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Тема: Good news: market slowly seems to be getting better.
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| Автор:
254423512451245
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Дата: 01.07.03
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Bankers signal an end to the bear market
By Charles Pretzlik, Lina Saigol and David Wells
Published: June 29 2003 19:04 | Last Updated: June 29 2003 19:04
It may be too late to save the holiday homes of investment bankers who have already lost their jobs, but suddenly life is looking up on Wall Street and in the City of London.
This month, hundreds more bankers on both sides of the Atlantic - from UBS, Morgan Stanley, Citigroup and elsewhere - joined the tens of thousands in their industry who have been made redundant over the past three years.
Others are leaving voluntarily, disillusioned by the sharp drop in pay, office infighting and pressure to turn up scraps of business.
Bankers optimistic on M&A
Investment bankers remain optimistic of a recovery in mergers and acquisitions despite seeing the sixth consecutive half-yearly drop in global activity.
Go there
They even have a new pin-up: Steven Horkulak, 39, the former Cantor Fitzgerald derivatives trader. He claimed in the British high court this month to have been driven to drink and cocaine by the foul-mouthed bullying of his boss.
Yet, if this feels about as bad as it can get, it could be because it is. Privately in the past few weeks, Morgan Stanley executives have been briefing their investment bankers that they have reached the "inflexion point".
After three years of declining equity markets in which the flow of initial public offerings (IPOs) and takeovers has slowed to a trickle, they believe the worst may at last be over.
They have called the bottom of the market.
They are not quite the first. Last month, Peter Wuffli, chief executive of UBS, said there were signals that "smell like the end of the bear market".
He seemed, then, to be out of step with his peers. Today, they are all falling in behind him.
Buyers become more selective about IPOs
Markets are recovering, volatility is down and the geopolitical situation is calmer, so capital markets are a lot less gloomy. But we are not out of the woods yet.
Go there
Addressing guests at a party in the Royal Exchange, London, last week, Stephan Newhouse, chairman of Morgan Stanley International, said: "There's always the possibility of a dead cat bounce, but we feel better about things and business is improving."
He is in good company. Hank Paulson, the chairman and chief executive of Goldman Sachs, said: "Although we have yet to see sustained evidence of an economic recovery, stronger recent performance in the capital markets and improved investor sentiment have created a more optimistic outlook for our business."
It is a measure of his optimism that Goldman more than doubled its dividend from 12 cents a share to 25 cents in the second quarter.
At Lehman Brothers, Mark Shafir, global head of mergers and acquisitions, said that "no-one is doing cartwheels down Broadway" but "people are feeling a lot better. It does appear to me that this perfect storm is behind us".
Junk bonds see jump in demand
Junk bonds are back in style. Not since the US economy's heyday in the late 1990s has there been so much demand for high-yield debt securities, prompting a surge in issuance.
Go there
His counterparts at UBS, Merrill Lynch, Citigroup and JP Morgan all say similar things. The main reason is simple: the equity markets have stabilised.
In the UK, the FTSE 100 index of leading stocks has just turned in its best quarterly performance since the beginning of the dotcom boom. It has risen by 12.5 per cent in the second quarter, wiping out first-quarter losses and leaving it up almost 4 per cent this year.
It is similar in the US. The Dow Jones Industrial Average is up 7.8 per cent this year; the S&P 500 11 per cent and the Nasdaq 22 per cent.
Even if strategists fear such a rally is not sustainable, bankers are growing increasingly confident that the combination of low interest rates and the end of war in Iraq has at least brought some stability back to the equity markets. This is essential for both the IPO and the merger and acquisitions businesses.
Without stable and credible valuations, company boards are reluctant to sell their own stock or buy other people's.
Record quarter for convertible bond deals
Demand for the securities, known as convertible bonds, has surged this year. The second quarter was the most active three months ever in the US, with 115 issues valued at $41.35bn sold.
Go there
This explains why Merrill Lynch shares have risen 46 per cent since the rally got under way in mid-March, outperforming the S&P 500 by almost 20 per cent. Goldman has outperformed the market by almost 10 per cent and Morgan Stanley by more than 6 per cent.
But will investment banks now re-hire the people they have forced out, as Merrill notoriously did in 1998?
A report by the Centre of Economics and Business Research, expected to be published this week, predicts City jobs will stabilise at the current level of 290,000 and could rise to 302,000 over the next two years. It estimates the job losses over the past two years at 35,500 jobs.
Privately, some executives believe a rally now would come too soon for an investment banking industry still suffering fr om overcapacity.
But the biggest reason for tempering the optimism is that even if business does pick up this year, there is no longer enough time for it significantly to boost 2003 earnings. And that bodes ill for bonuses.
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Тема: China rocks
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| Автор:
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Дата: 01.08.03
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The Fed is in a dangerous game with China
By Chen Zhao
Published: July 30 2003 20:50 | Last Updated: July 30 2003 20:50
The Federal Reserve is taking no half measures in its efforts to stimulate economic recovery in the US. To ward off the spectre of deflation, it is prepared to generate inflation and reflate the asset bubble.
China is a silent but active partner in the Fed's pump-priming. It would not be possible for US Treasury bond yields to be at current levels were China not a willing and able supplier of savings to the US. Combined annual purchases of Treasury securities from China and Hong Kong have reached $290bn - more than those by any other creditor nation. Both China and the US are having fun at this game. The flow of Chinese savings has enabled Americans to borrow more and spend more. Long-term bond yields are still very low, in spite of the recent bond market shake-out. The refinancing boom continues. The collapse in borrowing costs is reviving capital spending.
China is glad to see Americans going on another shopping spree. Its factories are cranking up production at an unprecedented pace and capacity is tightening. China's exports to the US jumped 35 per cent in the first quarter compared with the first quarter of last year and the trend is accelerating. The US's bilateral trade deficit with China has reached $110bn, bigger than with any other country.
In effect, China is trading goods for US paper. The rapid accumulation of Chinese reserves means the Chinese are buying dollars to keep their own currency steady. This has allowed US interest rates to remain low, which in turn has encouraged American consumers to buy more Chinese goods.
This game of "trading goods for paper" creates a hyper-stimulative environment for both countries' economies - which authorities on both sides of the Pacific want. The Chinese and US currencies are falling against the euro, money supply in both economies is going up and interest rates are low. All of these are powerful stimulants for economic growth and share prices.
So far there are no signs that the Chinese are about to change course. Despite intensifying calls to revalue the currency, the authorities recently increased the value added tax rebate for exporters. The rebate amounts to a de facto devaluation aimed at providing pre-emptive protection against a growing number of anti-dumping investigations of Chinese exports. This action suggests that it is naive to think the central bank will soon allow the currency to float upwards.
Nevertheless, trading goods for paper works only up to a point. While the game serves the purposes of Chinese and US policymakers alike, it also creates enormous economic and financial distortions that are both self-limiting and self-defeating.
With a collapse in interest rates fuelling consumer spending, it is conceivable that the US current account deficit will explode upwards. There is no magic number the current account deficit must reach to signal an impending crisis - but there has never been a nation that has been able to increase its reliance on foreign savings without eventually hitting a brick wall.
In the meantime, China will accumulate inflationary pressure. Its economy has been booming for some time and foreign exchange intervention has further fuelled money and credit expansion. China has already climbed out of deflation, with its consumer price index rising at an annualised rate of 1 per cent. Granted, this is a very low inflation rate. Still, with soaring money supply, surging exports, expanding reserves, strengthening consumer spending and fast growth in property investment, inflation will keep rising.
When will the party come to an end? When the Chinese have had enough. That will happen when inflation in China approaches 3-4 per cent - which it could do within the next six months or so. At that point, the central bank will be forced to revalue the currency.
Another potentially vicious shakeout in Treasury prices could be the biggest implication of such a move. Revaluation would be deflationary for China but inflationary for the US. Whether the Chinese economy could withstand a higher exchange rate remains to be seen. But revaluation would definitely help the Fed achieve higher inflation.
A further surge in bond yields could mark the start of the long-foreseen demise of US consumer spending and damage the US economy. This will probably be the moment when investors find out whether the game is a boon for the world economy, or a bane that merely defers another recession and bear market in stocks.
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Тема: Russia on the Edge of Unemployment Disaster
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| Автор:
87608760876
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Дата: 02.03.03
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Russia on the Edge of Unemployment Disaster
The government presents joyful reports, although the situation gets critical
The Russian Federation State Statistics Committee informs about the reduction of the unemployment level in Russia. As it turns out, the unemployment situation in the country improves. Official documents say so, at least. Nevertheless, the major social department of the government – the Ministry for Labor – projects a considerable growth of unemployment in the nearest future. Power industry reforms, public utilities reforms, railway and metallurgy reforms will deprive hundreds of thousands (if not millions) of Russian people of their jobs. The state has nothing to offer to all those people, who suffer from the stabilization and from the moderate economic growth. There are a lot of doubts about the fact, if there is someone, who is interested in the fates of those people at all. Yet, the State Statistics Committee of Russia keeps providing its joyful calculations.
According to the report from the State Statistics Committee, only 21.6% of Russian people had their income lower than the official living wage during the last quarter of the last year. The official living wage is 1.893 rubles a month, which is a bit more than $50. There were 31.5% of such people in the beginning of 2002. That is why, the Ministry for Labor can report that the number of poor people in Russia reduced by 14.2 million people. The ministry hopes that this index will be an advantage of its work.
By the way, according to the official statistics, the level of hidden unemployment dropped almost 2.7 times over the recent two years. The officials of the Ministry for Labor believe that 92.6-92.8% of the economically active population of the country will have jobs by the year 2005. Although, this assertion contradicts to the forecasts of the same ministry. Various departments of the ministry have probably failed to coordinate their data.
Alexander Pochinok, the incumbent Minister for Labor, promised two years ago that the official number of the poor would be reduced to the level of 17-18 million people by the middle of 2003. However, as the dynamics of the statistic information shows, Pochinok’s words remained only words. The minister failed to work a miracle. The number of the Russian people, whose level of income is lower than the living wage, does not have a tendency for reduction: 31 million people in the first quarter of 2001 and 30.9 million in the beginning of the year 2003. Their number is supposed to grow in the percentage ratio: the State Statistics Committee registered that the Russian population considerably reduced in its number over the last two years.
Ministerial departments often forget to coordinate their data. Last year the State Statistics Committee informed that up to 40 million Russian people suffer from undernourishment on a regular basis. It is obvious at present that the number of hungry people is going to increase in the nearest future.
The Ministry for Labor forecasts nowadays that the registered unemployment level in Russia is likely to grow to 1.5 million people in the coming three years. Metallurgy, railway transport and power industries will provide the basic growth of the unemployment. Ministerial officials forget to mention the coal industry for some reason: oligarchs are about to complete its unification. Officials do not take account of the coming reform in the field of public utilities either.
In connection with the reform of the metallurgical industry, about 150 thousand people will become unemployed, as the specialists of the Ministry for Labor think. Two hundred and thirty-eight thousand people are expected to be fired as a result of the railway transport reform. The power industry reform is to result in the unemployment of 61 thousand people at least. Furthermore, the ministry acknowledges that the number of illegal labor migrators (about three million people) doubles the official number of the unemployed people in the country.
It goes without saying that no population employment departments (not to mention small business or shadow economy) will be able to cope with such a huge mass of people. All those things will eventually result in the fact that the human labor price will drop considerably in Russia as a whole. The employment demand will exceed the unbalanced supply several times. Hundreds of thousands of people will remain unemployed, homeless and hungry.
Does anyone in the Russian government calculated such a development of the social situation? Does anyone at the presidential administration think about who those people are going to vote for at the election? Do Kremlin politicians hope that the worst is going to happen after the parliamentary and the presidential elections? It is hard to answer these questions. The government does not say anything on the subject, while oligarchs keep brushing such questions aside.
On the other hand, Russian large companies come to the realization of the fact that the bitter situation needs to be improved at least a little bit. The Siberian Coal Energetic Company, which got hold of Siberian coal fields, gets rid of the excessive personnel at the moment. This is a logical way for market relations development in Russia: no charity at all. A company will keep only those people, whose labor brings the maximum profit to the company (at the minimum spending, of course). So, the company decided to set up the special stabilization foundation. As the official press release of the company mentioned, the funds of the foundation would help the dismissed people to survive the hard consequences of their dismissal. So-called excessive people will be able to obtain new professions at regional schools. In addition to that, the company launches a program to assist the economic employment of the Krasnoyarsk region. The company is going to offer certain loans to those people, who will wish to start their own businesses after they are fired. Most likely, those loans will go not to the fired people, but to the children and relatives of the company’s managers. On the other hand, an oligarchic company is doing something for its workers, trying to observe some decencies, at least verbally.
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Тема: Reuters on outsourcing
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| Автор:
Reuters
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Дата: 02.05.03
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NEW YORK, May 1 (Reuters) - Wall Street research analysts have
suffered rounds of layoffs, big pay cuts, and accusations that they routinely
lied to the investing public. Now there's a new worry -- that their
jobs are being shipped overseas.
Investment banks like Morgan Stanley , Goldman Sachs Group
and Citigroup Inc. are mulling the benefits of shipping
research jobs to countries like India, where salaries for business
graduates are as little as 10 percent of those in New York and London,
according to financial consultants and Wall Street sources.
Morgan Stanley plans to experiment by hiring stock analysts in India
to support its U.S. and European analysts, while Deutsche Bank AG
has contracted Irevna Limited, a London-based consultancy that
specializes in outsourcing research to India, according to sources
familiar with the situation.
Last week, J.P. Morgan Chase & Co. said it will hire 40
junior stock analysts and other research staffers in its Bombay office this
year as a way to expand research in a weak market.
"Every bank on Wall Street will eventually use the cost benefits
offshore to maintain their research businesses," said one executive at a
major investment bank.
Financial services consultants and banking executives say that
offshore operations are part of broader efforts to bankroll research
departments in the face of shrinking revenue from equities underwriting and
trading businesses and a tighter regulatory environment.
SOPHISTICATED RESEARCH
For now, the idea is for offshore analysts to collect data, do basic
number crunching and create finance models, while production tasks like
editing can also be moved abroad. The aim is to inexpensively provide
support for more senior analysts, who would have more time to finish
research reports and meet clients.
In time though, offshore hires could translate into fewer research
posts in the United States and Europe. Once the operations are up and
running, it will be a natural progression to shift more complicated tasks
abroad, say financial services consultants.
Wall Street is looking to examples such as General Electric Co.
, which shifted software development and back office jobs to India
under former Chief Executive Jack Welch. Today, Indian engineers are
contracted for tasks as sophisticated as analyzing the materials and design
of new jet engines.
In the research world, consulting firms are leading the way. Firms
such as McKinsey & Co. and A.T. Kearney Inc. have shifted the bulk of
their research divisions to such places as Bombay and Chennai, India,
keeping U.S. and European offices staffed mainly with division heads who
need to have regular contact with clients.
"If GE can do the advanced research over there on its next
generation of jet engines, then there's no reason why that can't be the same
case for financial institutions," said Stefan Spohr, a principle in
Kearney's financial services division.
The potential opportunities have given rise to a cottage industry of
consultants with Indian connections. Fast-growing firms like Office
Tiger, Smart Analyst Inc. and Irevna help to provide third-party research
out of India.
Spokespersons at Merrill Lynch , which has been outsourcing
technology services to India for three years, and Citigroup, which has
offshore operation in India for its commercial bank, said there are
currently no offshore research initiatives.
A spokesman for Goldman Sachs also said it had no plans to hire
offshore analysts. Spokeswomen at Deutsche Bank and Morgan Stanley had no
comment.
MASSIVE RELOCATION
A report recently completed by Kearney shows that the idea of
relocating jobs has taken hold.
U.S. banks, brokerages, mutual companies and other financial
services companies are planning to relocate 500,000 jobs offshore, or 8
percent of their work force, over the next five years.
So far, research accounts for a small fraction of that, but Andrea
Bierce, an A.T. Kearney managing director who oversaw the study, said
that financial analysis and research is fast becoming an offshore
favorite.
In a Kearney poll, executives were asked which business processes
were being shifted abroad. The No. 2 answer was analytical and technical
services.
"If it can be done by sitting at a desk in front of a computer, then
it can be done abroad," said Bierce.
Shifting services offshore is not without its risks. Some executives
have complained that communications with home offices and cultural
differences have led to inefficiencies, said consultants.
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Тема: More 'Can I Help You?' Jobs Migrate From U.S. to India
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| Автор:
пппппп
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Дата: 12.05.03
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More 'Can I Help You?' Jobs Migrate From U.S. to India
May 11, 2003
By AMY WALDMAN
BOMBAY - In the early morning hours of May 1, American
welfare recipients reached for their phones, dialing
toll-free to check on their next infusion of funds.
On a steamy Indian late afternoon in her air-conditioned
cubicle here, Manisha Martin was waiting for them.
Without a break, the display panel on her phone lit up.
Kansas calling. Arizona. Alabama. Tennessee.
"Hi, this is Megan," she said to each caller. "How can I
help you?"
In mostly southern drawls she had once struggled to
understand, they asked about the balances on their
electronic benefit cards, which work much like those used
at A.T.M.'s. "Your food stamp balance is 48 cents," she
told one caller.
She activated new cards, or told callers to speak to their
caseworker. If they unleashed angry tirades, she tried to
understand. When young single mothers cried, she listened.
Her accent, pleasant and neutral, was hard to place. When
callers asked her location, she demurred. If they knew
where she was, said Ms. Martin, 27, "they would drop off
their seat."
Some New Jersey officials say they just about did that when
they learned that a contractor had arranged for Bombay
operators to handle calls from the state's welfare
recipients. County welfare directors complained. A state
legislator, Shirley Turner, proposed a bill requiring that
workers hired under state contracts be American citizens or
legal aliens, or fill a specialty niche Americans could
not, prompting at least four other states to consider
similar bills.
Much as the exodus of manufacturing jobs abroad did in
decades past, sending service or knowledge-intensive jobs
to countries like India is causing fears of displacement in
the United States and elsewhere.
A study by Forrester Research of Cambridge, Mass.,
estimated that this type of labor migration, generally
referred to as outsourcing if contracted to another
company, or offshoring if run by a company itself, could
send 3.3 million American jobs overseas by 2015. India,
with its large pool of English-speakers and more than two
million college graduates every year, is expected to get 70
percent of them.
American companies say a weak economy is pushing them to
find new ways to cut costs. American workers say the same
economy is the reason they need the jobs to stay home.
"There is a feeling of unease," said Kiran Karnik, the
president of India's National Association of Software and
Service Companies. "Unless the U.S. economy picks up
there's going to be a continuing issue about job loss, and
also migration."
Ultimately, Ms. Martin's company, the eFunds Corporation,
based in Scottsdale, Ariz., reached an agreement with New
Jersey's Department of Human Services to move the work to
the state. It created 12 jobs in New Jersey - at an
additional cost to the state of $1.2 million until the
contract ends in August 2004.
"For us it was about the consistency of the message," said
Andy Williams, a department spokesman. The department is
telling welfare recipients that they have to work or try
to, he noted, "so to have a contract where you're exporting
service-sector jobs - it just seemed we were working
against our clients' interests."
But few corporations will make similar accommodations.
"Even though the government of New Jersey doesn't want to
manage costs, companies do," observed Pradeep Saxena, the
president of eFunds International.
American companies are using Indian labor - often working
around the clock - to do research and development, prepare
tax returns, evaluate health insurance claims, transcribe
doctors' medical notes, analyze financial data, dun for
overdue bills, read CAT scans, create presentations for
Manhattan investment banks and much more.
Seeking both to increase senior analysts' productivity and
to lower costs, J. P. Morgan Chase & Company is planning to
hire 40 junior analysts and support staff in Bombay to set
up an equity research department there. It also plans to
increase the several hundred employees doing back-office
work at its Technopolis office park in Bombay to 1,100 by
the end of the year.
Delta Air Lines has contracted two Indian companies to
handle some of its customer reservations, the first airline
to make such an arrangement. "The main reason is to save us
money," $12 million over the next two years, said Catherine
Stengel, a spokeswoman for the airline, although she added
that allowing Indians to handle simpler reservations would
also free American agents for more complex calls.
