationships—and the bulk of their normal childbearing years¹—for the brass ring at Goldman or Morgan Stanley. Or maybe not. Maybe Wall Street gets all the women who can and want to fit into this culture already. Maybe the suitable portion of the distaff distribution just isn’t that big. Maybe smart, ambitious women have more real or perceived choices than men do, and they realize that investment banking is a tough, uncompromising way to spend your youth and health in exchange for a promise you will make it to the top which is just too uncertain. There is a perspective on my industry that, far from being Elysium, it is actually a pernicious and deadly trap which draws its victims in with unsupportable visions of endless riches and power only to chain them to a gold-plated galley oar. A devotee of this perspective might therefore look upon the relative dearth of women in investment banking and declare, “You go, girl. Smart move.” Perhaps the shortage of women on Wall Street is a good thing, and a marker of their superior judgment and perception.

I will let you decide. Given that this is a discussion about women and Wall Street, I suspect you already have a firmly held opinion.

* * *

Be that as it may, however, I would like to share a couple tidbits of advice inspired by Ms Epprecht’s article for any sharp-toothed woman currently plotting her way to the top of the Wall Street heap.

First, a perceptive reader will notice that many of Ms Epprecht’s examples—including herself, naturally—are of women who made their names and careers on the research side of investment banks. This is true even of the Poster Girl for Women on Wall Street, Sallie Krawcheck, who many fail to remember made her name as a highly respected bank analyst at Sanford Bernstein before Sandy Weill poached her to run Citigroup’s Smith Barney unit after Elliot Spitzer blew up Wall Street’s long-running game of using research analysts to promote clients’ stocks and new underwriting. This is particularly ironic, because the big boom in Wall Street sell-side equity research in the 1980s and 1990s which Ms Epprecht cites as a trend supporting the influx of women was driven by banks’ relentless promotion of equities to retail and institutional investors. The Eighties and Nineties were the zenith of Equity Research on the Street: analysts were never held in higher regard nor better paid than when they were used as the sharp end of the spear for distributing stocks. Analysts like Jack Grubman and Mary Meeker were rock stars, paid just like the investment bankers they helped to win underwriting assignments, and even better known.

But this, as you know, struck many in retrospect (like Mr. Spitzer) as an unacceptable conflict of interest, and the settlement he forced on Wall Street demoted research analysts from front line revenue producers back to the second class citizens they used to be. Once investment banks could no longer use nor pay analysts for winning lucrative business, they stopped paying and promoting them like investment bankers, and their numbers, pay, and prominence dwindled. Add the rise of hedge funds (who tend to disregard sell-side research completely) in the Aughts as Wall Street’s biggest and most lucrative trading partners—displacing large institutional investors like pension funds and mutual fund complexes—and the retreat of individual investors from meaningful participation in the equity market, and equity research departments transformed from profit centers and sales arms back into cost centers. And if there is one place in a sales- and profit-driven institution like an investment bank where the Board and Executive Committee do not look for senior executives, it is in staff divisions and cost centers.² Sallie Krawcheck, ironically enough, made the leap to senior executive management just as (and largely because) the career platform she had risen to prominence on collapsed beneath her.

The rise and fall of female-friendly research departments as profit centers alone might explain the relative paucity of women among top executive ranks in investment banking. This plus the empirical tendency of women in finance to be attracted to other staff departments like legal, compliance, human resources, and information technology, like Ms Epprecht’s other example. Your chances of making it to the executive suite, except as the CFO (the ultimate staff position, held by Krawcheck and Lehman’s Erin Callan, for example) or head of one of the ”softer,” more boring divisions like retail banking or asset management, are materially hurt by building a career in one of your firm’s cost centers rather than a line position in a profit center. Is this fair? Does it make sense? I don’t know, but I guarantee you it is not limited to investment banking.

If you want to make it to the executive suite, don’t try to make yourself “useful” to your firm. Find somewhere where you can make a lot of money.

* * *

Second, the historical success of women in research in the 1980s and 1990s illustrates another point which I feel it is incumbent on me to make here. I will illustrate it with an example provided by Alison Deans (asset management):

As a manager, Deans noticed that one of her best female employees rarely sought her out. The men who reported to her often stopped in to ask about her weekend or to tell stories about business successes. The female employee didn’t take the time to nurture her relationship with her boss. “I realized that I was spending very little time with one of my most effective employees,” relates Deans. “She was so busy getting work done that the only time I saw her was when something got in her way. I started thinking like a male manager: ‘These women are always running in here with their hair on fire and the guys are all good guys.’”

