The Yuppy-fication of Wall Street By Jack Crooks
One of the problems I've lamented about over the last several years is what I refer to as the Yuppy-fication of Wall Street. Instead of the guys who made it to the top because of their guts, instincts and brains, we are now faced with a world of Ivy-league MBA's with spreadsheets running these institutions.
We have guys who never had to worry about how to feed their kids, or make their mortgage payments or scrape together just enough of their own funds to launch a venture that later failed miserably. Instead we have an incestuous pool of people with powerful contacts populating the upper echelon.
The old-school guys who understood risk viscerally and did all they could to keep overhead at a minimum, knowing there is such a thing as a business cycle, seem to have been either pushed out or retired or runaway from the newly Yuppy-fied world in which we live.
Don't get me wrong. Our Ivy League turns out some very smart people indeed. But they are smart in terms of facts and figures and business case studies. They know strategic planning, have perfected the proper schmoozing with just the right person, and know how to make a spreadsheet sing. They are maestros.
But they never delivered mail in the mail room and grinded their way through every level of the organization, having to prove themselves every step of the way (later being sent to a top school by the company having proved real leadership skills) and learned about the firm's core culture and competencies that drive sustained long-term success in all business environments.
I think this is why we end up with egotistical clowns such as John Thain.
In a just world Mr. Thain would be taken out and beaten within an inch of his life for his arrogance ,incompetence and destruction of other peoples' wealth. Instead he walks away with millions, will likely spend a few years in the wilderness being "rehabilitated" (read friends in high places and journalist rebuilding his reputation with well placed lies at just the right time to polish the image) and re-emerge to "lead" another institution.
Sadly gone are the days when the head guy sat at a trading desk with the troops and lead by example — think John Gutfreund at Solomon.
"Salomon [Brothers] was an institution. The chairman, John Gutfreund, had a desk on the trading floor that he sat at every day. In my nine years at Salomon, I never sat more than twenty feet away from him.
...Here's a guy who is chairman of Salomon Brothers, which in those years was probably the most powerful firm on the Street, while I am a nobody trainee. It has been a year since that first encounter and he has the presence of mind and the interest to set me up like that," as told by Bill Lipschutz to Jack Schwager in The Market Wizards.
I guess a lot of this had to do with the fact that firms on the street were partnerships. The partners had real money on the line so they couldn't afford "social promotions." The key players had to know risk viscerally. Partners needed and hired really smart people with guts and integrity to safeguard their own wealth and grow the firm over the long-run.
Now, clowns like Thain play with other peoples' money. And sadly we see how Yuppy-fication has destroyed our once great trading institutions.
One of the problems I've lamented about over the last several years is what I refer to as the Yuppy-fication of Wall Street. Instead of the guys who made it to the top because of their guts, instincts and brains, we are now faced with a world of Ivy-league MBA's with spreadsheets running these institutions.
We have guys who never had to worry about how to feed their kids, or make their mortgage payments or scrape together just enough of their own funds to launch a venture that later failed miserably. Instead we have an incestuous pool of people with powerful contacts populating the upper echelon.
The old-school guys who understood risk viscerally and did all they could to keep overhead at a minimum, knowing there is such a thing as a business cycle, seem to have been either pushed out or retired or runaway from the newly Yuppy-fied world in which we live.
Don't get me wrong. Our Ivy League turns out some very smart people indeed. But they are smart in terms of facts and figures and business case studies. They know strategic planning, have perfected the proper schmoozing with just the right person, and know how to make a spreadsheet sing. They are maestros.
But they never delivered mail in the mail room and grinded their way through every level of the organization, having to prove themselves every step of the way (later being sent to a top school by the company having proved real leadership skills) and learned about the firm's core culture and competencies that drive sustained long-term success in all business environments.
I think this is why we end up with egotistical clowns such as John Thain.
In a just world Mr. Thain would be taken out and beaten within an inch of his life for his arrogance ,incompetence and destruction of other peoples' wealth. Instead he walks away with millions, will likely spend a few years in the wilderness being "rehabilitated" (read friends in high places and journalist rebuilding his reputation with well placed lies at just the right time to polish the image) and re-emerge to "lead" another institution.
Sadly gone are the days when the head guy sat at a trading desk with the troops and lead by example — think John Gutfreund at Solomon.
"Salomon [Brothers] was an institution. The chairman, John Gutfreund, had a desk on the trading floor that he sat at every day. In my nine years at Salomon, I never sat more than twenty feet away from him.
...Here's a guy who is chairman of Salomon Brothers, which in those years was probably the most powerful firm on the Street, while I am a nobody trainee. It has been a year since that first encounter and he has the presence of mind and the interest to set me up like that," as told by Bill Lipschutz to Jack Schwager in The Market Wizards.
I guess a lot of this had to do with the fact that firms on the street were partnerships. The partners had real money on the line so they couldn't afford "social promotions." The key players had to know risk viscerally. Partners needed and hired really smart people with guts and integrity to safeguard their own wealth and grow the firm over the long-run.
Now, clowns like Thain play with other peoples' money. And sadly we see how Yuppy-fication has destroyed our once great trading institutions.
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