The move had not prompted any layoffs, she added, although
a company news release announcing the arrangement said it
would not affect domestic employment "at this time."
The Bombay operations of eFunds include selling thousands
of products to American infomercial viewers, back-office
work for a British telecom company, and providing
customers' bounced-check records to American retailers. It
provides customer service help to welfare and food-stamp
recipients in 19 American states, using agents who - said
Dinesh Bhatia, the head of eFunds sales in India - "are
trained in empathy."
Ms. Martin and others like her earn just over $200 a month,
less than the American welfare recipients receive but well
over the $500 per capita annual income in India. For more
challenging jobs, the savings to the American companies are
even greater.
Despite the New Jersey bill, the threat is less legal than
political. "You can't really outlaw outsourcing," said
Jagdish N. Bhagwati, a professor of economics and political
science at Columbia University. "Outsourcing is just
trade."
But American unions, particularly the Communications
Workers of America, have begun a campaign against the
practice. When high-tech offshoring began, said Marcus
Courtney, the president of the Washington Alliance of
Technology Workers, he and others thought it would be
confined to technical support. "People never imagined you
would literally be able to export the entire production
process overseas," he said.
Similar protests have come from the Communication Workers
Union in Britain against the British Telecom Group's deal
with an Indian software technology company.
At the same time, in the face of rising unemployment in the
West, resistance has also grown to importing high-tech
professionals from India. In the short term, that may
actually prompt moving more work to India to reduce public
resentment.
But over time, Professor Bhagwati predicts, visa
restrictions may actually loosen as countries decide it is
preferable to have foreigners come in to work rather than
see jobs migrate abroad. Either way, the movement of work
and labor in both directions is likely to continue.
"We don't see the competitive pressures declining, so the
notion of being able to cut costs and get quality is only
going to grow," said Vivek Paul, the chief executive of the
software company Wipro Technologies.
Executives in India, which was long fearful of opening its
economy, are now lecturing Americans about the virtues of
free trade and contending that visa restrictions
effectively constitute trade barriers. "If it takes six
months to process a visa, it's like making a fruit shipment
sit for six months," said Mr. Karnik of the National
Association of Software and Service Companies.
But in the end, the most effective pressure will come from
the companies that benefit.
Doing a tax return in India brings savings as high as 50
percent, said Kishore H. Mirchandani, president of
Outsource Partners International, which has its
headquarters in New York but had about 10,000 American tax
returns prepared in Bangalore, India, this year.
To ease security concerns, he said, the Indian accountants
have no e-mail, Internet or printer access, or even pens
and papers at their work stations to prevent copying data.
More American companies, like American Express, are
setting up their own processing centers in India. Some are
finding that with lower labor costs they can afford to
chase smaller outstanding payments.
The presence of these American operations here is driving
salaries up. Still, attrition remains far lower in India
than in the United States, where the jobs, aspirational
here, are often seen as dead-end.
EFunds' call centers are in a new suburban development
called Mind Space that houses only "knowledge intensive"
companies. It is already home to eight call centers, with
more on the way. Chattering young people are everywhere.
In an eFunds classroom, eager new employees learn to
pronounce both R's in Mastercard, what a frat party is,
what a Wal-Mart looks like - preparation for interacting
with far-flung customers. On the board, the instructor has
written, with the second syllable underlined: A-me-ri-ca.
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Тема: No internship? You can still get into investment banking
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| Автор:
Sarah Butcher
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Дата: 04.04.03
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No internship? You can still get into investment banking
Sarah Butcher
3 Apr 2003
It's the time of year when hope is beginning to fade: If you haven't been offered a summer internship in an investment bank already, there's little chance of being offered one in the weeks to come.
It's the time of year when hope is beginning to fade: If you haven't been offered a summer internship in an investment bank already, there's little chance of being offered one in the weeks to come.
The deadline for most internship applications is late January; interviews usually end in February and offers are often made by the beginning of March.
Does failure to get an internship matter? The answer is yes, though how much depends on the bank you are applying to. At Merrill Lynch, for example, summer interns from 2001 filled every graduate vacancy at the bank in 2002. It is thought likely that summer interns from 2003 will again occupy all the places in 2004.
However, at JP Morgan interns filled only 50% of vacancies in 2002. The head of graduate recruitment at another US bank said: 'We take twice as many graduates as interns. It's still worth applying for a full time position if you don't secure an internship.' Failing to get an internship can be disheartening. But graduate recruiters from most banks agree that failure to secure a place need not dissuade candidates from applying for full-time positions the following year.
Naomi Billings, head of graduate marketing at Goldman Sachs, said: 'We encourage people to apply, even if they've been turned down (for an internship).'
Sarah Watson, head of graduate recruitment at UBS Warburg, was equally encouraging: 'It's fine to apply. In a year your skillset can be greatly enhanced.'
In truth, however, much depends on the reason why you were rejected. Candidates deselected because of poor exam results, or because they failed numerical reasoning tests, are likely to be rejected again.
The head of graduate recruitment at one bank said: 'If you've got 3 C's at A level, or if you crash and burn at the initial screening tests, you are not going to get much better in the next 8 or 9 months.'
The problem for many applicants is that they simply do not know why they were turned down. Most banks do not elaborate on their motives for rejecting the candidates who did not make it to interview.
Jochen Kunzel, a German student who has been accepted for an internship at JP Morgan, was rejected by other firms solely on the basis of his application form.
'I am usually someone whose application looks interesting: I've spent 50% of my time outside Germany and have good linguistic, technical and academic skills. It can be hard to build a picture of the reasons why you were turned down.'
Students rejected after an interview may find recruiters more forthcoming. Goldman Sachs, for example, provides feedback to interviewed candidates. 'A lot of students are not very well prepared for the interview, or are very, very nervous,' said Billings.
A US bank rejected Ross McCormick, a natural sciences student at Cambridge University, because he did not have the 'same energy' as rivals.
He attributed this to poor interview technique: 'I'm a member of the finance club and did loads of research, but I haven't had much interview practice and I didn't come across as well as I could have.'
Fortunately interview technique, poor knowledge of the industry or lack of work experience can all be remedied in time for a second try.
Karen McKinley, head of graduate recruitment at the Royal Bank of Scotland said: 'People who don't get an internship offer should continue to research the industry and gather as many experiences as possible.'
She advised that students attend inter-bank open evenings, which are held in the summer and advertised on banks' own recruitment websites.
Nan Shen, a second year economist at King's College, Cambridge, is among those planning to conduct more thorough research before applying for full time positions.
'I applied for internships in investment banking. Next year I'm going to look at fixed income. Equity markets are down, but the fixed income market is healthy and there should be more opportunities there.'
Work experience is perhaps the best way to embellish a CV, however. One graduate recruiter said: 'Students with some form of work experience are more appealing than those without.' Investment banking experience is best, but without an internship something is better than nothing.
Another recruiter advised: 'Any form of work is more constructive than bumming round Europe for the summer.'
Students without a banking internship are particularly advised to apply for summer finance positions with other blue chip organisations.
Kunzel spent a prior summer in the finance department at IBM. He said this enhanced his application to investment banks.
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Тема: How Much Am I Worth: European equities trader
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| Автор:
gg
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Дата: 04.12.03
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How Much Am I Worth: European equities trader, Frankfurt
Justin Keay
2 Dec 2003
A panel of specialist headhunters give their assessment of typical pay packages: European equities trader, Frankfurt - salary €70,000-€120,000 ($84,000-$144,000); bonus 100% at best for most; up to 400% for those with good relationships
In the 1970s, it was feared that in future machines would make many of us redundant: whether you were a lawyer, accountant or technician, a big shiny computer would somehow be able to do the job better, faster and cheaper. Time has proved this to be a fallacy for most of us. For vanilla equities traders however, the nightmare is very real. Programme trading, which has no need for them, is becoming more popular. So is e-trading, where banks' clients take control of trades themselves.
These trends are underway everywhere, but Frankfurt has suffered particularly badly as economic stagnation has kept volumes low and prices subdued.
Simon Vaughan-Edwards, head of the equities team at Alexander Mann Global Markets (AMGM), says: 'The growth of e-trading in financial centres such as Frankfurt threatens to make many traders redundant.'
Many banks have let traders go this year: even top-notch staff have been cut, with management viewing them as too expensive. Few sectors in Frankfurt have seen much activity, with hi-tech and telecoms suffering more than most.
Vanilla equities traders are lucky to be paid a salary of more than €100,000 ($120,000) a year; a bonus of 100% is seen as good, with many likely to get nothing at all this year.
Despite that, some see a silver lining. Andreas Halin, a consultant at Spencer Stuart in Frankfurt, said some recruitment looks likely in 2004 as economic prospects improve. Traders who have lost their jobs may find themselves in demand again.
Paul Tapp, a consultant at Longbridge Associates, said: 'It's a very strange market right now: things are slow but selective hires are going on, with institutions still keen to take on quality staff: if you're good, there should be something there for you.'
But unlike Halin, he saw little chance of a job for traders who had been out of work for long.
Kathryn Ward at AMGM said: 'Most firms are very particular about who they are willing to hire. Equities trading has been hard hit in Frankfurt, with numerous redundancies."
She said anyone without an outstanding track record at a bulge bracket house faced an uphill battle
Given this sobering backdrop, what is the key to survival in this market? Just one thing: a first class contact book.
Vaughan-Edwards said: 'Relationships - especially with funds' central dealing desks - are absolutely key: without them you have virtually no chance.'
He said that in Germany most equity commissions come out of no more than eight accounts, with those run by DWS, DIT, Deka, Actinvest and Commerzbank the most important.
This had helped polarise the market between those traders with contacts at the funds - who can expect to be rewarded handsomely, with bonuses of up to 400% - and the rest.
The good news for those still in their jobs in the latter category is that the market is picking up as the German economy finally shows signs of recovery.
The bad news is that this still may mean no end to the sales and commission drought: only the best placed, with the best relationships, can look forward to 2004 with any confidence.
Figures and commentary by Alexander Mann Global Markets, Spencer Stuart and Longbridge International
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Тема: Промышленный спад и потребительский бум
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| Автор:
polit.ru
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Дата: 05.04.03
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Промышленный спад и потребительский бум
После нескольких лет высоких темпов экономического роста промышленный сектор российской экономики начинает впадать в состояние вялотекущей депрессии, хорошо знакомой по периоду 1995-1998 годов. Производство практически всех видов промышленных товаров или стабилизировалось, или сокращается. В первую очередь это относится к производству/ добыче первичных ресурсов – природного газа, нефти, угля, электроэнергии и зерна.
Добыча газа "Газпромом" сокращается уже несколько лет подряд, и прошлый год не стал исключением. И если бы ему на помощь не пришли независимые производители газа, то упал бы и общий объем добычи. Но пока есть рост на скромные 2%. Еще хуже обстоят дела с углем. Там все прямо-таки рухнуло. Производство топливного угля сократилось на 6%, а коксующегося – на 5%. На фоне этих отраслей электроэнергетика выглядит оплотом стабильности. Производство электричества возросло. Правда, не на 1%, как говорили руководители РАО “ЕЭС”, а на 1 млрд. кВт-ч., хотя и такой рост по нынешним временам выглядит большой удачей. А вот с нефтью дела обстоят просто прекрасно. Добыча ее выросла на 8%, и это не удивительно – в условиях перегретой мировой нефтяной конъюнктуры. Тем не менее, в 2003 году повторить такой же рост вряд ли получится, потому что экспортные возможности российской трубопроводной системы исчерпаны, а нарастить их можно будет только через несколько лет, возить же нефть на экспорт в цистернах по железной дороге, как это пытаются делать некоторые компании, очень накладно.
Увеличение или сокращение производства сырья влияет на внутреннюю экономику достаточно косвенно. Например, весь прирост добычи нефти может быть отправлен на экспорт. Поставки на внутренний рынок в этом случае не увеличатся. Более того, поставки на экспорт могут поддерживаться за счет сокращения внутреннего потребления, что имеет место с природным газом.
В то же время, поставки энергоносителей на внутренний рынок являются критическими для всей экономики. Как известно, природный газ, уголь и мазут – основные виды топлива для производства электричества и тепла. И если сокращается выпуск топлива, то и производство энергии тоже падает, вслед за этим сокращаются ее поставки в промышленность. С другой стороны, есть и обратное влияние. Если промышленность не предъявляет спрос на электроэнергию, то и ее производители, в свою очередь, сокращают свое производство, снижая тем самым спрос на топливо. Такая же ситуация имеет место с газом и нефтью в качестве сырья для химической промышленности. Газ используется для производства удобрений, а нефть – для изготовления огромного комплекса самых разнообразных товаров. И если потребление нефти и газа как сырья для химической промышленности сокращается с падением поставок на внутренний рынок, то значит и химическая промышленность начинает буксовать.
Хотя производство первичных ресурсов – это важный показатель экономической ситуации, его не достаточно для полной ее оценки – ведь внутреннее потребление может уменьшиться, например, и вследствие использования ресурсосберегающих технологий. А это скорее свидетельство экономического роста, нежели спада. Поэтому данные о производстве первичных ресурсов надо дополнять цифрами о выпуске конечного продукта, то есть тех товаров, которые могут использоваться только для потребления населения. Таких товаров, разумеется, очень много, поэтому для простоты оценки мы решили взять показатели двух наиболее дорогостоящих – легковых автомобилей (производство) и жилья (ввод в действие). Если в стране экономический подъем, то происходит рост доходов населения, и у потребителей появляется возможность приобретать дорогостоящие товары длительного пользования. И наоборот, если в экономике спад, то продажи и, соответственно, производство этих товаров должно снижаться.
В производстве легковых автомобилей имеет место ярко выраженный спад. Выпуск продукции за год упал на 4%. АвтоВАЗ два раза останавливал конвейер, Ижмаш отправил рабочих в новогодние отпуска еще 21 декабря, а ГАЗ объявил о сокращении выпуска “Волг” еще в 2001 году, когда у него появились новые владельцы. Про застывший АЗЛК и говорить нечего. Эта тенденция продолжится и в 2003 году, так как автомобильные заводы по сравнению с прошлым годом снизили свою производственную программу. Это было вызвано, по словам заводчан, усилившейся конкуренцией со стороны импортных автомобилей. Все последние годы она была на высоком уровне, но особенно возросла во втором полугодии 2002 года, когда в ожидании повышения таможенных пошлин на подержанные иномарки автодилеры резко усилили ввоз этих машин и затоварились ими по самую завязку. Рост запасов импортных автомобилей привел к их дополнительному предложению с усилением ценовой конкуренции. После чего отечественные автомобилестроители не выдержали и отступили.
Это объяснение с позиции “внутреннего производителя”, естественно, отражает не всю действительность. Кроме ускоренного ввоза подержанных иномарок на внутреннее производство так же угнетающе могли действовать укрепление рубля относительно мировых валют, что стимулировало импорт, и рост доходов потенциальных потребителей, занятых в экспортных секторах экономики, что его тоже подталкивало вверх. Понятно, что с ростом доходов скорее хочется купить дорогую и качественную иностранную машину, чем более дешевую и менее качественную отечественную. Поэтому рост доходов газовиков, нефтяников и металлургов привел к падению спроса на товары внутреннего производства, что и почувствовала на себе в полной мере автомобильная промышленность.
Но в падении спроса есть и доля ее вины. Дело в том, что, поддавшись общему настроению, автопром стал предлагать рынку больше, чем рынок смог переварить. Например, мощности АвтоВАЗа рассчитаны на выпуск 710 тыс. автомобилей в год при двухсменной работе. Это три линии по 220 тыс. шт. для выпуска “Жигулей”, и 50 тыс. шт. для выпуска “Нивы”. Фактически завод выпускал в 1999 году 677 тыс. шт., 2000 году - 706 тыс. шт., 2001 - 768 тыс. шт., а на 2002 год запланировал 780 тыс. шт., но не выдержал напряжения и снизил планку до 700 тыс. То есть два последних года завод выпускал машин больше, чем должен был для нормальной работы. И результат не замедлил сказаться. Рост выпуска продукции за счет интенсивного использования оборудования и удлинения рабочего времени не мог не привести к ухудшению качества продукции и росту ее стоимости. И если раньше покупатель это как-то терпел, то сейчас, в условиях роста предложения импорта сопряженного с ростом доходов, он просто переключился на продукцию других производителей. И автогиганту на Волге срочно пришлось тормозить.
Конечно, нарастить выпуск продукции можно было и другим путем – за счет расширения мощностей. Но для этого нужны инвестиции, которых, увы, ни у акционеров завода, ни у обслуживающих его банков так и не нашлось.
Ввод в действие жилой площади демонстрирует несколько иную динамику: 1999 год – 32 млн. кв. м, 2000 год – 30 млн. кв. м, 2001 год – 31,7 млн. кв. м, 2002 год – 33,8 млн. кв. м. За прошедший год есть прирост в 6,6%, что отражает рост доходов, но и здесь увеличение предложения связано с импортом, пусть и несколько своеобразным. Это импорт рабочей силы из ближнего зарубежья. Именно она все активней и активней работает на стройках, производя достаточно высококачественный по европейским меркам строительный продукт. Это тот же случай, что и с автомобилями. До определенного предела российского покупателя устраивало наше качество, а после того, как этот предел оказался превышен, - потребовалось иностранное. И поскольку жилые дома, в отличие от автомобилей, целиком импортировать нельзя, то их стали импортировать в виде услуг иностранных строительных рабочих.
Хотя ввод в действие жилья и демонстрирует рост, надо иметь в виду, что отрасль это крайне инерционная и на изменение в конъюнктуре реагирует с запозданием. Из приведенных выше данных видно, что на кризис 1998 года строители отреагировали только в 2000 году, сократив предложение на 6%. Поэтому и в нашем случае ждать быстрой реакции не приходиться - судить о том, сократился ли спрос на жилье, можно будет только по итогам 2003 –2004 годов. Или по динамике цен на этом рынке.
Таким образом, экономическое состояние производственного сектора выглядит плачевным. Тем не менее, на покупательной способности граждан это отражается слабо. Товарооборот с объемом предоставляемых платных услуг растут опережающими темпами по сравнению с ВВП (соответственно, на 9% и 4%). Как такое может быть? Ведь за падением объемов производства должно происходит и падение доходов работающих. Но покупатели – это те же самые работающие.
Что касается товарного наполнения товарооборота, то здесь все понятно – импорт у нас растет быстрее экспорта, поэтому и предложение товаров не падает – несмотря на стагнацию внутреннего производства. Что же касается спроса, то здесь ситуация немного сложнее. Высокий спрос , как мы упоминали, поддерживается высокими доходами экспортеров. Но это – одна сторона медали. А другая заключается в том, что запасы наличной валюты на руках у населения начинают постепенно уменьшаться. По данным платежного баланса РФ за 9 месяцев 2002 года сокращение долларовых запасов составило $1 млрд. А за второй и третий кварталы, когда, собственно, и произошел перелом тенденции, это сокращение составило $1,8 млрд. Цифра, конечно, небольшая, но ведь лиха беда начало. Тем более, что составители платежного баланса все равно полностью учесть движение наличной иностранной валюты не могут.
Таким образом, немного парадоксальная ситуация сегодняшнего дня – потребительский бум на фоне промышленного спада – объясняется двумя факторами: сверхвысокими доходами экспортеров и проеданием запасов иностранной валюты, накопленных в прошлые годы. Как нам кажется, ситуация это крайне неустойчивая, так как любое падение экспортных цен тут же сократит доходы экспортеров и вызовет у населения прямо противоположную реакцию – они снова начнут покупать валюту про запас. И потребление тут же придет в соответствие с производством.
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Тема: Жить стало лучше или веселее?
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| Автор:
polit.ru
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Дата: 05.04.03
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Жить стало лучше или веселее?
От моего дома до метро – 10 минут пешком. За последние полгода на этом отрезке открылось три кафе. Закрылось два дешевых продуктовых - сейчас там идет ремонт, похоже, строят что-то более дорогое. Закрылся сетевой обувной магазин “К+С”, и открылся более дорогой обувной – принадлежащий тем же людям. Продукты теперь приходится покупать в супермаркете – ничего дешевого рядом нет.