This, in my experience, is all too often how women in my business mishandle the socialization aspect of the job. Ms Deans chose to make a special effort to engage her employee, and the article draws the conclusion that such organizational cultures must be changed to become more inclusive. But let me be blunt: expecting your firm to do this for you is stupid.

If you want to succeed and grow in any business, you have to manage up and sideways as well as down. Doing a great job is simply not enough. Part of succeeding in an organization involves establishing trust, and you cannot do that if you are 100% focused on just doing your job. Ms Deans’ employee was an idiot not to try to engage with her boss on a social level. Call this politics if you will, it is a critical element of career management in any organization: making friends and allies and cultivating networks of friendship, support, and acquaintance. The networking aspect is particularly critical in my business, where building and growing internal and external networks is practically the definition of the job. Research analysts, if they are any good, tend to be good at cultivating external networks among investors and clients, but the job itself—especially now given the new, hermetically isolated regulatory environment—discourages the development of internal networks. Just read Ms Epprecht’s admiring description of Maryann Keller’s workday: it is almost all externally directed.

In fact, equity research is particularly susceptible of supporting the tendency of many women who come to finance to focus on their jobs to the detriment of their careers. Schmoozing, shooting the shit, going to Chipotle with your group for lunch, discussing movies or TV shows or sporting events in the office at 3:00 am while you wait for Presentation Resources to turn that massive underwriting pitch are all indispensable parts of your job, if you want to make it anything but a short-term stint on the way to another industry. Women are not alone in making the mistake of ignoring these career management rules, but in my limited anecdotal experience a much higher percentage of female than male investment bankers tend to be highly intelligent, hyper-serious, relentlessly efficient robots. Perhaps they feel it necessary to behave this way in order to be taken seriously, I don’t know. In many respects they are better potential bankers than the middling-intelligent frat boys, lacrosse players, and oarsmen we seem to default to hiring. But those men often have far better political savvy, and they are naturals at swimming in the high pressure team environment that my business depends on. Nobody wants to work with (or for) a loner.

So keep this advice in mind, my would-be female colleagues and peers: Don’t be a fembot.

It may make you particularly effective at your job, but it also makes you that much easier to unplug.

Related reading:
Margo Epprecht, The real reason women are leaving Wall Street (Quartz, September 5, 2013)
Fingernails that Shine Like Justice (May 21, 2007)
Can’t Buy Me Love (April 29, 2012)
She’s Trading Her MG for a White Chrysler LeBaron (March 2, 2013)


¹ I cite myself:

Another answer may be that the duration, timing, and demands of an investment banking career are simply incompatible with many women’s other important interests. In particular, while an analyst typically has a two- or three-year stint directly after college, after which most are encouraged to leave and get an MBA (and some elect to make the jump into private equity or hedge funds), a woman entering investment banking as an associate after business school can anticipate at least a decade before she can begin to exercise some measure of control over her life. Associates usually start in their mid- to late twenties, spend three to five years before promotion to Vice President, and then spend four to seven years or more getting to Managing Director. All during that time, they work incredibly long hours, travel like maniacs, and basically do not have any personal life to speak of. For many women, this span from their mid-twenties to their mid-thirties coincides with what they envision as the period when they will get married and start a family. While this is true for many men, also, I think most of us can agree that committing to a career in investment banking is a much more fraught and difficult decision for a woman than it is for a man. This stage is also one when junior bankers are not making enough money to make it feasible to hire full time help to care for young children. A female Vice President is certainly physically capable of having a baby while traveling 150 days a year and working upwards of 80 hours per week, but unless her spouse or partner is rolling in dough him- or herself (or willing to stay at home), she simply will not be able to afford to outsource its care.

² The rare exceptions, like Sandy Weill’s designation of in-house lawyer Chuck Prince as his successor at Citigroup, demonstrate the wisdom of this practice. Sales-driven organizations look for leadership among their moneymakers.

© 2013 The Epicurean Dealmaker. All rights reserved.

To Whom It May Concern

“There are two kinds of people who are staying on this beach: those who are dead and those who are going to die. Now let’s get the hell out of here.”

— Col. George A. Taylor

“Sarge, do you think there’s a bullet out there with your name on it?”
“No, Private, but I worry a helluva lot about the bullets with ‘To Whom It May Concern’ written on ’em.”

