Myths of Wall St glamour

22 May 2012
William D Cohan

Ever since March, when The New York Times decided to make a cause celebre out of the resignation of Mr Greg Smith, a vice-president at Goldman Sachs Group, a cottage industry of first-person Wall Street departure stories has sprung up across the print media and blogosphere.

For instance, The Guardian in London has run a series of 60 columns - titled "Voices of Finance" - that give current and former Wall Street bankers and traders a chance to anonymously describe what their jobs are really like or why they decided to leave.

One London-based equity derivatives salesman, who had a job similar to Mr Smith's but not at Goldman Sachs, wrote on the Guardian blog that doing the right thing on Wall Street is a directive that must come from the top.

"For me," he wrote, "it goes back to the values in an organisation. If you could sell your product for double the price, would you do it? I would say, in business, that's legitimate, provided your clients have adequate information."

He continued: "This is an important rule with structured derivatives that clients ignore at their peril. You have got to read the small print. You need to bring in a lawyer who explains it to you before you buy these things - otherwise there is information asymmetry."

These anonymous postings are valuable insomuch as they give a reader a healthy dose of the flavour of what it is like to work on Wall Street. But they can't hold a candle to a full-throated, no-holds-barred repudiation of an industry that is expert at seducing the world's best and brightest with promises of glamour and riches.

BANKING'S BLACK HOLE

Such is the power of the prose of former banker Stephen Ridley, who survived as a junior investment banker at a "top tier" European investment bank for all of 16 months before throwing in the towel on his finance career in October last year.

Having since been reconstituted as a singer/songwriter and pianist - and a damn fine one at that - in the mould of Coldplay's Chris Martin, Mr Ridley decided last month to go public with his tale of investment-banking woe. He tells a powerful story that anyone considering a Wall Street career would do well to read before falling into the investment-banking black hole.

Mr Ridley writes that he graduated from a top British university - he doesn't say which one - in 2010 with a degree in philosophy, politics and economics. The summer before graduation, he interned in the "European" bank he joined a year later (despite knowing first-hand from his internship just how "brutal" the life of an investment banker was).

His sole motivation was to make as much money as possible. He assumed having a lot of money would make him happy and earn him the respect of the people around him.

"I wanted to be a somebody in the eyes of myself and others," he wrote on the blog Wall Street Oasis. "But most of all, I wanted money. Why? Because money is freedom. Money means I can wear what I want, live where I want, go where I want, eat what I want, be who I want. Money would make me happy. Right?"

Wrong.

Mr Ridley explains: "In fact, money didn't seem to make any of the bankers happy. Not one person in the roughly 200 I got to know in banking were happy. Yet all earned multiples of the national average salary."

He then explained why he was so unhappy.

"Like everyone there, I worked my ass to the bone, working mind-numbingly boring work," he continued. "Fifteen-hour days were a minimum, 16 to 17 were normal, 20-plus were frequent and once or twice a month there would be the dreaded all-nighter. I worked around two out of every four weekends in some form. I was never free, I always had my Blackberry with me, and thus I could never truly detach myself from the job."

JUST STAYING AWAKE
What about the perks, the lavish lifestyle?
"These are the objective facts, contrary to what any 'baller' wants to tell you," writes Mr Ridley. "The only models were Excel models, the only bottles were Coca-Cola, which I drank a lot of to stay awake."

Once he realised that he was happier "backpacking around South America on a shoestring" than he was in the supposedly glamorous world of investment banking, he gave it up to pursue his passion for singing.

Given the shrinking investment-banking pie and dramatic changes to the way the industry is going to be regulated, we have come to an important, paradigm-shifting moment for Wall Street.
As Mr Ridley, and many others, have discovered, Wall Street is no longer a fun - or necessarily lucrative - place to work.

And guess what? This is the best news to come around in a generation. Now, instead of being sucked into Wall Street by default or after digesting a fantasy about fame and untold riches, maybe our best and brightest graduates will pursue their passions. If they do, we will all be better off.

As Mr Ridley says: "Life is short - you're young, you're old, you're dead. React to that knowledge. You have nothing to lose!" BLOOMBERG

William D Cohan, a former investment banker and the author of Money and Power: How Goldman Sachs Came to Rule the World, is a Bloomberg View columnist.