Все наталкивает на мысль, что люди стали больше тратить и, наверное, больше получать. По данным Госкомстата в России действительно наблюдается примерно 9% рост потребления. О том же говорят и московские улицы – стало гораздо больше дорого и модно одетых людей. Мобильный телефон наконец-то перестал быть признаком богатства и есть практически у каждого москвича, хотя его стоимость составляет около четверти среднемосковской зарплаты (которая, по последним данным, - 12000 рублей).
На окраинах Москвы один за другим открываются новые торговые центры и огромные магазины – за вторым шведским магазином IKEA последовали французский Auchan, немецкий METRO и т.д. Из-за них теперь пробки не только в центре, но и на кольцевой дороге. Знакомый таксист поражается: по его подсчетам, ездить в эти магазины просто не выгодно – из-за диких пробок он берет с пассажиров втридорога, а они все равно туда ездят и ездят. При этом возвращаются зачастую с покупками рублей на двести – дешевая чашечка, железная лейка. А за такси платят – по четыреста рублей туда и обратно.
В центре Москвы то же самое происходит с дорогими супермаркетами. Недавно открывшийся рядом с Курским вокзалом торговый центр “Атриум” сразу же создал пробку – хотя есть подземная стоянка, останавливающиеся машины и ждущие таксисты создают затор. В самом “Атриуме” по вечерам народу хоть и меньше, чем в ГУМе, но все же очень много. Цены в тамошних бутиках – не для среднего класса: пара не слишком шикарных ботинок или штанов стоит не менее двух-трех тысяч. Цены на платья и костюмы написаны в у.е. со многими нулями. А люди – ходят и ходят. В “Атриуме”, впрочем, больше всего народу сидит в кафе и тусуется в зале находящегося на последнем этаже кинотеатра “Формула кино”. В кафе, где платить надо столько же, сколько и в уютных городских кофейнях, – еду подают на пластмассовых тарелках, самообслуживание и нельзя курить. Но люди сидят и смакуют едва съедобную пиццу за 100 рублей. Эскалаторы возят вверх в новые бутики и привозят обратно – без покупок. Людей хватает и на “Манежку”, и на “Атриум”, и на “ГУМ”. А раз такие центры не только не закрываются, но и продолжают открываться, значит не только заходят, но и покупают. Впрочем, все не так просто – та же "Манежка", как известно, создавалась под нажимом мэрии: хошь не хошь, а магазин открывай.
В розничной торговле есть две стратегии – большой объем продаж при низкой цене и высокие цены при низком объеме продаж. Переход сети “К+С” на продажу более дорогой обуви из Италии – из того же ряда, что и “атриумовские” бутики – переориентация на вторую модель.
Впрочем, общий рост потребления вовсе не означает, что больше покупать стали все. По мнению Натальи Римашевской, директора Института социально-экономических проблем народонаселения, важно у кого именно потребление выросло – усредненный рост при той поляризации населения, которая наблюдается сейчас в России, ничего еще не показывает.
Ответ на этот вопрос похоже есть. Одним из позитивных итогов 2002 года стал рост потенциальных заработков у людей с высшим образованием: по данным ВЦИОМа, количество специалистов с в/о, которые имеют возможность получать хорошие деньги увеличилось вдвое - с 16 до 34%. Потребляющие больше - это, в основном, люди с заработком выше среднего – те, кто может себе позволить "товары длительного пользования". По оценке эксперта ВЦИОМа Александра Голова, эта группа составляет примерно 10% населения. Именно на них в основном ориентируется бизнес: в Москве не открывается новых дешевых кафе – зато с невиданной даже до кризиса 1998 года скоростью открываются сетевые кофейни. В них едва ли перекусишь – зато можно выпить кофе за 80-200 рублей и съесть пирожное еще за столько же. Для большинства москвичей такие цены кажутся заоблачными: недавно в одном из таких кафе я наблюдал довольно неплохо одетого чиновника, который сравнил цену за чашку кофея с ценой килограмма кофейных зерен – после чего ушел.
В непосредственной близости от Москвы сверхпотребляющей продолжает существовать Москва, балансирующая на грани выживания. У входа в “Атриум” старушка продает варенье из антоновки за тридцать пять рублей. Чтобы купить сок из тех же яблок в “Атриуме”, ей придется продать две банки варенья. Обретающийся в районе Курского вокзала алкаш жалуется, что цена пивных бутылок в последнее время постоянно падает. Выгоднее – собирать железные банки из под “Кока-колы”. Чтобы купить батон хлеба, ему надо найти около двух десятков жестянок.
Бездомным и пенсионерам плохо живется всегда. Интересней, что недовольны жизнью вовсе не только низы общества. Все по тем же данным ВЦИОМа, справедливость в распределении материальных благ - по мнению опрашиваемых - перманентно ухудшается. В 2002 году несправедливым распределение считали 48% опрошенных, что на 8% больше, чем в 2000 году. Улучшение при этом отметили только 7%. Недовольство населения своим материальным положением видно не только по опросам. В общем-то не очень крупное повышение коммунальных тарифов в отдельных регионах вызвало просто социальную бурю – уже давно не было столь многочисленных митингов протеста, как в Нижнем Новгороде, Воронеже или Калининграде, где почти все население так или иначе высказалось против введения 90% оплаты услуг ЖКХ. Жалуются и обеспеченные москвичи. Достаточно высокооплачиваемый специалист в области СМИ утверждает, что ни у нее, ни у ее друзей зарплата еще не поднялась до докризисного уровня. Но даже те, у кого зарплата увеличивается, находятся в неоднозначном положении. Знакомая журналистка говорит, что их с мужем бюджет за последнее время сильно вырос – но в процентном соотношении потреблять они стали меньше.
Цены растут быстрее, чем зарплата. По данным Минэкономразвития, среднемесячная заработная плата остается на уровне ноябрьской 2002 года (в декабре была выше). При этом инфляция продолжается, хотя и меньшими темпами, чем в прошлом году: по данным того же министерства, за два первых месяца 2003 года она составила 4,1% (против 4.3% в январе-феврале 2002 года). Таким образом, реальная заработная плата снижается (во всяком случае, если считать, что государству о ней что-то известно) – примерно с лета 2002 года.
Но правда это или нет – уже не столь важно. Куда важнее, что у людей сохраняется недовольство. Растет и неуверенность в будущем – за 2000 – 2003 гг. – с 24 до 28 процентов. Те же, кто чувствует себя уверенно, тоже ощущают поляризацию: красивая жизнь в центре Москвы слишком диссонирует с реальной жизнью того же города, не говоря уже о России в целом. За пределами красивого офиса и дорого кафе – все те же бабульки с вареньем. Многим это напоминает предкризисный год, когда жизнь вроде как налаживалась. Потребление было в самом разгаре, хотя в воздухе чувствовалась какая-то электризация, как будто скоро начнется гроза.
Падающий доллар тоже оптимизма не прибавляет – большинство держит свои сбережения, если они вообще есть, именно в американской валюте. О кризисе говорят и эксперты – в "Независимой газете" недавно опубликовали статью Юрия Алексеева о том, что политика ЦБ на укрепление рубля, мол, может привести к новому дефолту. Александр Голов тоже отмечает, что 2002 год похож на предкризисный – переломом позитивных эмоций на негативные.
Люди, вслед за экспертами, тоже чувствуют нестабильность, но изменить ситуацию не могут – остается лечить симптомы – депрессию. И шопинг здесь, как известно, – основное средство. Вместе с красивым ужином, походом в шикарный кинотеатр или просто чашкой шоколада – благо его теперь можно найти в ассортименте любой кофейни.
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Тема: Derivatives professionals
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| Автор:
Chand Sooran
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Дата: 07.04.03
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DERIVATIVES PROFESSIONALS
Since many of the readers of the Financial Pipeline are university students hoping for careers in the sales and trading groups of global financial institutions, we thought that it would be a good idea to write a brief overview of what these institutions look for when they are hiring and what characteristics make a good derivatives professional. A derivatives professional is someone who trades derivative financial products or sells derivative financial products.
There are three aspects to the individual that make them suitable for a career in derivatives:
Educational background
Personal background
Potential for growth
For each of these three categories, there is a continuum of opinion that varies by institution.
There is no one correct answer. There are three kinds of firm that are involved in the use of derivatives:
Investment banks
Commercial banks
End-users (mutual funds, corporations, hedge funds, floor traders)
EDUCATIONAL BACKGROUND
There are two schools of thought when it comes to education. There are many people who believe that the only candidates who should be considered for positions as derivatives traders are those individuals who have graduated from MBA programs. Having an MBA, especially one from a good school, is a signal to the rest of the world that you have been screened by a well-respected institution as having the capacity and the interest for the work.
Often, the people who hire derivatives professionals are unskilled when it comes to making human decisions. More often than not, the people who rise to management positions in derivatives products groups come from a technical background in which they have no previous responsibility for other people. They are placed in these leadership roles because of their understanding of the product. The MBA acts like a "tell" or market signal.
The only thing that one should look for in a derivatives professional is a keen sense of intelligence that includes a solid foundation of numeracy and computer skills. They do not have to be able to reproduce the mathematics behind the Black-Scholes equation. They do not need to program applications in Visual C++. They should be able to intuitively understand the implications of the Black-Scholes model and the logic underlying the set up of the computer applications upon which derivatives practitioners are so reliant. They cannot be people who are easily bamboozled. They can explain difficult technical concepts in easy-to-understand language.
In the early days of derivative products, people with serious mathematics backgrounds were put into derivative positions by virtue of their quantitative skills. But that's only part of the package. They also have to be able to trade or to sell, depending upon their specialization. Institutions quickly realized that it's more important to hire someone who could figure out the behavioural characteristics of the product and marry that comprehension with a fundamental ability to trade or to sell. Sometimes, a derivatives professional's strongest asset can be a keen "street sense".
Many people would be surprised that some of the most sophisticated derivatives professionals in the world are not that well-educated, on the face of it. These are men and women who have obtained through years of application an intuitive understanding of the behavioural characteristics of their product. They can look at a structure and instantly know how to break it down into its components, assessing the riskiest components first. They know what it is like to be short gamma through an event risk, like a political vote. They have a keen appreciation of what it is like to manage a complex portfolio of financial instruments.
Any academic background is good preparation if its end result is an individual who can think independently, quickly and rationally on his or her feet. One of the top foreign exchange banks in the world has a musician as a senior options professional. Top investment banks have philosophers, economists, lawyers and entrepreneurs. Andy Krieger, one of the best known currency speculators in the world, obtained all-but-dissertation status for a doctorate in ancient Indian studies. Learning Sanskrit imposed a rigor to his thinking, evidently.
As in all things, balance is the best solution. A solid derivatives desk will have people from a variety of backgrounds whose strengths can complement one another and who can compensate for each others' weaknesses.
PERSONAL BACKGROUND
Investment banks and commercial banks also look at one's personal background. Walking into these dealing rooms, you will meet some very impressive people. The former chief executive of a Canadian investment dealer expressed his preference once for former athletes, likening the dealing room to a sports team. That may be carrying things a bit far. Athletic achievement is certainly something that carries a great deal of weight on any professional job application. You will find many nationally-ranked athletes among the ranks of derivatives professionals.
People want interesting colleagues, ones with whom they feel some commonality. Personality and charm are essential attributes of the derivatives professional.
Cynically, there are those who will suggest that personal connections are the thing to get you in the door. Sadly, this is true in many of the middling shops that trade and sell derivative products. There is a great deal of money to be made in this business. Sometimes the franchise (or the previous experience of the firm) is what makes the money. Other times, it is the individuals who bring in the profits. At many unsophisticated institutions, deciding upon the breakdown between those two causes is an arbitrary affair. Firms that believe that the franchise makes the money place less emphasis on the importance of human capital in their hiring (and more importantly their bonus allocation) decisions. Those are the places that are susceptible to nepotism and favouritism. Being a friend of the chief executive officer might carry more currency, literally, than an individual's profit and loss. It pays to do due diligence on prospective employers.
POTENTIAL FOR GROWTH
This is the most difficult characteristic of the potential candidate to assess. The manager must decide if this individual is committed to putting in the leg work required to be at the leading edge of the market. And the manager must establish that this person is bright enough to be able to compete as markets evolve.
There is no hard and fast rule for establishing one's credibility in this respect. If you can show that you have grown where others have not or that you have progressed faster than others, this is a start. But, as they say, historical performance is no guide to future performance.
CONCLUSION
At the end of the day, the great derivatives players are looking for two things: excellence and motivation. They do not care in what endeavour this has been achieved. They want people who are the best (or pretty damned good) at what they do. If you are the best in one activity, you have learned the skills to be the best derivatives professional. It is an intensely competitive arena.
If you are the kind of person who is committed to excellence in this fashion and you are interviewing at an institution that does not appear to strive for this excellence, your best bet is to turn them down for two reasons. Turning them down means that you will not have the stigma of being attached to an also-ran. And you will avoid being judged by arbitrary criteria beyond your control.
Anyone can be a good derivatives professional if they work hard and they learn from the best people. After all, it's not rocket science. It's sales and trading.
Article by Chand Sooran, Principal Victory Risk Management Consulting, Inc.
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Тема: Have Merrill Lynch's Bulls Been Led Out to Pasture
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| Автор:
rrr
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Дата: 07.08.03
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Have Merrill Lynch's Bulls Been Led Out to Pasture
January 5, 2003, Sunday
MONEY AND BUSINESS/FINANCIAL DESK
By LANDON THOMAS Jr. (NYT) 3034 words
IN quick succession, just days after E. Stanley O'Neal took over as
chief executive of Merrill Lynch on Dec. 2, the firm announced several
executive changes. G. Kelly Martin, a member of Merrill's executive
committee, stepped down as president of the international private client
business to pursue other interests. Michael J. P. Marks, the chairman of
its European, Middle East and African operations, retired. Paul D. Roy,
the co-president of its global markets and investment banking business,
said that he, too, would leave the firm.
Absorbing their portfolios were James P. Gorman, president of Merrill's
brokerage network in the United States and a former McKinsey & Company
executive who joined the firm in 1999, and Arshad R. Zakaria, Mr. Roy's
co-president, who at 40 is now the youngest head of any big banking and
securities division on Wall Street, the unit responsible for 60 percent
of Merrill's profits.
It happens all the time -- a new chief executive names his own team,
after all. But at Merrill, the bloodletting has actually been going on
since Mr. O'Neal became president in July 2001, starting with the
resignations, under pressure, of Jeffrey R. Peek, the head of asset
management, and Thomas W. Davis, who had run the firm's investment banking
business.
More important, it signals a cultural and management revolution unique
in the firm's history. In contrast with its peers on the Street,
Merrill, under Mr. O'Neal's iron grip, is ruled by the cold, hard view that
the current malaise of the markets will not dissolve anytime soon.
Mr. O'Neal's Merrill, it seems, is no longer bullish on America.
Over the last two years, Mr. O'Neal's crew, which also includes Thomas
H. Patrick, the executive vice chairman, has presided over the loss of
18,600 jobs at Merrill, or 25.8 percent of the work force. No other
investment firm has come close to cutting so deeply.
Merrill's new management team is viewed by insiders and outsiders alike
as extraordinarily numbers-oriented -- realists, to supporters; cynics,
to detractors.
Mr. Zakaria's ascent, in particular, has raised eyebrows on Wall
Street. He is ''a quant,'' expert at putting together complicated financial
instruments, but lacking in experience in relationship banking, which
generally demands more advanced people skills, investment bankers who
have worked with him say.
That Mr. Zakaria is talented, there is no doubt. What matters more to
Mr. O'Neal, however, is loyalty, which all in the new guard at Merrill
have in spades.
The revolution will be complete in April, when David H. Komansky, the
former chief executive and current chairman, departs. Mr. Komansky, with
his back-slapping bonhomie, born of his years as a top-producing
broker, is already a faded symbol of a global expansion strategy that
resulted in the corporate bloat that Mr. O'Neal is working so hard to pare.
Inside Merrill, several employees said, morale is grim. One former
employee likened the environment in the investment banking ranks to
Afghanistan under the Taliban. Bankers who have left Merrill in recent years
express amazement that the banking and securities business -- home to
high-profile areas like mergers and acquisitions and equity underwriting
-- is being run by Mr. Zakaria. He may be recognized within the firm as
a tax expert and may well have made a large number of client calls last
year, but he is no relationship banker, they say.
Mr. O'Neal and company -- all of whom declined to be interviewed for
this article -- do have supporters who believe that they are the right
managers at the right time.
''These guys are workers,'' said Stephen L. Hammerman, a former Merrill
vice chairman who retired from the company last February. ''They are
rolling their sleeves up and are here to do a job. They know how to deal
with clients and they know how to deal with money.''
TO impose his view, Mr. O'Neal has brought in a group of people that
contrasts sharply with past management teams.
Mr. Gorman, 44, is from Melbourne, Australia. Mr. Zakaria hails from
Bombay. The new chief financial officer, Ahmass L. Fakahany, also 44, is
from Cairo. Sergio Ermotti, 42, co-head of global equity markets, is
from Lugano, Switzerland. Dow Kim, 40, the firm's head of global debt, is
a native of Seoul, South Korea.
Robert C. Doll Jr., a 48-year-old American from Philadelphia, now heads
asset management.
Merrill's top managers are among the youngest executives on the Street.
None have been with Merrill Lynch for more than 20 years, and none have
risen from within the firm's vast private client group -- Merrill's
usual source for top managers. For all of them, starting with Mr. O'Neal,
the idea of Mother Merrill as a nurturing bureaucratic womb is dead,
according to top bankers at the firm. Mr. Zakaria is the prime example of
that. His startling ascent through the Merrill management ranks and his
instinctive understanding of some of the most esoteric, profitable and
controversial financial products that Wall Street has to offer,
combined with his uncanny ability to navigate the firm's byzantine political
ways, symbolizes the new Merrill manager in many ways.
Throughout his 15-year career at Merrill, Mr. Zakaria has had a hand in
devising and selling some of the most lucrative financial products ever
to come out of Merrill Lynch. These range from off-balance-sheet
tax-shelter partnerships in the late 1980's to a variety of equity-linked
instruments in the mid-1990's that allowed Merrill's corporate and
individual clients to raise billions in cash while escaping hundreds of
millions in taxes.
The son of an upper-class family in Bombay (his brother Fareed is a
columnist and the editor of Newsweek International), Mr. Zakaria has
always been at the top of his class. At Harvard, he graduated summa cum
laude with a degree in applied mathematics and won an $8,000 prize from
Morgan Stanley for a paper he wrote on pricing call options.
In 1985, he made the unusual jump directly to the Harvard Business
School -- and he breezed through it, winning a Baker scholarship and a Loeb
Rhoades finance fellowship.
After earning his M.B.A. in 1987, and after a vigorous bidding war for
him among all the big investment banks, he signed on with Merrill Lynch
for $150,000 a year, an extremely high salary for a business-school
graduate with no full-time banking experience.
Mr. Zakaria skipped through the training program and went directly to
work for E. S. Purandar Das, a managing director and fellow Indian who
was involved in an effort to create tax-shelter partnerships and sell
them to Fortune 500 companies looking to avoid capital gains taxes. Mr.
Das, a former chemical engineer with a deep understanding of the United
States tax code, had less expertise in creating financial products --
where Mr. Zakaria was useful.
At the time, according to court documents cited in news accounts,
several big Merrill Lynch clients, like Schering-Plough, AlliedSignal and
Colgate-Palmolive, were eager to lower the taxes they were paying on
subsidiary sales. Mr. Zakaria worked on a team with Mr. Das that solved the
problem with a plan to set up an offshore fund with a foreign partner
for each client. Within the fund, securities would be bought and sold,
generating an eventual loss that could be carried forward to offset the
company's capital gain.
It was a brilliant piece of financial craftsmanship. One of the first
purchasers was Robert P. Luciano, then the chief executive of
Schering-Plough and a Merrill board member, a position he still holds. The fees
for Merrill ran as high as $15 million a client.