— Possibly apocryphal

If any big investment bank was foolish enough to hand me control of its new recruit training program, O Dearly Beloved, I think I’d open the “Managing Your Career” portion of the schedule with a screening of the first 27 minutes of Saving Private Ryan. This is the famous extended opening scene depicting the assault on Omaha Beach on the first day of the Normandy invasion in World War II. The scene is so brutal and realistic many D-Day and Vietnam War combat veterans got up and walked out of theaters rather than finish watching it.

Now, notwithstanding the opinion some of you scamps may have of my character, this is not because I’m a sadistic control freak who enjoys pulling power plays on a bunch of dewy-eyed young lads and lasses.¹ Nor is it because I want to equate the challenging but relatively cosseted work lives of a bunch of aspiring members of the socioeconomic elite with the life and death business of flinging young mens’ bodies against bullets, bombs, and shredding metal in pursuit of killing other young men.

No, it is because I think it would behoove most of these eager tyros to understand just what kind of forces are arrayed against them as they attempt to make their way in my business. There is a mythos in investment banking, consciously cultivated by investment banks and believed in no more fervently than by its recent recruits, that my business is a purely meritocratic one. It is how we attract so many of the “best and brightest” to the industry in the first place. It is the mantra we drum into their heads in every recruiting interview, performance review, and compensation discussion: Be smart, aggressive, hardworking, and a team player, and you will succeed beyond the dreams of avarice.

But stated this way, this is bullshit. These traits may arguably² be necessary, but they sure as hell aren’t sufficient.

* * *

Luck—good, bad, indifferent—plays a huge role in anyone’s success in my business. So much of what affects what investment bankers do is beyond our ability to control: the state of the markets, the path of the economy, the success or failure of our clients’ firms compared to their competitors, changes in the regulatory environment, the hiring or firing of personal friends or enemies in decision making roles at clients and potential clients. These are just a few of the boons or impediments which can deliver success far beyond our deserts, or scuttle years worth of unpaid work and preparation in a single afternoon. And this is just business as usual. Forget huge secular tail- or headwinds like the Great Moderation and the Housing Bubble or the Panic of 2008 and the Great Regulatory Unwind we are living through today.³

In both cases, the good and the bad, most of what happens to individual investment bankers can be boiled down to being in the right (or wrong) place at the right (or wrong) time. Over a career spanning more than 20 years, I have seen good and bad bankers alike buoyed far above their proper station by sheer blind good luck or crushed and harried into early retirement by its opposite. There is no sense to it that I can see. It is true that a finely tuned political sense can blunt the bad and accentuate the good, but this skill evolves into one of those necessary traits an investment banker needs as he or she climbs the ladder. It is not sufficient either.

You can see both the naïve belief in meritocracy by one of our members and the gradual realization that perhaps all was not as advertised in paired interviews of the same banker, conducted two months apart, on Joris Luyendijk’s banking blog at The Guardian, here and here. The smug, eager triumphalism of the first interview gives way to resignation and a dawning understanding in the second that his fate was never fully in his own hands. He volunteers a quote which mirrors my metaphor above:

Looking back I may have fallen victim to the self-serving idea that we control our fate; as long as you’re good nothing bad can happen to you, and since nothing bad has happened to me, it must mean I am good and therefore safe; that sort of thing. In the same way military men tell themselves that they can’t die because they don’t make mistakes. But the best soldier can drive over a land mine.

Go back and watch the beginning of Saving Private Ryan if you’re up to it. The fates of all those soldiers maimed and killed on Omaha Beach had virtually nothing to do with their skill, their character, or their perseverance. That is what makes the scene so realistic. And so deeply disturbing.

All the skill in the world won’t save you if your number is up.

* * *

But this is not to say that a career in investment banking is a total crapshoot, or that skill and hard work are meaningless, or even that my silly business looks anything like a wartime charnel house on most days. Like soldiers, investment bankers do need to be highly trained, hard working, aggressive, and persevering. A quick and nimble intelligence helps too. Without those traits, the odds are stacked against you. Just like landing Higgins boats full of fat, out of shape, untrained soldiers on the beaches of Normandy would have resulted in even greater slaughter, you don’t want to go into battle on an IPO or an M&A trade with dim, lazy, unengaged, incurious loners who are going to lower your odds of success. You can’t guarantee deal or career success in my business without some measure of smarts, guts, and tenacity—you can’t guarantee against abject failure, either—but at least you can tilt the odds somewhat more in your favor. Every little bit counts.