By 1990, Mr. Zakaria was a full-fledged star. As the recession's teeth
sank deeply into the firm, Mr. Zakaria, Mr. Das and Mr. Luciano's son,
Richard, who had joined their team, flew around the country in a
Gulfstream jet, pitching their partnerships to eager corporate clients, the
court papers show.
That year, say a number of former Merrill bankers who declined to be
identified, that small group pulled in more than $100 million in revenue.
The combined cut for Mr. Das and Mr. Zakaria was around 20 percent,
these people say. Their rewards were so large that Barry S. Friedberg, the
head of investment banking at the time and a member of the compensation
committee, made a private deal with his two banking stars to prevent
the spread of jealousy. Mr. Friedberg, who is leaving the company, did
not return phone calls seeking comment.
Nevertheless, word spread: Mr. Zakaria, then 27 and just three years
out of business school, was pulling down nearly $5 million, making him
one of the highest-paid bankers not only at Merrill but also on Wall
Street.
In the end, though, the partnerships were too good to be true. By 1995,
the Internal Revenue Service had begun to close them down as part of a
drive to close tax loopholes. Mr. Das, his career already on the wane,
was forced to testify in court on the nature of the partnerships and
went on to identify the clients involved. Mr. Das, who later left the
company, refused to comment.
Mr. Zakaria, however, moved on and has never been tainted by the
fallout from the partnerships.
By that time, he had developed a close relationship with Mr. Patrick, a
senior Merrill Lynch banker with a keen interest in the tax work that
Mr. Zakaria was doing.
Mr. Patrick oversees all finance, tax, legal and research functions
within Merrill and is a close adviser to Mr. O'Neal. He is seen within the
firm as a de facto president and as an architect of its restructuring
efforts.
During his 24 years at the firm, Mr. Patrick has twice served as chief
financial officer, has headed the equity markets group and has run the
insurance business. He is best known for having helped invent
zero-coupon bond instruments convertible into equity, called Lyons for
liquid-yield option notes, in the mid-1980's.
Arcane yet lucrative, these products opened a new vista for Merrill
corporate clients, allowing them to raise cash by issuing debt, pay out
less in interest and get a tax break in the process. They were a wild
success, generating hundreds of millions in fees for Merrill and spurring
copycat products from Merrill's peers.
IMPRESSED with Mr. Zakaria's work on the tax shelters, Mr. Patrick
became his mentor and moved him to the firm's corporate finance group.
Although the tax shelters were an embarrassment for the firm, the powerful
demand for them, together with the success of the Lyons, made it clear
to top Merrill executives like Mr. Patrick that the real potential on
Wall Street was in the design of instruments that allowed clients to
raise money while paying less taxes.
By the mid-1990's, Mr. Zakaria and his team, under the careful eye of
Mr. Patrick, were churning out and marketing several similar
tax-avoiding financial instruments. Called trust-preferred securities, they were
an evolution of the Lyons product, with specific trademarked names like
Strypes and Prides.
Each served a different purpose, but the overriding aim was the same:
to allow a company or individual to raise cash while paying as little
tax as legally permissible.
Mr. Zakaria's team manufactured the products, and Mr. Patrick, an
experienced relationship banker, sold them to clients like Sam Zell, the
Chicago-based real estate investor, and Eli Broad, the chairman of
SunAmerica. While the I.R.S. has raised questions from time to time about
these products, it has never prohibited them and they have wide acceptance
on the Street.
On the surface, the relationship between Mr. Patrick and Mr. Zakaria
seems an odd one. Gruff and cocksure, Mr. Patrick, 57, is of Irish
descent, a graduate of Rutgers with an M.B.A. from the University of
Pittsburgh, and a product of gritty Youngstown, Ohio. The urbane Mr. Zakaria
comes from a different world.
But many who know them say they have much in common. They are both
schooled in numbers and are supremely confident in their own abilities,
sharing a propensity to snap at those who fail to grasp their logic. Both
are golf enthusiasts and have been known to drop everything to play.
They even invest together. They were partners in their own personal
investment fund, called Youngstown Global Partners, after Mr. Patrick's
hometown. The fund would take positions in everything from stocks traded
on the Bombay Stock Exchange to hot initial public offerings like
Einstein Bagels, a company that Merrill bankers took public in 1996, which
later filed for bankruptcy protection and is now owned by New World
Coffee-Manhattan Bagel.
The Youngstown fund is inactive, but it is indicative of the pair's
close relationship.
In 2000, Mr. Patrick was appointed chief financial officer for the
second time by Mr. Komansky. One of his first moves was to recommend that
Mr. Zakaria be named head of corporate risk management. That happened in
May 2000, with Mr. Zakaria reporting to Mr. Patrick.
About that time, the race to succeed Mr. Komansky as chief executive
was heating up. The Merrill board had decreed that by the end of 2001,
Mr. Komansky was to anoint a president who would then take over as chief.
It was a bitterly contested race among Mr. O'Neal, who headed the
private client business at the time; Mr. Peek, of asset management; and Mr.
Davis, of investment banking. Top Merrill executives picked their
horses early and hoped for the best, knowing that their jobs could well
depend on who eventually won.
Early on, several Merrill bankers said, Mr. Patrick sided with Mr.
O'Neal. Mr. Patrick knew Mr. O'Neal when he was a rising star in Merrill's
high-yield bond department in the early 1990's, and had been impressed
with his analytical mind as well as his client skills. What's more, Mr.
Patrick had a contentious relationship with Mr. Peek, who was seen as a
favorite of Mr. Komansky's.
Mr. Patrick and Mr. Komansky had their differences, too.
In 1993, the two were contenders for the presidency of Merrill, and
when Mr. Komansky won, Mr. Patrick endured seven years of exile in
Chicago, running the firm's special advisory group.
Mr. Patrick has always had a green-eyeshade mentality when looking to
the firm's future. He looked askance at Mr. Komansky's charge into new
markets like Canada, Australia and Japan, insiders say. In fact, like
many other Merrill executives, he was an aggressive seller of the
company's stock through much of 2000 and 2001, according to securities
filings.
In July 2001, the Merrill board, concerned about the firm's shrinking
profits, forced Mr. Komansky's hand, and Mr. O'Neal became president and
the chief executive heir apparent.
Driving the decision was Mr. Luciano, who in his position as chairman
of the board's management committee led the search for a new chief. He
remembered Mr. Patrick and Mr. Zakaria well from their work 10 years
earlier on the tax shelters for Schering-Plough and came to know Mr.
O'Neal through them. The four also shared a passion for golf and spent hours
together at Mr. Luciano's various golf clubs.
Several senior Merrill Lynch bankers now say Mr. Luciano was convinced
that Mr. O'Neal -- with Mr. Patrick and Mr. Zakaria being crucial
members of his team -- would have the colder, more objective approach needed
to cut the fat from the firm.
Behind the scenes, William A. Schreyer, Merrill's chief executive
during the 1980's, also played a significant role, these people say. He,
too, knew Mr. Zakaria and Mr. Patrick from their tax-shelter work and cast
his influential vote in favor of the O'Neal team.
On Oct. 5, 2001, Mr. O'Neal promoted Mr. Zakaria to his current post at
global markets and investment banking. Later, in November, he named Mr.
Patrick executive vice chairman.
For the moment, analysts are cheering Mr. O'Neal and his number
crunchers. Profit margins in important areas like investment banking and the
brokerage business are rising in the wake of the layoffs. The company's
stock fell 27 percent in 2002, in line with other brokerage stocks, and
closed on Friday at $39.97, 32 percent off its 52-week high.
OTHER large Wall Street firms are increasing layoffs, a sign that they,
too, are growing more concerned about the depths of the market's slide.
''Although you worry that they may have cut too far, the fact that
Merrill's competitors are throwing in the towel is a confirmation that
O'Neal was right,'' said Guy Moszkowski, a brokerage analyst at Salomon
Smith Barney. ''And while they have downsized at just about every level,
they have kept their rainmakers.''
Still, many wonder how a bear-market Merrill will fare when equity
markets rebound. Over the last year, many top deal makers have left the
firm, and Merrill has dropped to sixth place, from third, in worldwide
merger advisory work. If Mr. O'Neal and his team are wrong about the
length of the market's collapse, Merrill may well suffer -- and require
another redesign.
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Тема: Re: (1) Wharton reading room
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zf
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Дата: 07.12.03
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December 7, 2003
Who Wins and Who Loses as Jobs Move Overseas?
By ERIKA KINETZ
he outsourcing of jobs to China and India is not new, but lately it has earned a chilling new adjective: professional. Advances in communications technology have enabled white-collar jobs to be shipped from the United States and Europe as never before, and the outcry from workers who once considered themselves invulnerable is creating a potent political force.
After falling by 2.8 million jobs since early 2001, employment has risen by 240,000 jobs since August. That gain, less than some expected, has not resolved whether the nation is suffering cyclical losses or permanent job destruction.
Last month, The International Herald Tribune convened a roundtable at the Algonquin Hotel in Manhattan to discuss how job migration is changing the landscape.
The participants were Josh Bivens, an economist with the Economic Policy Institute, a nonprofit research group in Washington that receives a third of its financing from labor unions; Diana Farrell, the director of the McKinsey Global Institute, which is McKinsey & Company's internal economics research group; Edmund Harriss, the portfolio manager of the Guinness Atkinson China and Hong Kong fund and the Guinness Atkinson Asia Focus fund; M. Eric Johnson, director of Tuck's Glassmeyer/McNamee Center for Digital Strategies at the Tuck School of Business, Dartmouth College; and, via conference call from Singapore, Stephen S. Roach, managing director and chief economist of Morgan Stanley . Following are excerpts from their conversation.
Q. How big an issue is job migration?
MR. ROACH Offshore outsourcing is a huge deal. We do not have a data series called jobs lost to offshore outsourcing, but 23 months into the recovery, private sector jobs are running nearly seven million workers below the norm of the typical hiring cycle. Something new is going on. America is short of jobs as never before, and the major candidates for our offshore outsourcing are ramping up employment as never before. So yes, I think two and two is four.
MS. FARRELL This is a big deal in the sense that we see something structural happening. But I would react to the notion that it is a big deal we should try to stop or recognize as anything other than the economic process of change. I think the bigger deal is the fact that we are going to have very serious curtailment of the working age population.
MR. BIVENS I'm curious about Steve's assertion that outsourcing can explain the sluggish employment situation. If you just look at slow growth plus fast productivity, you've got the sluggish labor market right there.
MR. ROACH A pickup in productivity does not have to be accompanied by sluggish employment. There are countless examples, like the 1960's and again the 1990's, of rapid productivity growth accompanied by rapid employment.
The point is that the relationship between aggregate demand and employment growth looks to me as if it has broken down. That breakdown reflects not just the rapid growth and maturation of outsourcing platforms in places like China and India, but also the accelerated pace by which these platforms can now be connected to the developed world through the Internet. These are brand-new developments. This is a huge challenge for service-based economies, like the United States.
MR. BIVENS How much of the insecurity that people think is caused by service sector outsourcing is in fact just the business cycle as usual? Every time there's a recession people want to blame it on some underlying structural factor, when sometimes recessions are just recessions, shortfalls in demand that work themselves out.
MR. ROACH Over the September to November period, employment has turned up, but many of those jobs came from the temporary hiring industry. These are service jobs, contingent workers without benefits and significantly lower pay scales. We're getting the G.D.P. growth, and by now any recovery in the past would be flashing green on the hiring front. This one isn't. With all due respect, I don't know what you guys are talking about. This is a profoundly different relationship between hiring and the business cycle. And I think these jobs are, by in large, lost forever.
Q. Who wins in offshoring and who loses?
MS. FARRELL There is an assumption by protectionists that these jobs are going somewhere else, and all this money has been pocketed by C.E.O.'s who take it home. A little more sophisticated version is: It's being pocketed by companies in the form of profits. One step further and you say those profits are either going to go as returns to the investors in those companies, or they're going to go into new investment by those companies. Those savings enable me, if I am an investor, to consume more and therefore contribute to job recreation, and if I am a company, to re-invest and create jobs. That's important because I agree that we are migrating jobs away, some of which will never return, nor should they.
MR. BIVENS Within nations, trade tends to redistribute a lot of income. The gains get pretty concentrated in the pockets of capital owners. The people who lose out are the blue-collar workers. Now you've got this class of white-collar workers who are much more insecure about their job prospects, and their labor market bargaining power is being undermined. It doesn't mean we need walls all around the economy, but it does mean we need to get really serious about making sure all these gains are distributed.
MR. HARRISS Look at what's gone on in China over the last 10 years: There are 300 million people in those eastern coastal provinces who have seen an extraordinary pickup in their standard of living. And you're seeing an economy that is just about to take wing because you now have consumers who were never able to participate in the economy before. Now it is people in the developed world who are being left behind. That is very difficult to resolve.
Q. One key piece of the win-win theory seems to be that displaced workers do find new jobs. What does history teach us about how well displaced manufacturing workers have been reintegrated into the work force?
MR. BIVENS The best research on what happens to people displaced from manufacturing is that they eventually find a new job, but they take an average wage cut of 13 to 14 percent. The people who are hit hardest are older workers. Also, it's not just the worker who is directly displaced from a sector that is hurt by international trade, it is also every other worker in the economy who has a similar skills profile.
Q. For labor, is outsourcing a race to the bottom?
MR. ROACH It's a race to the bottom if we spend all our energy trying to protect existing sources of job creation, as the politicians in the U.S. Congress are inclined to do. The problem is that globalization is growing asymmetrically, so initially it creates more supply than demand. We're living through that asymmetry right now, and that has caused a potentially dangerous political backlash. The Chinese, for example, are reluctant to transform their habits from savers to consumers because they're losing jobs through the reform of their own economy, and they don't have social security or retirement. Over time there is a rising tide. But the political process is not that patient.
Q. If protectionism is the wrong answer, explain how the market will solve this. Does government need to intervene at all?
MR. ROACH This is classic election-year posturing by a Congress that is basically responsible for the problem itself and doesn't want to admit it. We have trade deficits with China and Japan because Washington is running the most reckless fiscal policy we've seen in the United States since the late 1960's. They are the problem. It's not the Chinas and Japans and Indias of the world. Moreover, there are a lot of assumptions being made, especially by political leaders, that the rapid growth of Chinese exports and production is the smoking gun of the threat to traditional sources of job creation. About two-thirds of the export growth China has realized over the last 10 years has come from Chinese subsidiaries of multinational corporations headquartered in Japan, the U.S. and Europe and their joint venture partners. These are our companies. It's us; it's not necessarily them.
MR. JOHNSON It's all about innovation and productivity. As long as we maintain those two engines, we'll continue to have a very high standard of living. Out in the Bay Area there are plenty of folks who would love to create a little bit of protectionism around their I.T. jobs, but we are far better off letting a lot of those jobs go. Low-skill jobs like coding are moving offshore and what's left in their place are more advanced project management jobs.
MS. FARRELL We will require different services, medical devices, all kinds of things to support an aging population. Fifteen years ago, you would not have been able to fathom many of the jobs that exist today.
MR. HARRISS There is not much new radical innovation in Asia of the kind we're looking at to create jobs in the U.S. Apart from a very few exceptions, what Asia does well is take the latest innovations and production techniques, invest in the most recent equipment and then bring in their powerful advantages in low-cost labor, and start to produce. For the most part, the benefits to Asia are just going to come with more people coming off the poverty line and into the global economy.
Q. What happens when China ceases to be an endless pit of poverty?
MR. ROACH China for all practical purposes has an infinite supply of labor: 400 million in its urban population and another 900 million in the rural area. The average wage of a Chinese worker is still 2.5 to 3 percent of the counterpart in the developed world. Those are disparities that will be around for a long time.
Q. Can China keep labor costs so low and still grow a critical mass of domestic consumers?
MS. FARRELL You are still talking about a pretty significant critical mass of people who are now entering consumption level incomes: $7,000 to $10,000 G.D.P. per capita. Car sales in China are growing at 26 to 30 percent compound annual growth rates. Televisions, refrigerators, mobile handsets all have the same kind of J-curve. You only need 10 percent of the population to have a critical mass of income.
Q. What do you see in the future?
MR. BIVENS Globalization is good at increasing the productive capacity of the world, but to make sure there are enough jobs for everybody, you need demand to keep pace with that increase in supply. That's where globalization presents a real challenge. Government's big roles in the future are to make sure global demand matches supply, and to provide social insurance schemes to make sure the living standards of the workers being left behind aren't sacrificed on the altar of global progress.
MR. ROACH In the future there are two roads. One is to look backward and hang on to what we think we're entitled to. The other is to recognize what has made America. Our virtues lie in a flexible and open, technology friendly, risk-taking, entrepreneurial, market-driven system. This is exactly the same type of challenge farmers went through in the late 1800's, sweatshop workers went through in the early 1900's, and manufacturing workers did in the first half of the 80's. We've got to focus on setting in motion a debate that pushes us into new sources of job creation rather than bemoaning the loss. There are Republicans and Democrats alike who are involved in this protectionist backlash. They're very vocal right now, and they need to be challenged.
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Тема: Goodbye to the City
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Дата: 08.02.03
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Goodbye to the City
Feb 6th 2003
From The Economist print edition
What has happened in the City so far is bad enough, but there is worse to come
Get article background
IT IS perhaps fitting that the City of London, which became so excited by the apparently limitless possibilities of technology only a few years ago, is employing the same technology to fire those who helped boost the mania. As City firms cut staff left and right, giving the unfortunates a bin bag is only one of a myriad of ways of getting rid of unwanted staff. One poor soul, a managing director no less, who had worked for a big American bank for 16 years, was informed that his services were surplus to requirements by e-mail; another was apparently sacked by text message.
It is not just investment banks that are cutting: fund managers, consultancy firms, technology companies, lawyers: all have been wielding their axes with a will. This is unfortunate not only for those given their marching orders. The health of the City matters far more to London than Wall Street does to New York. About twice as many people are employed in the financial services industry in London as in New York. And given that financial services are Britain's biggest export earner by a long chalk, it is worrying for the economy as a whole.
No-one knows quite how many jobs have been lost. Perhaps 30,000-60,000 financial-services jobs have gone in and around the City since the downturn began a couple of years ago. Official figures are late and pretty useless: bond traders do not tend to sign on the dole. Investment banks in particular are secretive about where they are sacking people: they tend to come out with a global number. Still, Experian, a consultancy, reckons that there were about 330,000 in City-type jobs at the peak in 2000, and that around 30,000 have now gone.
The worst recession the City has ever known is the result not merely of a slow global economy, falling stockmarkets, or the prospect of war—though all play their part. The root cause of the present carnage is cost inflation that makes Hollywood or premiership football clubs look like models of parsimony.
Much of what goes on in the City is, at root, not that difficult: the firms that operate in it buy and sell things and hope to make money for their clients and for themselves. Those that buy and sell equities or bonds do little more than estate agents, selling and buying things about which, for the most part, they have little understanding—and they are about as considerate to their customers. They do, however, earn about ten times as much. And the highest-paid rake in many times that.
Ten years ago, says a former board member at a big investment bank, a couple of people in the firm were paid $1m a year worldwide. Three years ago, he reckons that 1,000 were, and a handful earned more than $50m. He himself has an impressive pile in the country; the salary earned by his well-paid wife just about pays for the gardeners.
But the gravy train has already slowed markedly. After cutting back on swanky hired cars and telling a few poor souls to fly economy, city firms have cut back-office staff (those who settle trades), often by merging departments, and put much technology spending on hold. (At Salomon Smith Barney, for example, technology spending has fallen by up to 40%.) Out, too, have gone a few non-performing salesmen, newcomers and managing directors in areas in which business has dried up, such as mergers and acquisitions (M&A) and equities.
M&A was a very lucrative business in the go-go years, but activity in Europe fell by more than half between 2000 and 2002, from $1.2 trillion to $590 billion, and investment bankers have been sacked quicker than you could say “proposal”. And those that are left? “Instead of having a lot of people on $1m, there are a lot on $300,000,” says Martin Armstrong, a partner at Armstrong International, a headhunting firm.
Equity departments, which were also goldmines in the boom years, have been similarly hit. In general, equity-sales departments are perhaps a third smaller than they were and, says a director at one of them, “we haven't finished yet”.
Equity research is being pruned especially savagely. In 1998, Deutsche Bank was spending about $150m a year on equity research around the world. By 2000, both Deutsche Bank and Salomon Smith Barney were spending about $1 billion. Others were forking out not dissimilar sums. Telecom analysts were in particular demand. At least one London-based European telecom analyst had a package worth $25m over three years.
This extra money spent on research was essentially paid for by banks' investment-banking operations (advising on mergers and so forth), which wanted tame analysts to drum up business; investors stopped paying much for it a long time ago. And who can blame them? By the late 1990s most research was generally little more than puffery. Eliot Spitzer, the New York attorney-general, recently decreed that investment research should no longer be paid for by corporate finance. There are no such requirements in Britain, but the harsh light that has been shone on equity research has dented the demand for analysts. Many banks, says Mr Armstrong, want to cut their analyst teams in half.
Fund managers, who are doing about as badly as anybody else, are also sacking analysts. Fund managers' fees are based on the value of assets under management, and in the case of FTSE 100 stocks, this is not much more than half the level it was three years ago. Swooning stockmarkets are a particular headache for British fund managers, who have had too much invested in equities for too long, which is where many of their recent problems arise, and why almost every defined-benefit pension plan is now in trouble.
Some of the products peddled by fund managers, such as split-capital trusts, and now high-income bonds, which guaranteed income but not, alas, the return of the principal, have also been tainted by scandal. No wonder that the business of fund management is so much less alluring these days than it once was. The likes of Jupiter and Threadneedle, two asset managers, have been for sale for ages. Nobody seems interested.
Bonds are the only thing keeping investment banks afloat right now: sluggish economies and dire stockmarkets have increased the attractiveness of something that pays a fixed rate of interest. But bonds will not carry on being the money-spinner they have been for the past couple of years, because interest rates will not go much lower.
What has happened so far is bad enough, but there is worse to come. Much of the rapid expansion in capacity and pay was financed by bumper profits in the American markets. The desire to get into investment banking in general, and London, Europe's financial centre, in particular, assumed that the euro area would rival America's capital markets for profitability. It hasn't quite turned out that way, and, as the American money evaporated, the banks that once outbid each other for scarce staff are left with huge costs and massive overcapacity. Some American banks are now talking about pulling out of London entirely: Goldman Sachs is the name most often churned out by the rumour mill.
The City's institutions now need to shrink. Properly costed, and without cross-subsidies, many businesses don't make money and never have. Who ever turned a profit on eurobonds? A few banks and fund-management firms will almost certainly exit the business—either willingly or unwillingly. Those that remain will replace the overpaid middle-aged with cheaper, younger staff. Which may not be so bad for those that have made enough money to retire on. Working for an investment bank is not much of a life.
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Тема: Death of a recruitment company
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Дата: 10.02.03
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Death of a recruitment company
Mark Fisher - 10 Feb 2003
'Dear Friends, Regretfully we have had to close the office.'
Thus another recruitment firm has disappeared.
This brief email, from William D'Arcy, was the only sign given last
week by his London search firm D'Arcy and Co to dozens of bankers and
other contacts that it is no more.
The email gave no further explanation. But a clue lay in the fact that
the firm specialised in corporate finance - not exactly the hottest
part of the recruitment market these days.
D'Arcy and Co, known at first as D'Arcy Durham, was set up in 1999.
D'Arcy, who ran the firm, earlier worked as a bond salesman for Lehman
Brothers, Bear Stearns and Credit Lyonnais.
D'Arcy said later that there was no business around and he had got fed
up of sitting by the phone waiting for it to ring. The last significant
work the firm had won was more than 18 months ago.
"Most of the headhunters I know are at their desks twiddling their
thumbs," he said. "If banks are hiring at all, they are often doing it
directly."
He said seven staff had lost their job through the closure. Most were
working again, but not in headhunting.
"I'm not sure what I'll do next," he said. "It could be TV production."
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Тема: Brokers hit as value of equity trading plummets
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| Автор:
sfhgshgsd
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Дата: 10.03.03
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Brokers hit as value of equity trading plummets
Sophie Brodie and Shanny Basar - 10 Mar 2003
Graphics
Changes in value of equity trading 2002-03
Brokerage firms have suffered a sharp drop in revenues from equity
trading in the first two months of the year, which could lead to further
job cuts in the industry.
One head of equities trading said: "Most investment banks are hoping
that this year is not similar to other years where the first three months
are the best. If that is the case everybody has too much headcount and
peripheral players will be forced to fold their tents and go home."
Another senior broker said the slump in business was likely to lead to
more consolidation in the market and the loss of further jobs.
The first quarter is traditionally the busiest for equity trading
because investors position their portfolios for the year ahead.
But according to data from the leading European and US exchanges, the
value of equity trading dropped by an average of 22.5% in January,
compared with a year ago, and was down by 29% in February.
Although the number of trades was slightly up on some of the exchanges,
it was down on others and the overall value of shares traded was well
down because of the fall in share prices. This has led to sharply lower
commission for brokerage firms.
The traditional long-only funds have been trading less frequently and
those that are still trading are paying more attention to their trading
costs.
Chris Hipkins, global head of cash equities trading at BNP Paribas,
said: "Post-Myners there has been an increased focus on market impact and
trading costs. This has resulted in client orders chopped up into
smaller and smaller parcels to reduce the impact in more volatile and less
liquid markets. Instead of a e1m order executed over 10 trades, there
may now be 20 or 30 trades and thus trade sizes have fallen
dramatically."
He does not see a short-term improvement in equity trading: "Going
forward after the war there will be odd bursts of activity but I am quite
negative in terms of volume. I remember the bear market between 1973 and
1975 and I fear we may need to wait for a new generation to see
investors with the courage to come back into the market."
However, Lee Cook, head of cash trading and sales trading at JP Morgan,
believed it was just a matter of time before investors return:
"Institutional investors are sitting on the sidelines with cash. Markets hate
uncertainty and once that has been removed we expect to see a wave of
demand for equities with money flowing rapidly back into the market."
Meanwhile, banks are forced to adapt to the seller's market. One trader
said: "Being cynical, if I was an equity salesman sitting on a trading
floor with my job under pressure and I go to a client saying buy a
certain company because it is going to come good, I am not going to get an
order. However, if I call and say I have heard some gossip that a
company is not doing well, then I am more likely to get an order and the
commission."
Brokers say the rise in automated trading by hedge funds and
proprietary trading desks is also having a negative impact on the profitability
of their equity trading businesses. Hedge funds and proprietary trading
desks have become an increasingly important part of the market.
Many use statistical trading systems where execution is automated and
they trade in high frequency in small blocks throughout the day. This
eats into the profitability of the business for the brokers as the number
of transactions increases, so do fixed fees per transaction paid to the
exchanges by the brokers. Brokers cannot pass on this extra cost to
their clients because they charge commission as a percentage fee on the
whole value of the order.
A senior broker said: "We are now in a 'show me' market. However
plausible the equity story, long-only funds are not buying shares and the odd
hedge fund is selling a few shares, but there is nobody on the other
side to provide support."
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Тема: Questionmarks hang over current buoyancy
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Дата: 12.02.03
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Questionmarks hang over current buoyancy
Applications by Della Bradshaw
Published: January 17 2003 18:42 | Last Updated: January 17 2003 18:42
Last year was undoubtedly a bumper year for business school applications, with both the number and the quality of applications rising. But every golden age eventually comes to an end.
Business schools now have two questions to answer: can the buoyancy continue, and if so for how long; and have they learnt the lessons of last year, when many schools were caught on the hop by the surge in applications?
Although it will take another month for most business schools to assess their applicant numbers for the incoming class of October 2003, it is clear there has been a levelling off of applications, if not a decrease. "I sense it will be down, by a little," predicts Rose Martinelli, director of admissions at the Wharton school at the University of Pennsylvania.
At Columbia, in New York, Jace Shinderman, associate dean, agrees. "I don't think any of us are going to see the surge in applications again, from people leaving dotcoms, for example."
Nonetheless, applications are still looking remarkably healthy compared with two or three years ago when a buoyant job market meant many managers felt they did not need an MBA to achieve rapid promotion.
That said, the abundance of applications has produced its own problems.
There is still the question of whether a surge in applications means a surge in the number of applicants, or whether each applicant is applying to more business schools.
It does not require a degree in mathematics to calculate that if students applied on average to three schools for entry in 2001 and five schools in 2002, then applications overall would go up by 67 per cent, though the number of applicants would remain static.
If last year was anything to go by, the answer would seem to be that a bit of both was happening.
"The applicant pool did go up with a lot of people who were in the process of being laid off or were afraid of being laid off," says Eric Weber, director of MBA programmes in Iese business school in Barcelona. "But there was also an increase in the number of people applying to more schools to make sure that they got into a school of choice."
This meant the very top schools were spoiled for choice when it came to selecting a class, but many lower-ranked schools found their yield rate - the percentage of students offered a place who joined - fell last year.
At Columbia in New York, for example, the yield rose from 69 per cent to 72 per cent, whereas at Iese the yield rate fell from just under 70 per cent to 66 per cent.
The difficulty for many schools was predicting who would accept a place, says Prof Weber. "The problems arose for schools that didn't manage their waiting list programmes. Usually things become clear in June but this year it was as late as July or early August before we knew what our class would look like."
Prof Weber says Iese took the airline industry approach to offers - over-admitting in the belief that some students would opt out. "We had such good applicants this year it would have been sad not to fill the class."
Other patterns have emerged. In the US, an increasing number of applications are being made early, says Ms Shinderman. She believes this front-loading of applications is partly caused by uncertainties in the job market specifically and in the world more generally. "When there are more options open, people can apply at the last minute."
The tight job market, combined with the threat of international terrorism, has thrown up other problems for MBA directors. The increasing globalisation of the business school industry, which has been one of the shaping forces over the past decade, has largely been put on hold.
With so many MBAs on the market, corporations are able to pick and choose and many are opting to choose those who are the easiest to employ - in the US this means US nationals, in Europe it means Europeans.
With national governments in both the US and Europe reconsidering the number of work visas they issue to foreign nationals, business schools are having increasing difficulties placing overseas students. The situation is particularly acute in the US, where the government has reduced the number of work visas for foreign nationals from 195,000 to 65,000 this year.
"If you're coming to business school [in the US] with the intent to work in the US long-term, you need to rethink your priorities," says Ms Martinelli. "We have to be very honest [with applicants] about what is the purpose of the MBA. It is about personal growth and overall training."
Looking further ahead there are clear signs that the applications pool will continue to decrease. Dave Wilson, president of the Graduate Management Admissions Council (GMAC), which administers the Graduate Management Admission Test (GMAT) entry exam for business schools, says he has seen a softening in the number of applicants in the second half of 2002. This may reduce the number of applications for the class of 2004.
The most likely reason is that those managers with jobs have decided to hold on to them and put off applying to business school.
So the heady days of huge applicant pools are drawing to a close. Business schools now need to prove they can manage the famine more efficiently than they did the feast.
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Тема: Schools look at ways to put their house in order
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Дата: 12.02.03
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Schools look at ways to put their house in order
By Della Bradshaw
Published: January 17 2003 18:42 | Last Updated: January 17 2003 18:42
In September 2002, Stanford professor Jeffrey Pfeffer caused uproar in the business school world by questioning whether business schools were delivering what MBA graduates and corporations wanted.
The article* from a professor at one of the world's top business schools brought sharply into focus many of the fears prevalent in US business schools, following one of the most disastrous years many faculty and staff there can remember.
Many were already beginning to question their values and modus operandi. What should business schools be teaching and how should they be teaching it? Such questions shook the bedrock of the business school world.
As the Enron and Worldcom scandals broke, many of the executives, it was revealed, were graduates from some of the biggest brand name business schools - most notably Jeff Skilling, Enron chief executive, from Harvard.
Graduating students, having spent two years and hundreds of thousands of dollars in getting an MBA, suddenly found the only job they could get, paid less than the one they had quit to go to business school in the first place.
Data collected for MBA2003, the FT's ranking of full-time MBA programmes, shows that last year nearly 12 per cent of graduates from the top 10 US schools were unemployed three months after graduation, compared with fewer than 8 per cent the previous year.
Moreover, uncertainty in world events has meant the globalisation of business schools, so prevalent over the past decade, has now been put on hold.
Can the US business school as it exists today continue to thrive? Like Prof Pfeffer, many US academics question this most basic of propositions.
Now is the time to rethink completely the way business schools work, says Robert Sullivan, who quit his job at the Kenan-Flagler school at the University of North Carolina at Chapel Hill at the end of the year to become the dean of the new school at the University of California, San Diego.
His views are not surprising, perhaps, given his task of creating a differentiated business school from scratch.
He is, nonetheless, one of the most thoughtful of business school deans. Nor is he the only one considering such issues - two of the top US business schools have already asked him in to speak to them on his views. "Top schools want to do the extraordinary, but it is hard for them to change," says Prof Sullivan.
Prof Sullivan questions the accepted wisdom that MBA applicants need seven years of prior work experience. And he questions the value of a two-year programme because of the opportunity cost.
Much of the structured learning that occupies the core courses of the first year of an MBA - business statistics, basic accounting, basic finance - can be learnt by using technology, he argues. "That's part of learning to learn." Classroom time should be spent teaching students to work in teams, to communicate and to persuade, he says. "This is where we would create the greatest value."
It will not be lost on European business schools that the move to a one-year model and to teaching "softer skills" in the classroom would bring the US MBA more in line with what has been happening in Europe for years.
He is not alone in believing that what is taught has to change. In Canada, Roger Martin, dean of the Rotman school at the University of Toronto, also holds strong views. "MBA education is fundamentally about model-chasing, identifying the model you have been given depending on the problem, as opposed to what it should be, model building - how to construct a model which is optimal for the situation."
Those MBAs who do well, he believes, are those who "can think across the pieces of the puzzle". He is optimistic. "I believe more and more that we can create a new generation of business education which is enormously valuable."
Amid all this turmoil, the big brand business schools are sticking to their guns. Patrick Harker, dean of the Wharton school at the University of Pennsylvania, consistently ranked number one in the Financial Times MBA rankings, is pursuing a back-to-basics policy.
"There is a call to return to the fundamentals," says Prof Harker, and he defends the traditional two-year model. "There are some things that are worth learning that are hard. Education is not information transfer: it takes time."
Dean Kim Clark says the Harvard MBA, number two in the FT rankings, has always been very close to business by design, and so any changes in business practice are "grist for the mill" in developing the MBA programme.
While he talks of technology and leadership skills as two planks of Harvard's ongoing development, he also cites issues of corporate governance and globalisation. In December Harvard opened its fifth international research centre in Tokyo the other four are in Paris, Hong Kong, Sa~o Paulo and Buenos Aires and this month Harvard faculty voted to develop a core course on Leadership Values and Corporate Responsibility.
Nor has Wharton buried its head in the sand. Faced with the prospect of unemployed graduates it is even considering using headhunters to get them jobs.
While business school staff regroup to react to the downturn in the economy, they find there are other areas where they have just as little influence, in particular US government decisions to restrict work visas for non-US nationals and student visas. Such moves could scupper US business schools' plans to become more international.
The concern is not just in the US. In Europe, too, several countries, such as Spain, have restricted work permits for non-EU nationals.
Just as in the US, European business schools are also having to deal with changes imposed by the economy and government. In particular, the European Union has ruled that all university education should be completely overhauled based on the batchelor and masters degree system prevalent in the UK and the US the European model frequently calls for undergraduates to study for five years. Potentially the MBA degree could develop the kind of influence in Europe that it has enjoyed in the US for the past fifty 50 years.
The European changes have to be implemented by 2010. Eight years from now it will be interesting to see whether business schools in both the US and Europe have changed as dramatically as many now predict, or whether the more things change around them, the more they stay the same.
*The End of Business Schools? Less Success Than Meets The Eye, by Jeffrey Pfeffer and Christina T Fong; Academy of Management Learning and Education; published September 2002
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Тема: Year-on-year JP Morgan's equity trading revenues fell 99%
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| Автор:
kljhkljhlkjh
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Дата: 12.03.03
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JP Morgan's US equities trading chief replaced
Jeremy Adams in New York - 12 Mar 2003
Carlos Hernandez
, head of US equities at JP Morgan
, has removed James Ancey as head of US cash equities and
sales-trading in the wake of poor results for the bank's trading business.
>
> Hernandez made his first senior change since taking on his role
earlier this year by replacing Ancey with Scott Harrington
> Sources close to the situation said that the move is part of a plan
to kick-start JP Morgan's disastrously-poor equity trading revenues. In
the last 6 months of 2002 JP Morgan lost $285m (> EUR> 258m) in equity
trading.
> Year-on-year JP Morgan's equity trading revenues fell 99% - returning
a net revenue of just $11m in 2002 compared with $1.2bn in 2001.
> Equity trading volumes are down across the board again this year,
pointing to another difficult quarter for the brokerage business. Dollar
trading volume on the New York Stock Exchange
was 22% lower in February 2003
than in the same month last year.
> Harrington joined JP Morgan from Credit Suisse First Boston
last year and
until now has overseen US equities sales-trading.
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Тема: Commute to Nowhere
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| Автор:
JONATHAN MAHLER
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Дата: 12.04.03
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Commute to Nowhere
April 13, 2003
By JONATHAN MAHLER
In the forest of khaki, heather gray and chambray that is
the Gap's store on Fifth Avenue and 54th Street, the
6-foot-4-inch Jeff Einstein is a walking, talking redwood.
The instant a potential customer breaches the invisible
border of his department, he approaches to offer
assistance. ''Too bad I'm not selling cars,'' he jokes with
one pear-shaped man after setting him up with a pair of
khakis -- 40-inch waist, cuffs, pleats -- in less than 15
seconds.
There's something self-conscious about Jeff's act, as if
he's trying to prove to himself that he's comfortable with
his job. Or maybe it's that he's overcompensating for
having been a bit slow to tell me about it a few weeks
earlier. (''I'm working in retail now,'' he had said
cryptically.) Either explanation makes sense. Jeff is not
your typical Gap salesman.
When his shift ends, we relocate to a nearby bar, and Jeff
tells me the story of landing the job. The Gap was gearing
up for the Christmas onslaught near the end of last year,
and he was summoned for a group interview. ''There were
about 20 people in the room,'' Jeff recalls, ''and each one
of us had to introduce ourselves and talk about our most
recent position. There was a cashier from McDonald's, a
woman who had worked at Baby Gap, a ticket collector from
Loews, a gift wrapper from Barnes & Noble. Then it came to
me. I said I used to be an executive vice president and a
director of interactive marketing for Rapp Digital, a
digital media company with 300 employees and a P. and L. of
$40 million.''
Jeff, who is 50, lost his job at Rapp Digital almost two
years ago, making him one of 21,000 computer-industry
professionals in New York City to have been let go since
the end of 2000. In percentage terms the numbers are even
starker. Between December 2000 and January 2003, the
industry slashed 41 percent of its positions.
While the recession of the early 90's took a heavy toll on
white-collar workers, this one seems to have
institutionalized the phenomenon. Advanced degrees, no
matter how prestigious, offer little protection. The
economy is grim nationwide, but the picture in New York
City is especially bleak. Since the end of 2000, the
media-and-communications sector has cut 15 percent of its
jobs, telecommunications 27 percent, advertising 25
percent. Eighteen percent of jobs on Wall Street have been
slashed, and firms continue to lay people off. Given the
delirium with which most high-tech jobs were first created,
there's no reason to believe that many of them -- and the
jobs in other sectors that they generated -- will come back
anytime soon.
By the numbers, women have been hit as hard as men, but
white-collar men tend to experience unemployment
differently, organizational psychologists say. For most
women, survival trumps ego; they simply adapt and find some
job. For men, grappling with joblessness inevitably entails
surrendering an idea of who they are -- or who others
thought they were.
A couple of weeks after we met at the Gap, Jeff Einstein is
in the kitchen making chicken cacciatore as his wife, Mara,
and I chat in the living room of their $2,200-a-month
two-bedroom apartment in Forest Hills, Queens. She's a
sturdy-looking, attractive woman, with chin-length curly
blond hair and high, wide cheekbones.