I’ve always told my junior bankers they should not worry too much about working on successful deals early in their career. While working on successful deals is always more fun than working on failures, they are not responsible for producing revenues the way someone like me is. That is why most investment banks work very hard to protect their junior bankers from wholesale cuts under most circumstances.⁴ Besides, it is my firm belief that you learn far more about my business and the people in it—clients, counterparties, and colleagues—from observing broken deals than you do from the successful ones. You become a better banker by experiencing and learning how to deal with failure, and the best clients are always looking for the banker who knows what to do when the train jumps the rails.

So, future Jamie Dimons of the world, I’ll give you the same advice I’ve given my Analysts, Associates, and Vice Presidents for years: keep your head down, work hard, and keep your wits about you. If you do get hit, at least you can take pride you did everything in your power to survive and thrive.

And I promise I’ll stand you a drink on the other side.

If anyone’s gonna catch a bullet, it’s most likely gonna be me.


Related reading:
Joris Luyendijk, Happy banker: ‘There's something narcotic about landing a big deal’ (The Guardian, July 19, 2013)
Joris Luyendijk, Happy banker, post-redundancy: ‘I still don’t think investment banking is a terrible environment’ (The Guardian, July 19, 2013)
Overheard at 85 Broad Street (June 18, 2008)
Go Ahead, Live a Little (May 12, 2013)


Photo credit: Saving Private Ryan.
¹ Although that could be a useful ancillary effect.
² The recent articles on investment banks hiring the idiot sons and daughters of powerful clients and potential clients is only the most recent proof that such an argument has always been counterbalanced by other considerations, at least in a minority of cases.
³ Or the elevation of friends or enemies into positions of power at your own firm. That’ll help or hurt you more than anything most of the time.
⁴ The exceptions to this, while generally execrable, usually only happen when industry or firm conditions are particularly dire.

© 2013 The Epicurean Dealmaker. All rights reserved.

10 Reasons I’m Not Posting Anymore

1) I’m bored. — Nothing remotely interesting is happening in the world of finance to prompt my poison pen. Tapering? SEC and DOJ prosecutions of financial crimes? Jewelry thefts from billionaire tenements? Please.

2) Nobody has emailed me recently with any clever ideas to steal. — This usually reliable source of notions I can appropriate as my own and dazzle the assembled masses has dried up miserably. What’s the problem? Have you people gotten stingy on me or something?

3) Those items of finance news which are “happening” in the world are way above my pay grade. — Monetary policy? Insider trading jurisprudence? Vera Wang’s bracelet collection? I have trouble remembering to button my suit pants before I zip them. Give me something simple, like Jamie Dimon’s hat size. Or epistemology.

4) Nobody’s offered me a book deal. — What? You thought I wrote this shit out of the goodness of my heart?

5) I’m lazy. — So what? It’s summer. Give me a fucking break. None of my clients bothers to get into the office before eleven, either. (That’s if they’re not sipping mojitos on the deck of their beach houses by then.)

6) I’m busy. — Trying to get various clients and counterparties to shit or get off the pot already. I’m only writing this because I have nothing to do for the next 20 minutes but wait for a return phone call. Lots of hurry up and wait in my business.

7) I can’t figure out how to make slideshow listicles. — Anyway, the last two times I made a listicle you clowns only read one of them. Ungrateful wretches. I like pageviews, too.

8) I’ve already said everything I have to say. — About fifty billion times, too. Even I bore me.

9) Uh... I forget. — What? You expect an investment banker to know how to count? Or not overpromise and under deliver? Hahahahahaha. Silly rabbits.

See you in September. Maybe.<sup>1


1</sup> No, no footnotes for you today. Go away.

© 2013 The Epicurean Dealmaker. All rights reserved.

Gone Fishin’

No, not really.

I just thought I’d let faithful followers of this blog know that I’m not dead, and don’t expect to be anytime soon. But I really do have nothing to say on this site, for various reasons.

I mean, I’m sure if I reinserted a splintery pole up my ass or stuck my moistened fingers in an electrical socket I could get myself worked up about all sorts of ridiculous nonsense taking place every day in the news, but I’ve never admired or aspired to the life of an intellectual mayfly. And nobody ever listens to my constructive criticisms about financial regulation, educational reform, or the price of pig feet in China anyway.

Not that they should, of course. Free advice is always worth what you pay for it.

But for the nonce I’ve gotten tired of the under-appreciated labor of love that is this cut rate opinion emporium. So I’m just gonna sip an umbrella drink on a hammock under a coconut tree on this little atoll and wallow in my bloggy desuetude.

If you feel compelled to get in touch with me, feel free to leave a message after the beep. I never check them anyway.


© 2013 The Epicurean Dealmaker. All rights reserved.