When she first met Jeff in 1997, Mara tells me, he was
living in the East Village and seamlessly moving from one
job to the next. Companies would hire him to dream up and
put in effect initiatives that would entice investors --
and then cut him and his high salary loose to appease those
investors. There was always another high-paying position
waiting. Whenever he switched jobs, a press release would
go out; inevitably, his name would be prefaced by three
words: ''interactive industry pioneer.''
Jeff discovered his passion for computers relatively late
in life; until then, he was always something of an
underachiever. He grew up near San Francisco in the 1960's
and never graduated from college, opting to move to Israel
instead. After several years there, he returned to the
United States and knocked around from job to job for a
while.
In 1983, at the age of 31, he found himself working at an
ad agency in New York. One day, out of boredom mostly, Jeff
picked up a computer manual and started reading. He found
it incomprehensible. A few weeks later, he pitched a series
of books to Harcourt that would be called Einstein's
Computer Guides -- one of the first how-to books for
personal computers. The publisher had only one question for
him: Is your name really Einstein? He got the deal and flew
out to California to pick up a free demo from Apple. While
he was there, he went skiing in Lake Tahoe with a few of
Apple's founders. For the next 15 years, Jeff had the rare
experience of being exactly the right person for the right
time.
After his computer guides were published, he was hired to
install a PC network in American Airlines' club lounges
that would offer financial information and e-commerce
(though the term did not yet exist) to business travelers.
He quickly realized that the network's real value was as an
advertising vehicle and founded, with Jay Sandom, what
industry experts consider the first interactive ad agency,
Einstein & Sandom Inc.
Jeff was already an Internet crusader when the recession
hit in the early 90's. He was convinced that as soon as the
rain stopped and the sun broke through the clouds, a new
industry would flower.
He was, of course, correct. And so by the time Jeff met
Mara, in 1997, he was a wizened rock star, the Mick Jagger
of digital media.
Mara remembers going with him to an ''industry event'' --
those bygone giddy get-togethers of Internet evangelists --
and bumping into an old friend. Her friend asked what Mara
was doing there. ''When I told him I was with Jeff
Einstein,'' Mara recalls, ''he couldn't believe it.''
They were married in 1998. Mara had an M.B.A. and was
working in marketing at NBC. She also enrolled in a Ph.D.
program in media studies at New York University and later
quit her job to write her dissertation. Soon after, when
she became pregnant, Jeff figured it was time to settle
down. The job at Rapp Digital seemed as secure as they
come; his old partner and best friend, Jay Sandom, was
president, and Jeff was on the company's operating board.
''I thought I was selling out when I joined Rapp Digital,''
he says. ''We didn't even have any dot-com clients. Our
clients were companies like Enron.''
Not long after Jeff started, Rapp Digital's parent company,
Omnicom, instituted a policy requiring every branch to show
a 20 percent profit, which was out of the realm of
possibility for his New York office. Jeff survived the
first round of cuts, but not the second. He was laid off in
May 2001.
Jeff figured an offer would arrive shortly after his name
started circulating, maybe not as quickly as they had in
the past, but he had three months of severance -- plenty,
he thought, to get him to his next position. The three
months went by, then four, then five, then six. His name
was out there, but no offers were forthcoming. Jeff was
periodically checking job boards like Monster.com, but he
rarely saw postings that looked senior enough. Mostly he
was hanging around the house like a moody teenager,
checking his e-mail, surfing the Internet, playing the
guitar.
Mara wanted to be understanding. ''I promised myself I
wasn't going to give him any ultimatums,'' she says.
Instead, she took on more work. She secured a publisher for
her dissertation and took a tenure-track position at Queens
College. She also piled on the part-time teaching and
consulting jobs, pushing her income up to $80,000 a year.
We've finished dinner now, and Jeff has gone into the other
room to play with their 3-year-old daughter, Cayla, leaving
Mara and me alone at the table.
As the months passed, she tells me, her patience started to
wear thin. In May 2002, her father died of leukemia. That
month also marked the anniversary of Jeff's unemployment.
''Once it hits a year,'' she says, ''there's no reason to
believe it's going to be any better this time next year.''
By that point, things at home were strained. ''A lot of
people were telling me that if their husband wasn't working
for this long they'd throw him out of the house,'' Mara
says. ''I was starting to think, Am I an idiot for putting
up with this?''
Jeff became depressed and withdrew. Mara, resentful that
she couldn't talk about her job without risking making Jeff
feel worse, pulled back, too. They spoke only rarely, Jeff
says, and stopped having sex altogether.
By the summer, she was just about out of sympathy. ''He was
like a retired person,'' Mara says. ''I couldn't stand
it.'' She wanted him to do something, anything. One day,
over a cheese omelet and Belgian waffles at the diner
around the corner from their apartment, she begged him to
at least do some volunteer work, whatever it took to get
out of the house. But he never did.
Jeff is back at the table now, but Mara seems to have
scarcely noticed. She continues to speak freely about his
unemployment and its toll on their relationship. Jeff
occasionally nods in agreement. Once toxic, the subject now
couldn't feel more benign.
In September, Mara says, Jeff agreed to go into therapy.
They also started couples' counseling. Two months later,
she did what she had vowed never to do: ''I told him that
come Feb. 1, if you're not contributing to the rent, you
have to move out.''
Now, working at the Gap at $10 an hour, it takes Jeff two
and a half weeks to earn what he used to make in a day at
Rapp Digital, where his annual salary was $300,000
(including bonuses but excluding stock options). But he and
Mara are still together, and after ''the
year-and-a-half-long process of dehumanization,'' as Jeff
calls it, he's happy to have any job. ''It keeps me out of
my head,'' he says, ''which is a bad neighborhood to be in
right now.''
When the technology industry blossomed in the late 90's,
creating hundreds of thousands of jobs that seemed to
promise boundless prosperity, you didn't have to be a
daydreamer to be intoxicated by the scent.
In 1999, Lou Casagrande, a graduate of Brown University
with a Ph.D. in chemistry from Stanford and an M.B.A. from
Long Island University, quit his job as a scientist at
Northrop Grumman to take a position as an
information-technology consultant in Warren, N.J. Lou and
his wife, Janet, found a four-bedroom Colonial in nearby
Summit with a big backyard that would allow them to expand
and still have room in back for their three kids. The
mortgage was a stretch. At his salary of $100,000 a year,
the roughly $2,700 monthly payment represented 45 percent
of his take-home pay. But, as Lou says, ''at that time, I
was imagining an ever-increasing salary, ever-increasing
stock options and all those wonderful things.''
It's a sunny afternoon, and I'm sitting with Lou and Janet
in the small living room of their white-shingled house on a
quiet street talking about how they're managing. Lou was
laid off in June 2001. At the time, he figured he'd be out
three to six months tops. Twenty-two months later, he's
still looking.
When G.D.P. growth resumed in the fourth quarter of 2001,
Lou, like many economists, figured the worst was over. More
than a year later, the unemployment picture for all workers
remains bleak. Nationwide, more jobs were lost last
February than in any single month since November 2001. We
are in the worst hiring slump in 20 years.
Lou, at 43 a fit 5-foot-9 with a prominent nose and wiry
dark hair that's quickly disappearing from the top of his
head, sits on a couch next to me. Janet, who has long,
straight red hair and hazel eyes, is in a chair across from
us. She has made rugelach and coffee. Every 20 minutes or
so she gets up to quiet their three kids, who are in an
adjacent playroom littered with coloring books and Pokemon
cards. Whenever she returns, she flashes Lou a smile.
Janet and Lou met through a ski club in 1989; Janet got a
little drunk at lunch on a weekend trip to Vermont, and
Lou, who was fresh out of Stanford, took care of her on the
mountain. ''I liked that Lou was active and that he wasn't
judgmental at all,'' Janet says.
A year later they were married and living in an apartment
in Middle Village, Queens. They saved up and bought a house
on Long Island but were soon dreaming of moving to northern
New Jersey, where most of their friends from Queens had
ended up.
Now, the absence of tension between them is striking,
especially given the dire state of the family finances. The
Casagrandes ran through their long-term savings several
months ago and are now well into the college funds --
accounts that Janet's father started for each child after
birth. ''That should last about another two to three
months,'' Lou says. If he still hasn't landed a job by
then, he and Janet will be forced to raid their 401(k).
The Summit house is their biggest source of both anxiety
and comfort. They have considered downgrading to something
smaller or perhaps even selling and renting. But their
house is already pretty modest by Summit standards, and a
rental big enough for the five of them isn't likely to cost
much less than their mortgage. ''With everything that the
kids are already dealing with,'' Lou says, ''we really
don't want to move out of Summit.''
The whole conversation is surprisingly matter-of-fact.
Lou's job loss, it seems, has merely created a series of
practical challenges.
''One of the first things we did,'' Janet says, ''is cut
off the kids' allowances'' -- a savings of $6 a week. The
Casagrandes also registered all three children for a
state-subsidized school lunch program.
When Lou's unemployment benefits, which came to $890 every
two weeks, expired last summer -- they had already been
extended twice, once by the federal government and once by
the state of New Jersey -- he put up fliers around town
advertising his software-installation services. He has had
six clients for a total of about 20 hours, less than
$1,000.
Last fall, Lou started substitute teaching. The pay is $90
a day, but work is sporadic, particularly because Lou is
limited to the Summit schools by the fact that the
Casagrandes are down to one car, a 1995 Subaru. Their
second car would not have passed its 2001 inspection
without repair work they couldn't afford, so they gave it
away and took the tax deduction instead.
Lou has also been teaching a spinning class at the local
Y.M.C.A. for several months now. At $12 an hour, the money
isn't great, but as a part-time employee of the Y, he only
pays $100 a year for a family membership. There's another
hidden benefit, too. ''Believe it or not,'' he says,
''being in front of the group keeps up my confidence in my
ability to make the kinds of corporate presentations I've
made in the past and that I anticipate making again in the
future.''
A light snow is falling on the Wednesday evening when I go
to pick up Lou's wife, Janet, from the Starbucks in a strip
mall in Florham Park, N.J. In addition to teaching at a
Montessori preschool, Janet now makes lattes. She's one of
four women at her Starbucks alone who are working there
because their husbands have been laid off. The appeal is
obvious: though the pay is just $8 an hour, she needs to
log only 20 hours a week to qualify for the company's
health-care plan. The Casagrandes, a family of five, pay
just $220 a month; Lou's Cobra, which would have expired by
now anyway, was costing them close to $800.
Janet has become adept at spotting nametags of companies
that might make an appropriate employer for her husband. A
few minutes after I arrive, she points out a small table of
professionals. ''They come in every day at 5,'' she tells
me as she looks around for a particularly
successful-looking middle-aged businessman who recently
joined the group. ''I haven't had the right moment yet to
approach him about Lou,'' she says, ''but I will.''
Matthew, their middle son, just turned 8, and Janet tells
me that he wanted a party, even if it had to be small.
Janet's parents sent enough money for him to invite eight
friends. Janet baked cupcakes with frosting in the shape of
cobwebs and found a few Spider-Man-themed games on the
Internet that they could play with string and paper plates.
They had enough cash left over from the money Lou's parents
gave them for the children's Christmas presents to buy
Matthew a $20 skateboard.
Janet has been anything but shy about asking for help. She
persuaded the Y to waive the extra fee for the kids' weekly
karate class, and her most recent coup was getting the
local Girl Scouts chapter to excuse Leah, who is 10, from
paying $185 to go on a camping trip to the Poconos.
On occasion, help arrives unsolicited. This past Christmas,
Janet's Montessori school made a donation to the Casagrande
family rather than to a charity, the school's usual custom.
And for a period of about six months, Lou and Janet were
receiving $20 in cash in the mail every so often in an
envelope without a return address. ''I think it was one of
the college girls who used to work at Starbucks with me,''
Janet says, ''but she's gone now, and I was never able to
be sure.''
A couple of weeks ago, Janet tells me later as we pull into
the parking lot of the Y to meet Lou, Matthew asked her to
cut his hair.
''Don't you want to go the barber?'' Janet asked.
''But
we can save money if you do it,'' Matthew answered.
Tom Pyle has the kind of background that's supposed to
prevent this sort of thing from happening. Hotchkiss,
Princeton, Harvard Business School -- he was, as he puts
it, ''programmed to be a world-beater.''
A trim, compact man of 50 with a thin wisp of hair near the
front of his otherwise smooth head, Tom is very much a
creature of the old economy. Even without an office, he
wears Brooks Brothers and Burberrys and carries a suitably
distressed leather briefcase wherever he goes. He speaks
thoughtfully and deliberately and often clasps his hands
together, interlacing his fingers, when he's making a
point.
During the late 90's, Tom took the 5:57 a.m. from Princeton
Junction to Penn Station and went to work as a financial
director at a Swedish bank, where he earned about $200,000
a year. He paid off the mortgage on his four-bedroom ranch
house in Princeton, socked away enough money to send both
of his children to the private college of their choosing,
gave his wife whatever money she needed to run the
household and invested the rest in the stock market. If
anyone had safeguarded himself against the vagaries of the
future, it was Tom Pyle.
At the end of 2001, Tom took a position as the director of
development at the United States Rowing Association. The
$100,000 (including incentives) salary was low, but Tom
considered it a long-term investment. Banking was a young
man's game; he could grow old in the nonprofit sector.
Unlike most out-of-work professionals, who watched
anxiously as their employers' flow of business slowed to a
trickle, Tom never saw it coming. Six months after he
started -- and three nights after his boss had taken him
out to dinner to tell him how well everything was going --
a major sponsor abruptly withdrew its financing. For the
first time in his life, Tom was terminated.
''I was stunned,'' he tells me one evening last month.
We're sitting at the Pyles' kitchen table in Princeton as
Tom's wife, Molly, dishes out chicken curry, rice and
salad, all of which was prepared and ready to serve when I
arrived. Molly is Chinese but grew up in London. When she
entered her 20's, her father sent her back home to
Singapore in the hope that she'd marry a Chinese man.
Instead, she married Tom, who was working in Asia at the
time. She has been a stay-at-home mom -- in her words, ''a
spoiled banker's wife'' -- ever since.
After we begin eating, the Pyles' 17-year-old son, Adam, a
stringy senior at Princeton High with dark eyes and a thick
shock of black hair, silently stalks in. As he shovels down
a plate full of curry, his father explains that I'm writing
an article about executives in transition. Adam refills,
eats a second plate clean and then excuses himself without
uttering a word.
The scene is reassuringly timeless. The weeknight dinner in
the snow-encrusted suburbs, complete with the brooding
teenager, the well-organized mother and the father in a
starched button-down. The difference tonight, and every
night for nearly a year, is that the father hasn't just
returned home from a hard day at work.
That's likely to be the case for the foreseeable future. As
James Parrott, the chief economist for the Fiscal Policy
Institute, a nonprofit economic-policy group, says,
''There's no rebound in sight, and there aren't even the
glimmers of developments that would lead you to predict a
rebound.'' That the current situation in Iraq has been
accompanied by fears of a terrorist attack on New York and
other cities has only further darkened the employment
horizon.
''I love traveling, and I don't do that anymore,'' Molly
tells me, ''and for groceries, I go to Sam's Club instead
of the local market, which is very expensive.'' She hasn't
bought any new clothing in months, or at least nothing that
she didn't guiltily return the next day. ''I'm thinking
about working,'' she says. ''I never thought I'd work in
America.''
This last suggestion clearly irks Tom. ''She says that
because she feels that things are worse than they really
are,'' he says.
With the house paid off and the college tuitions protected,
the Pyles are by no means in financial distress. Still, as
Tom puts it a few minutes later: ''Economic reality is not
the final arbiter of domestic tranquillity.''
It soon becomes clear that one of the biggest obstacles to
domestic tranquillity is proximity.
''It's terrible,'' Molly says. ''My husband is always in
the house.''
Seemingly a bit surprised by his wife's bluntness, Tom
tries to soften the edge. ''The traditional rhythm is that
it's her abode,'' he says.
Tom hasn't adjusted to being around the house so much
himself. ''I'm not used to being on demand to solve family
problems,'' he says.
He's also not used to having his wife look over his
shoulder as he does his job -- which, in this case, is
looking for a job, a task Tom approaches with considerable
gusto, obsessively checking job postings, going on
informational interviews, making networking phone calls.
To Molly, those phone calls can sound suspiciously like
personal calls, which she doesn't hesitate to tell him. She
also remains unconvinced that his various networking
meetings -- he goes to an average of two a week -- are
helping the cause much, and when she learned how much Tom
was paying a career counselor, she urged him to stop. He
reluctantly conceded, although he was only partway through
the program. ''Spouses,'' Tom tells me later with an
affectionate half-grin, ''should not run job campaigns.
They're not good advisers.''
While there's no good time to lose your job, Tom's timing
was especially bad: it happened the same month that their
investment manager incorrectly predicted that the market
had bottomed out. Molly, who'd never had any reason to
examine the portfolio in the past, learned about this
unfortunate event when she went to draw some money from the
account for basic household items -- things that Tom's
regular paychecks had always covered. She didn't sleep for
weeks afterward.
''We lost a lot of money in the stock market,'' Molly says.
''A lot.''
''It's a matter of perception,'' says Tom. ''Everybody took
a big hit.''
''Excuse me,'' says Molly, getting up to serve us seconds,
''but I do know how much money we lost.''
It's a conversation that has no doubt played itself out at
countless dinner tables across the country over the past
two years. Tom's right; except for a very lucky few,
everyone has taken a big hit. Still, he's in an impossible
position. From his conciliatory tone it's clear that he
doesn't want to continue the argument. At the same time, he
knows that if he can bring her around to his way of
thinking, she might actually feel less anxious.
Later, when Tom and I are alone, he tries to put the
discussion into context. He doesn't resent Molly for
getting so worked up; on the contrary, he feels guilty.
''She wants stability and certainty, which every woman
deserves,'' he says. ''She held up her end of the deal,
taking care of the house and kids, and she deserves a good
life from here on out.''
Only twice in two years has Lou Casagrande felt he was even
close to getting a job. Once, a little less than a year
ago, he was confident enough to take his wife and kids out
to a Chinese restaurant for chicken and cashews to
celebrate, their first family dinner out since he'd been
laid off. Then the prospective employer, which does
scientific product development for the semiconductor
industry, fell on hard times. Not only did the offer fail
to materialize; Lou never heard from the company again.
When Lou first lost his job, his plan was to get into
investment banking, probably as an analyst, and he had a
few friends from Brown helping him out. Then came Sept. 11.
With the prospects on Wall Street looking dimmer than ever,
Lou decided to refocus his search on pharmaceutical
companies. But the fact that his Ph.D. was in physical
chemistry, not organic, proved too much of a liability even
to getting his foot in the door.
Now, in order to keep himself circulating, Lou, like so
many of the white-collar unemployed, goes to networking
meetings. Every Monday night he commutes into Manhattan for
the weekly gathering of a career-counseling group called
the Five O'Clock Club. On the third floor of a Helmsley
hotel, he joins dozens of others, a number of whom earned
six-figure salaries in their last jobs. For someone at
Lou's salary level -- or previous salary level, anyway -- a
package of 10 sessions costs $600. (He re-upped after
running through his initial 10 and is now what's known as
''an advanced member.'')
One night recently, Lou attended a monthly mixer sponsored
by an online networking group called Ryze.com. Pronounced
''rise,'' the group describes its mission as ''helping each
other 'rise up.''' Basic membership is free; a ''Gold''
membership, which entitles you to discounts at mixers and
an early peek at the bios of those who are planning to
attend, is $9.95 a month.
Lou, a basic member for the moment, pays $10 at the door of
the Chateau, a dark, smoky lounge in the West Village that
Ryze.com has rented for the evening. Once inside, he is
given a thin strip of paper with thumbnail-size head shots
and minibiographies of four randomly selected people whom
he is supposed to seek out and meet over the course of the
night, an icebreaker for those who require an excuse to
approach a total stranger. Lou is shy by nature and
uncomfortable with the idea of self-promotion -- ''I was
always taught to let your work speak for itself,'' he says
-- but he has been out of work for too long to need any
pushing. He stuffs the dance card in his pocket and begins
to network. He's the only man in the room wearing a tie.
Over the next two hours Lou meets two self-employed Web
designers who want to design his Web page, a video producer
who creates two-minute CD-ROM video resumes of job
applicants for $1,000 and a man named David Schmier, the
head of a career-counseling firm called GetHired.com.
''If you want to learn a language, you go to Berlitz,''
Schmier tells Lou. ''If you want to ace your LSAT's, you go
to Kaplan. If you want to find a job, you come to us.''
Schmier extends his hand.
Like a sprawling refugee camp, the land of the unemployed
has spawned a whole new economy. Resume-writing services
will punch up your resume; resume-blasting services will
send it on to thousands of companies. Even Monster.com, the
closest thing to an Elysian fields for the jobless,
benefits from people looking for -- not finding -- jobs.
The company's revenue model is based on their advertising
space, which is considered valuable because surfers post
their resumes and then click on them compulsively to see if
any potential employers have checked them out.
And then there are people like Schmier, who was laid off
last May as the director of interactive marketing for AOL.
Now, like seemingly half the people in this room, he is
trying his hand at selling services to the unemployed.
''GetHired,'' he explains, ''is not a career-counseling
firm; it's a job-finding system.''
Schmier starts by laying out his networking philosophy for
Lou. ''If I'm trying to get a meeting with someone, I don't
tell him I'm planning to hit him up for job leads,'' he
says. ''I go out of my way to tell him that I'm not going
to. After the meeting,'' Schmier continues, ''I'll send him
something, like an extra ticket to a trade show. A couple
weeks later I'll send him something else, maybe a book
that's relevant to his work -- not a new copy, but one I've
spilled some coffee on, dogeared and underlined.''
It sounds a lot like dating advice from Mike Damone in
''Fast Times at Ridgemont High.''
Schmier waits a beat and then looks right at Lou. ''When I
call you again, are you gonna take my call?'' he asks
rhetorically.
Leaning in a little closer, he proclaims: ''Be a giver, not
a taker. Be a matcher, not a seller.'' Then he says: ''How
do you match yourself with a company? By learning its
tribal symbols and presenting yourself as a member of the
tribe.''
He proceeds to illustrate this point by telling the story
of how he was hired at AOL, an approach that could probably
get someone arrested today. Schmier started by hanging
around outside the company's headquarters eavesdropping on
the smokers, then somehow scamming his way into the
building in order to get a look at how the people in the
department he wanted to work in dressed. Later, he set up
shop at
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Тема: Hard Days and Sleepless Nights for Private Equity Firms
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| Автор:
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Дата: 13.02.03
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Hard Days and Sleepless Nights for Private Equity Firms
Today’s business environment is similar in ways to the early 1990s when private equity firms rose up to restructure mountains of bad debt and went on to cash out in the ensuing bull market.
But while opportunities are out there, it is harder to make deals work than it was a decade ago, according to two leading private equity players who participated in Wharton’s annual private equity conference held Jan. 24.
Leon Black, founding partner of Apollo Management, L.P., and Lawrence Schloss, global head of the private equity group at Credit Suisse First Boston, both agreed that today’s tough times may lead to big rewards for those able to weather the financial and geopolitical hurdles weighing on markets today.
“Availability of Capital Is Incredibly Scarce”
Black, former co-head of the corporate finance department at Drexel Burnham Lambert, founded Apollo in 1990 after Drexel collapsed. Apollo quickly became a pioneer in buying and restructuring distressed debt. The company has since invested about $14 billion in corporations, $3.5 billion in real estate and several billion in capital markets.
“I spent 13 years at Drexel. The first 12 were like a rocket ship going onward and upward and the last was an absolute nightmare which ended in a real crash and burn,” he said. “When we founded Apollo the environment was actually fairly similar to today.”
Black said his father, a rabbi who later became a businessman, taught him that careful study and debate should precede decision-making. He took that approach to evaluating investments at Apollo. But Black also said Apollo benefited in its early days from strong backing by Credit Lyonnais, which had built relationships with Apollo’s founders at Drexel. While he used to think that success was primarily the result of hard work and reasoned decision-making, “I’ve learned with the luxury of middle age …to have great respect for the benefit of experience and just plain good luck.”
Black said the current business environment leaves him sleepless for two completely different reasons. As the manager of a portfolio with 20 investments, he is kept awake by frustration and aggravation with the economy. But as the custodian of $3.8 billion in uninvested fund dollars, he said he lays awake buoyed by excitement and a hunger for promising new deals.
Three of his portfolio companies are currently performing below expectations and need new capital, Black noted, while six are performing better than expected. The rest are doing well, “but either their stock price or their private valuation is underwater and don’t reflect the value we recognize, and there is little chance of exit until there is an overall improvement in the economy.”
From 1990 to 1992 Apollo invested $2.5 billion in troubled companies “because we viewed distressed opportunities as far and away the best risk-reward game. At that time most private equity firms sat on their hands because they did not want to play in an arena where they would be buying securities without absolute control from day one.” Today, he said, there is less capital available than when he was starting out.
Black emphasized the importance of financial engineering in his firm’s business. “Many of the organizations competing to occupy the same space as Apollo downplay financial engineering. One cannot ignore the importance of managing the balance sheet … I don’t mean in lieu of an operating focus. I mean in addition to it.”
He would prefer to do classic leveraged buyouts or corporate partnerships, but today – as in the early 1990s – opportunity lies in distressed debt.
Apollo’s investment policy has always been geared to cash flow, he added, so it was not wrapped up in the enthusiasm for telecom and tech companies. “We believe companies without cash flow are almost impossible to restructure.” Apollo won’t consider investing in companies that are so large that Apollo’s capital would have no influence or so small that the company would not have an impact in its markets.
Today private equity investing is marked by little liquidity and low prices. The consolidation of the U.S. banking industry since Black created Apollo leaves far fewer lenders; meanwhile Japanese banks are not the force they were in 1990. As a result private equity firms need to put more capital at risk in deals – or about 40% of transactions in 2002 compared to 30% in 1995 and 10% in 1988, said Black.
The main difference in today’s market is that most of the debt is owned by banks rather than the high-yield, or junk, bonds that were so closely associated with Drexel. Even though bank loan rates are low, Black pointed out, that does not help his company put together deals because banks are seeking greater equity participation. “The good news is that rates are lower. The bad news – which is more relevant – is the availability of capital is incredibly scarce today.”
According to Black, banks were once willing to lend private equity firms 3.5 times cash flow to invest in companies. Now, they want 5.5 times cash flow. To get some deals done, private equity firms have teamed together and pooled their capital, although Black remains guarded about that approach.
Many of the players in private equity remain the same as in the early 1990s, he added. Most buyers of distressed debt are hedge funds out to buy a security at 40 or 50 cents on the dollar and flip it for 70 cents on the dollar. “That’s not a bad business in the right environment. Very few want to play the catalytic role of really taking control of companies.”
In the early 1990s, he said, there were hundreds of potential investment prospects. Today, with a market overhang of half a trillion in distressed securities, there are even more companies to consider, but their quality is lower than a decade ago. “Today the numbers are even greater, but you really have to sift through them a lot more carefully since at least a third of them are telecom companies and high-tech companies that really don’t have a reason to exist at the end of the day.”
Finally, Black said, Apollo is beginning to make investments abroad. Previously the availability of deals in the United States and the complexity of restructuring bad debt in countries with different legal and accounting standards – not to mention language barriers – had kept the company at home. But in the past five years, Apollo’s real estate wing has put about a third of its capital into European investments and is now considering buying opportunities in Japan.
On the corporate side, Apollo recently took control of a German cable company and is considering two other European deals. “I would say for the first time there is a nascent distressed market emerging in Europe which is getting pretty interesting,” Black said. “We’re dipping a few small toes in over there.”
New Focus on Europe
Lawrence Schloss, managing director of Credit Suisse First Boston and global head of its private equity group in New York, also noted similarities between today’s private equity market and that of the early 1990s. But he, too, said today’s climate is even tougher. “People are relearning again that there are business cycles.”
Schloss outlined major business and economic trends driving today’s markets including the fall of Communism, deregulation, globalization, diminished pricing power, industry consolidation, interconnectedness of global capital, and new technology and its impact on productivity. In addition, the creation of the euro is poised to play a big part in capital markets.
“I can’t tell you how complex it used to be to deal with each country with all their taxes and all their rules,” he said. “The euro smoothes things out and when you smooth things out you discover these guys are completely inefficient. The euro will ripple through the economy for the next 10 years.”
In addition to these economic forces, there are geopolitical issues that are bound to have an impact on private equity markets, Schloss noted. At the top of that list is Iraq. “Iraq is today’s thing to worry about but there is still a huge problem in the Middle East. People are petrified about another terrorist attack.”
Other global concerns include a growing divide between the United States and Europe and rising anti-U.S. sentiment that could lead to harmful protectionist policies. Schloss said Japan continues to be a drag on the global economy and Russia will rise to become a growing force. Finally, there is North Korea. “Markets don’t like it when somebody says, ‘I have a nuclear bomb and it’s pointed at you.’”
At home, Schloss said the Republican majority in Congress will push to cut taxes and increase spending in an attempt to turn the economy around, but those policies could have a long-term impact on the nation’s debt. As if that weren’t enough to digest, markets have been hurt by a loss of investor confidence fueled by the stock market decline that has wiped out $6 trillion in equity and corporate scandals. “People don’t like what they see. Someone lost $6 trillion and they’re pretty mad about it.”
Against this backdrop private equity investments have some strengths, said Schloss. First, the industry has knowledgeable accountants and would not be caught up in the irregularities that occurred at publicly held companies. Second, private equity firms can align themselves with management so that executives are clearly concentrated on investors’ best interests: “Everyone is focused on the mission and the mission is to make money.”
Third, with a credit-crunch limiting bank lending, private equity now has a better chance of getting access to attractive deals. And venture capitalists no longer present much competition. “The VC guys are beside themselves. They had too much in technology,” he said.
Schloss predicted private equity investment will continue to focus more intensely on Europe. In 1998, Europe accounted for 21% of all buyout transactions. In 2002, he said, 62% of the deals were done in Europe.
With the stock market stagnant and the appetite for initial public offerings nonexistent, companies will look to private equity firms for financing. He said he has become noticeably more popular in recent months. “The private equity guys have the money,” he told the conference, which included students and private equity managers. “You’ve got the money. You’ve got the vision. You’re ready to go. In these kinds of markets, being focused and having people ready to go is a great thing.”
Lower interest rates have helped support consumer spending and that, in turn, has kept the economy running stronger than might be expected, he noted. A the same time, uncertainty about Iraq and other global issues is creating hesitancy in the broader economy. “In 2002 there was so much bad news, so many macro issues, that as a manager you could not figure out if you should build a new plant or make any hires. So nothing happens. Nothing is not good for the economy.”
While Schloss said the default rate on corporate debt is high, he forecast that the worst is over, adding, however, that while the broad stock indexes have been down for three years in a row, share prices could still be considered high.
The financial problems of the last few years have, not surprisingly, led to pressure on private equity managers from their limited partners. “If you wandered and let your mind stray into tech and telecom, you’re just embarrassed,” he said. Limited partners are somewhat more understanding about bad investments in industrial companies.
With the public markets shut down, investors now have no way to exit from their private equity plays, extending their partners’ holding time: “The longer you hold a private business the harder it is to focus on the mission and there is more uncertainty. Private equity is harder than it used to be.”
He said capital flows into private equity could be constricted in the future as large funds with losses in the public markets need to reduce their private positions to maintain their stated asset-allocation mix.
Turning back to the economy, Schloss said that while the consumer remains strong, in part due to moderate unemployment rates, there is now little pent-up demand for housing. He predicted continued disappointing corporate earnings and, with industrial capacity at only 75%, there is little cause to expect expansion in that sector.
But uncertainty creates opportunity for private equity firms, said Schloss, reminding his audience that investments made during the low-point in the economic cycle in early 1990s were primed for big payoffs later. “Most private equity guys spent the last two years getting their portfolios in order. They’re starting to pick their heads up.
“People are going to make some great investments,” Schloss predicted, “and they’re going to make a lot of money two or three years from now.”
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Тема: Banking exodus gathers pace
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| Автор:
Mark Fisher
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Дата: 14.04.03
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Banking exodus gathers pace
Mark Fisher
14 Apr 2003
Two-thirds of banking staff made redundant in the City of London leave
the financial services industry, a survey by Penna, the outplacement
consultant, shows.
Many departees join non-financial companies, while others take
not-for-profit or government jobs. Some set up consultancies, take exams,
travel or retire.
A Penna spokesman said: "It's mainly because of the lack of jobs in
financial services, but also because bankers discover they can do other
things."
The survey is based on 2,300 London financial services staff across all
sectors who were advised by Penna in 2002. The year before, just over
half left the industry for pastures new.
Penna said directors and managing directors are more likely than junior
staff to quit the City.
Other outplacement firms agree the exodus from the Square Mile is
gathering pace, although their figures are lower than Penna's. BG Careers
and Fairplace said 40% of staff do not return to City jobs.
The tendency to change direction is more noticeable in some sectors.
Philip Beddows, a director of BG Careers, said 90% of one redundant
corporate finance team moved into jobs outside their speciality, while the
figure for an equities team was 70%.
Brian Hamill, chief executive of search firm Imprint, said companies in
the telecoms and other industries are hiring investment bankers in
their late 20s and early 30s to carry out restructurings.
Penna said 71% of redundant staff found new jobs in 16 weeks.
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Тема: Banks scale back campus recruiting
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| Автор:
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Дата: 15.02.03
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Banks scale back campus recruiting
Sarah Butcher
3 Dec 2002
It is harder than ever for young people to begin a career in investment banking.
A survey by GTI, a careers information company, found that the number of full-time vacancies for graduates joining investment banks in London in 2002 fell nearly 11% from 2001.
The cut was matched by a 23% rise in the number of applicants per vacancy. In 2002 there were 23 graduate candidates chasing every investment banking job.
Jobs were still available; the banks surveyed said they hired an average of 98 graduate trainees each.
Many have said that they recruited in 2002 in all the traditional areas, including fixed income, equities, corporate finance and IT.
But the figures suggested that investment banks were cutting back more than most employers. In a survey in May, the Association of Graduate Recruiters found that graduate vacancies for 2002 across all UK companies were expected to be down only 6.5%.
Graduate hiring is expected to be lower again in 2003. Vivienne Dykstra, head of graduate recruitment at Deutsche Bank, said hiring across the industry was likely to be down by a further 20%-30% next year.
She estimated that investments banks' 2003 graduate hiring would be as much as 40% lower than it was at the peak of the cycle in 2000.
Many graduate positions for autumn 2003 have already been given to promising undergraduates who did internships in banks last summer. The head of graduate recruitment at one US bank, which usually takes more than 100 graduate recruits, said that summer interns have taken all but 5 places for 2003.
CSFB has been telling undergraduates that it currently has no vacancies for next autumn. Places at CSFB are understood to have already been allocated to summer interns and to graduates who had been due to join this autumn, but deferred entry for a year while being paid part of their starting salary.
In this environment, some graduates are becoming more wary about an investment banking career. Yazann Rohami, head of the students' Investment Club at Cambridge University, said attendance at banks' recruiting events was markedly lower this term than in previous autumn milkrounds.
"Today it is the Procter and Gamble and Foreign Office events that are attracting all the people," said Rohami.
Nevertheless, graduates remain keen to apply to top firms. Rohami said Goldman Sachs' Cambridge presentation was 'packed out'.
Some banks have taken advantage of the hiring slowdown to sharpen their recruitment criteria. The Royal Bank of Scotland (RBS), which didn't specify minimum A Level grades for last year's applicants, now wants all of them to have at least 26 UCAS points (which can be reached with one grade A and two Bs).
Karen McKinley, head of graduate recruitment at RBS, said: 'There are a huge number of applicants for a small number of places. Most banks have increased their requirements.' Recruiters are also interested in students with second languages and students who have already undertaken banking internships, McKinley said.
Derek Walker, head of graduate recruitment at Merrill Lynch, said it is increasingly important that graduates can add value quickly: 'Our graduate intake are expected to follow a steep learning curve.'
He added there there was a growing preference for people with languages and previous sector experience.
Students focusing their efforts on firms outside the bulge bracket might have more chance of success. Tim Hughes, director of the ISMA Centre for financial markets at the University of Reading, said banks such as West LB Panmure are showing increased interest in graduate hires for 2003.
David Ainscough, a careers advisor at Cambridge University, said organisations such as Bank of America were worth considering because they were running against the cycle and hiring numbers there were up.
But finding out about some of the smaller banks can be far from straightforward. Although Dresdner Kleinwort Wasserstein is attending some 20 recruitment events across Europe this autumn, other European banks have cut back dramatically.
ABN Amro's graduate website indicates that it is visiting only Oxford and Edinburgh universities during the 2003 milkround in Europe. ING Barings is understood to have cut back considerably on student visits, and is relying increasingly on its website to attract applicants. The bank says it has 25 full time undergraduate positions and 20 internships in 2003.
One thing is certain: internships are increasingly desirable. Unless markets pick up, vacancies for 2004 are likely to be filled with undergraduates who were summer interns in 2003.
'It's becoming a question of intern or die,' said Rohami.
Banks are accepting applications for internships now. Students are advised to take note.
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Тема: A Bear Market in B-School Applications
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| Автор:
TTY
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Дата: 16.07.03
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A Bear Market in B-School Applications
As the likelihood of a hot job fades, so does the MBA's allure
Recessions usually are good for business schools. Applications flood into such august institutions as the Wharton School, Dartmouth College's Tuck School of Business, and Stanford University as the young and talented of the corporate world opt to hide out in graduate school, earn an MBA, and emerge when jobs are plentiful again.
For the first two years of the current downturn that pattern largely held. But this year, business school is suddenly less of a draw. Applications for the B-school Class of '05 -- the students who will hit the books this fall -- have fallen by as much as 30% at some top schools compared with last year. The University of Chicago's Graduate School of Business, for example, has received 27% fewer applications for the autumn term than it did in 2002.
Why the drop-off? For one thing, fewer would-be applicants can afford to forgo their salaries or pay annual tuition of $30,000-plus. And new visa restrictions are making it harder for foreigners to apply. But the big reason many twentysomethings may be hanging on to their jobs, however unrewarding, is that the once-coveted MBA no longer comes with the implicit guarantee of a big-bucks job offer on graduation. "When the downturn is this prolonged, the optimism fades," says Daphne Atkinson, vice-president of the Graduate Management Admission Council, which administers the GMAT entrance exam.
It's easy to see why America's fledgling manager class is balking these days. Over the past two years, potential MBA candidates have watched many B-school grads flail upon re-entering the real world. Consider that some 30% of grads at BusinessWeek's Top 30 MBA programs had no solid job offer at graduation in 2002. Two years earlier, only 2% went begging. So while an MBA might enhance a would-be executive's prospects if the economy picks up, the current crop of overachievers isn't about to forsake a regular paycheck. Says a New York investment banker who had planned to go to B-school: "I want to hold on to my job."
You can't blame him, since there are few signs that the job market is improving. Many B-schools say job prospects are similar or only slightly better for the Class of '03. At Dartmouth's Tuck, for instance, some 29% of spring graduates had no job at commencement. A typical example is Christopher Blaydon. Despite dozens of interviews, he has yet to land a job in strategy consulting or strategic planning.
And it's not just job prospects -- affordability is another issue. Many potential MBA candidates have found their paychecks shrinking and their savings and investment portfolios dwindling -- which makes financing a pricey MBA more difficult. Meanwhile, lower investment yields have left some schools with fewer fellowships and scholarships to attract students. Sherry Wallace, admissions director at University of North Carolina's Kenan-Flagler Business School, says her institution will award one-third fewer fellowships this year than last.
Tougher visa rules, a weak global economy, and even SARS-related travel restrictions have prompted fewer foreigners to apply to U.S. B-schools, too. Although foreign MBA students have made up roughly 35% of the class over the last decade, B-school deans expect that number to fall this year. While the impact of SARS and slow economic growth overseas are likely to be short-lived phenomena, the schools are more worried about visa rules that were tightened in the wake of September 11. "We have an applicant who works for the president of a country, and he can't get a visa," says Stuart I. Greenbaum, dean of the John M. Olin School of Business at Washington University in St. Louis.
With fewer people to choose from, B-schools are digging deeper into their applicant pools to fill the fall roster. "Right now, many [schools] are still working their wait lists even though it is fairly late in the game," says Joseph P. Fox, associate dean at Olin. As the big schools get less picky, lower-ranked ones could find it hard to fill their slots.
The problems may not end there: The next application cycle -- for the Class of 2006 -- kicks off in November, just four months from now. "It's difficult to predict what next year will look like, especially in light of continued economic uncertainty," says Julia Min, assistant dean at New York University's Stern School of Business. If the job picture doesn't improve soon, the B-school blues may well continue.
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Тема: layoffs are not over yet
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| Автор:
xcvbxcvbxcvbbv
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Дата: 18.06.03
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UBS to cut 3% of investment banking staff
By Friederike von Tiesenhausen
Published: June 18 2003 9:24 | Last Updated: June 18 2003 9:24
UBS, Europe's biggest bank, is cutting its worldwide investment banking staff by three per cent as earnings in the division continue to be hit by the slump in equities.
The bank said that 500 jobs across all regions and functions would have to go.
A spokesman for the company declined to break down how many people would be affected in London, where the Swiss financial services group has its investment banking headquarters.
UBS, which recently renamed itself from UBS Warburg, has so far avoided the large-scale job-cuts affecting many of its rivals . However, at this time last year, UBS cut 10 per cent of its 800 or so London investment banking staff.
The company said on Wednesday: "We regularly review our cost structure and that move brings us in line with market conditions."
A spokesperson pointed out that the bank would continue to recruit new staff "in certain areas that are of strategic importance", such as fixed income, which has recently performed well.
Its regional division in the US will also be spared from the severe cuts as UBS attempts to became a "bulge bracket" investment bank operating in the top-tier segment.
In the first quarter, UBS reported a fall in investment banking revenues of 6 per cent to SFr894m ($686m).
UBS shares, which have risen more than 12 per cent so far this year, fell 0.4 per cent to SFr75.20 in early morning trading in Zurich.
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Тема: Re: (1) layoffs are not over yet
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| Автор:
9806709809867
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Дата: 19.06.03
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UBS to Cut About 500 Investment Banking Jobs Globally (Update3)
June 18 (Bloomberg) -- UBS AG, Europe's biggest bank by assets, will today start cutting about 500 jobs at its investment bank globally to reduce costs as revenue from equity sales and merger advice declines.
The Swiss bank is eliminating about 3 percent of the jobs at UBS Investment Bank, London-based spokesman David Walker said. The cuts include more than 15 percent of the 600 employees in the European group that focuses on mergers, share sales and other corporate advice, people familiar with situation said.
Initial public offerings have fallen to a 24-year-low and mergers have declined by 70 percent since 2000, leading securities firms to shed more than 100,000 jobs globally. Zurich-based UBS has trimmed European investment banking jobs in June for the last two years, part of the company's annual cost and performance review.
``Corporate finance is still in trouble,'' said Jason Kennedy, a managing partner of Kennedy Associates, a London-based recruiting firm for financial services companies. ``There still will be more cuts'' in the industry.
UBS is following rivals in reducing the ranks of bankers this year. Morgan Stanley, the world's second-biggest securities firm by capital, began eliminating as many as 100 investment banking and analyst jobs around the world earlier this month to reduce costs. In April Merrill Lynch & Co., the world's biggest securities firm, began firing about 150 bankers globally.
Review of Costs
``We regularly review our cost structure and our objective is to balance costs versus growth,'' UBS's Walker said.
The investment banking division in Europe will be reorganized to enable junior bankers to work with senior bankers on any type of transaction instead of assigning them to industry groups. The new structure is similar to one adopted by Lehman Brothers in Europe last October.
Shares of UBS rose 35 centimes to 75.85 Swiss francs at 11:45 a.m. The stock has advanced 13 percent this year.
The bank's global securities business reported a 6 percent slide in first-quarter pretax profit to 894 million francs ($683 million) on falling fees from mergers and share sales.
UBS Investment Bank, led by John Costas and previously known as UBS Warburg, has a total of 16,000 employees in 30 countries, according to the company's Web site. The division's units include equities, fixed-income, rates and currencies, private equity and investment banking, which includes mergers and general corporate advice.
Bankers Leave
It ranks eighth this year in European mergers, advising on 36 transactions worth $21 billion, Bloomberg data show. UBS was sixth in the same period last year, with 53 transactions valued at $50 billion. Globally the bank ranks 10th this year. In U.S. investment- grade bond underwriting UBS has fallen to 12th place from 10th for all of last year.
The firm is faring better in equities. It ranks fifth in global equity and equity-linked underwriting so far this year, up from seventh for the full year 2002.
The job reductions come after UBS in April cut 95 equities- related positions in New York and Switzerland, including 70 jobs at the investment banking division in New York.
UBS has also lost people in Asia. Jim Clark, the head of Japanese equity trading at UBS, is leaving after 15 years to pursue personal interests, said spokesman Matthew McGrath. Last month UBS said that its president of investment banking in Japan, Mark Chiba, was resigning to start a private investment fund.
Senior investment bankers are quitting the industry as demand for their services slumps. Goldman Sachs Group Inc. co-president John Thornton and E. Scott Mead, the head of telecommunications banking, have said they are leaving. Masayoshi Nakamura, Morgan Stanley's Tokyo head of mergers, Richard Gillingwater, Credit Suisse First Boston's head of U.K. investment banking and Citigroup Inc.'s co-head of mergers, Herald Ritch, are among the other recent senior departures.
UBS last year surpassed Deutsche Bank AG as Europe's biggest bank by assets.
Last Updated: June 18, 2003 05:47 EDT
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Тема: Down and Out in White-Collar America
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| Автор:
lkjhkljhlkjhlkjhlkjh
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Дата: 19.06.03
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Down and Out in White-Collar America
Professionals have never had a tougher time finding a job. It's not just the economy; the rules of the game are changing.
FORTUNE
Monday, June 9, 2003
By Nelson D. Schwartz
As far as Brian Hill's four kids are concerned, nothing has really changed. Dad still dons a suit and tie every morning and catches the 7:45 a.m. train to downtown Chicago, spends the day at a desk by a window on the 11th floor, and returns home to the leafy suburb of Winnetka in time for dinner and maybe a game of catch in the backyard. But the 40-year-old engineering exec has been out of work for three months now. His last job was with a small energy-consulting firm. Now his office is an outplacement center where he searches for work along with some 30 other professionals. Hill is relatively lucky--down the hall, 58-year-old Mike Thompson has been looking for more than a year, often going months without landing even an interview. Hill is out there making the rounds, and seems enthusiastic when potential employers tell him that his resume is great and that he "shouldn't be on the street for long." His attitude is still good, and as Hill will tell you, that's more important than fancy degrees or work experience. "Getting up every morning and going downtown helps me keep focused," says Hill after another day of working the phones and searching the Net. "My kids think I'm still working. My oldest knows I'm looking for a job, but not that I'm out of work."
Finding a job has always been hard, of course, even for someone like Hill, who holds a bachelor's in engineering as well as an MBA. But whether you're a newly minted college grad or a seasoned exec with Fortune 500 experience, the job market now is the harshest it's been in decades--bleaker than the "white-collar recession" of the early 1990s and by many counts even more severe than the downturn of the early 1980s. "I've been in this business for over 20 years, and it's the worst I've ever seen," says David Hoffmann, CEO of DHR International, a Chicago-based recruiting firm. "Nothing even comes close to this."
At first glance, the pain seems hard to understand. After all, at 6.1%, the unemployment rate is still well below the 7.4% it averaged in the 1980s and early '90s. The stock market has gained 13% since January, while corporate profits are up 15% from last year's levels. And for all the talk of double dips and deflation, the economy is growing--by 1.9% in the first quarter, according to just-released government numbers.
So what's keeping people like Hill and Thompson from finding jobs? The rudderless recovery and economic uncertainty deserve much of the blame. But it's bigger than that. Increasingly, supereducated and highly paid workers are finding themselves traveling the same road their blue-collar peers took in the late '80s. Then, hardhats in places like Flint, Mich., and Pittsburgh were suffering from the triple threat of computerization, tech-led productivity gains, and the relocation of their jobs to offshore sites. Machines--or low-wage foreigners--could just as easily do their work.
The white-collar crowd was concerned, but they knew that those three forces would also help get the American economy humming. And they did. Now that trust has come back to haunt them. Technology has allowed companies to handle rising sales without adding manpower. Gains in productivity mean one white-collar worker can do the work that would have taken two or three of his peers to do ten years ago. All that has led to slower wage growth. Back in 2000 wages for professional and technical workers were growing by nearly 5% annually--today they're rising by less than 2% a year.
The scariest blue-collar parallel, however, is only just beginning to be felt in the white-collar world: overseas competition. Like automakers that moved production from Michigan to Mexico or textile firms that abandoned the Southeast for the Far East, service firms are now shifting jobs to cheaper locales like India and the Philippines. It's not just call centers anymore. Indian radiologists now analyze CT scans and chest X-rays for American patients in an office park in Bangalore, not far from where Ernst & Young has 200 accountants processing U.S. tax returns. E&Y's tax prep center in India is only 18 months old, but the company already has plans to double its size. Corporate America is quickly learning that a cubicle can be replicated overseas as easily as a shop floor can.
None of this bodes well for the jobless white-collar workers who are hoping that a more robust recovery will bring the next paycheck. The numbers of those who are searching are staggering. Of the nine million Americans out of a job, 17.4% are managers or specialty workers, according to a study of Labor Department data by Hofstra University economist Irwin Kellner. During the 1990-91 recession only 10% of that group was unemployed. Even after the much deeper recession of the early 1980s, just under 8% of unemployed workers were white collar. Sure, there are more white-collar workers today, but joblessness among them has risen faster than their share of the overall job market.
"White-collar workers and college graduates are in a state of shock," says Kellner. "It appears these job losses are permanent. They're not necessarily coming back when the economy does."
At the bleeding edge of the blue-collarization trend are techies--not just the twentysomethings who jumped on dot-com jobs either, but people like Jim Klinck, a 52-year-old IT exec out of West Windsor, N.J. Klinck joined MetLife straight out of college, and by the late 1990s was responsible for software application development throughout the company, reporting directly to the CIO. Once upon a time, working for an insurance company was about as secure a white-collar job as you could find. Klinck never expected to go anywhere else. But in the fall of 2001, after spending 27 years at the insurance giant, Klinck was laid off along with hundreds of other MetLifers.
Klinck earned more than $200,000 a year at MetLife, managed more than 1,000 people, and knows languages and programs ranging from Fortran to PeopleSoft, but cold-calling for jobs has been--well, cold. "I thought it would take a while, but I didn't think it would take this long," says Klinck, who looks for work from his home. So far he's been consulting to keep busy and landing about two interviews a month. "If I've sent people my stuff and haven't heard back in a week and a half, I call them," he says. "Honestly, it's not something I like to do, but you learn how to do it. It's just about kick-starting yourself."
As someone who has been out of work for more than six months, Klinck has earned the title of "long-term unemployed" according to the Labor Department classification. Traditionally a college degree or senior-executive experience protected people from the threat of years of unemployment. Not in this economy, says Jeffrey Wenger, a labor economist with the liberal Economic Policy Institute (EPI). An analysis of Labor Department data by EPI found that in 2002, 18.1% of the long-term unemployed had college degrees, up from 14% in 2000. Similarly, 20.1% were from the executive, professional, and managerial category, compared with 14.2% in 2000. "Not only are college-educated workers becoming unemployed more often, but they're staying unemployed longer," says Wenger. "I think they're surprised at how the economy can mistreat you."
Business school students aren't just studying in Starbucks; they're worried they'll end up working there. At the University of Chicago Graduate School of Business, 96% of grads in 2000 had an offer when they collected their sheepskin. Only 72% of last year's grads were as lucky--and this year isn't shaping up any better. Even at Harvard the percentage of grads without job offers has gone from 3% in 2000 to 13% now. For schools further down the food chain, almost half the class will graduate without even one offer.
While the situation for budding execs or out-of-work ones like Jim Klinck is tough, keep in mind that the overall unemployment rate for white-collar workers is just 3%, about half the overall unemployment rate of 6.1%. So why does it seem so bad? Because three years ago only 1.5% of white-collar workers were jobless. "It's relative," says Wenger. "It's about the direction of the numbers and what you're accustomed to. If you're poor, 3% unemployment is like manna from heaven. But if you're a professional worker who never expected to be out of work, it's rough."
The economy will recover from its current doldrums. No one doubts that. But trends playing out half a world away--in places like the steamy southern Indian city of Bangalore--should temper any job seeker's excitement. That city, which boasts high-speed fiber-optic cables under its chaotic and crowded streets, is the center of India's high-tech industry. Along with New Delhi, India's capital, Bangalore is a magnet for American companies looking to move jobs to places where skilled labor costs a fraction of what it does in the U.S.
Plunging bandwidth prices make talking and sharing data over the Internet easier and cheaper for companies. At first the work was mostly limited to call centers--phone American Express with a query about a corporate card bill, and there's a good chance you'll be talking to Delhi. But in the past two or three years companies have turned to India and the Philippines for much more sophisticated tasks: financial analysis, software design, tax preparation, even the creation of PowerPoint presentations. Sometimes this work is outsourced, with a local company providing the manpower. In the case of giants like Ernst & Young, a more accurate term for this trend is "offshoring"--the workers are E&Y employees; they're just located overseas.
This phenomenon is still in its infancy, but it's already sending ripples through the service economy. E&Y's Bangalore tax-preparation center has been operating full-time for only 18 months. Yet already it's paying off. "There's no question [the office] has allowed us to lower prices in the U.S. and capture market share," says Alan Kline, E&Y's Americas director of tax operations. "We're not H&R Block. Each return we do is a custom job. But this has allowed us to lower prices and be much more competitive. We're getting new jobs because of India." E&Y's Bangalore office is the mirror image of a similar center in Indianapolis, says Kline, and the firm uses the same metrics to evaluate the performance of the 200 chartered accountants (the local equivalent of a CPA) in Bangalore as it does with the 200 CPAs in Indiana. "The work product is almost identical," raves Kline. "You cannot underestimate the quality of the people. It's amazing how good they are."
And how cheap. Starting pay for an American accountant, says Kline, typically ranges from $40,000 to $50,000. In Bangalore the accountants are paid less than half that. Those kinds of savings make outsourcing and offshoring irresistible for Fortune 500 giants desperate to cut costs. Last year NeoIT, which advises companies on moving IT and back-office work overseas, helped U.S. companies transfer nearly 1,000 jobs offshore, primarily to India and the Philippines. By April 2003 it had already shifted an equal amount. "Companies are saying, 'I've had enough of pilot programs,' " says Atul Vashistha, NeoIT's CEO. "They want significant savings and productivity gains."
In the next 15 years Forrester Research predicts that 3.3 million service jobs will move to countries like India, Russia, China, and the Philippines, with the IT sector leading the way. The financial services industry is expected to be another major job exporter, according to consulting firm A.T. Kearney, shifting more than 500,000 jobs, or 8% of its U.S. workforce, abroad by 2008. "The debate at major financial services companies today is no longer whether to relocate some business functions but rather which ones and where," concludes Kearney managing director Andrea Bierce. "Any function that does not require face-to-face contact is now perceived as a candidate for offshore relocation." That may be a slight exaggeration, but there's no doubt that U.S. financial services firms are making explosive moves overseas. GE Capital's International Services unit, which provides everything from risk calculation to IT services and actuarial analysis for GE worldwide, has grown from 634 employees to 17,000 during the past five years. More than half those workers are in India, and they're not being used for mindless data entry--in India every employee has a college degree, and more than 1,200 have MBAs.
Even health care--the one industry in America that has proved it can raise prices almost at will--is picking up on the benefits of globalization. In the U.S., radiologists are among the best-paid medical specialists, often earning more than $300,000 a year to evaluate MRIs, CT scans, and X-rays. In Bangalore, though, T.K. Kurien's team of 15 U.S.-trained and -licensed radiologists interpret chest X-rays and CT scans from U.S. hospitals for less than half what it would cost here. Kurien and his doctors work for Wipro, an Indian tech giant that does more conventional outsourcing for clients like Delta and Putnam Investments. "We know the level of urgency as the image comes in over the Internet from the U.S.," says Kurien. His team can decide which scans need attention stat and which can wait. Like much of the more sophisticated offshore work, this is all brand-new--Kurien's team set up shop only last November. But he's optimistic that more X-rays will find their way to Bangalore as U.S. insurance firms fight rising health-care costs.
Not surprisingly, the disappearance of well-paid white-collar jobs has caused a stir among American pundits and politicians who barely made a peep when blue-collar union positions were evaporating in the Rustbelt. Lawmakers in New Jersey, Maryland, and three other states have proposed legislation forbidding companies from shifting work on government contracts abroad. In Silicon Valley the rise of Bangalore and India's high-tech economy is often blamed for the shortage of good IT jobs. "It's the flip side of globalization," says NeoIT's Vashistha. "What happened to manufacturing over the last 25 years is now happening in services. You can't really fight it."
Indeed, the truth is that trying to stop those jobs from going elsewhere may be as dubious an exercise as using tariffs to protect the steel industry. That's not to say the dislocations and adjustments caused by offshoring and the other factors racking white-collar workers won't be painful or long lasting. But the answer lies in adaptation rather than stagnation. Ravi Aron, who worked for Citigroup in his native India and is now a professor at Wharton, says the government should encourage both workers and companies to invest in retraining and the acquisition of specialized skills. "Workers should ask, 'Where in the value chain can I position myself?' " says Aron.
There is an upside to offshoring. As companies increase profits and become more competitive, they are likely to reinvest in other areas--and that could mean new jobs back in the States. E&Y's Kline insists that his firm has actually hired more higher-paid execs in the U.S. to supervise the new accountants in India. "As we grow the business, we need more midlevel people," he says.
Of course, that's cold comfort to jobless white-collar folks like Brian Hill. He already has two degrees, and he's staring hard at payments for the mortgage and medical insurance, not to mention the cost of raising four kids. The best hope for Hill and millions like him right now is a pickup in the economy, especially corporate investment. The government's latest job report on June 6 provided little encouragement--unemployment hit a nine-year high. Yet Hill is cautiously hoping that he'll land a new gig soon. His type of work, helping independent energy firms and utilities compete, requires plenty of face time--and it's not about to be shipped off to Bangalore. In the past week he's had three interviews. "Things are starting to happen," he says. One morning soon, he may even be able to go to an actual job, instead of to an outplacement center.
Feedback: nschwartz@fortunemail.com
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Тема: Welcome to London
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| Автор:
Juniper
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Дата: 20.02.03
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Dear Juniper: agony aunt:
10 Feb 2003
Juniper is the creation of Philip Augar and Joy Palmer. Augar worked in investment banking for 20 years with Schroders and NatWest and Palmer is an executive coach and adviser to many leading financial services companies. The problems below are based on real-life experiences in the industry.
The streets are paved with...
Two years ago I joined a mid-sized bank to head a new business development initiative. Within a few months I was asked to transfer to London, which I did although considerable domestic upheaval was caused when my family was unable to move with me. It wasn’t long before the downturn started to impact the business effort I was spearheading and it became clear that our growth plan would be missed. Last week I was told that our team was being disbanded and that in effect I was now without a job. I just cannot believe that the company has put me in this terrible position; exposing me, and everyone I care about, seemingly without a second thought. What about all the commitment I have shown? I am so angry I feel speechless and I have no idea how to tell the team, let alone my family about what has happened.
Yours, Gutted
Dear Gutted
Welcome to London, where the streets are rarely paved with gold. Commitment is measured in months, not years, in the City and the current environment is shortening this further. Although you feel gutted and now have the hard job of letting down and disbanding a new team, you must tell them immediately. You are the only person who can give this news and it will be better coming from you precisely because you do care and have shown commitment, even though you probably feel that it is you and not the business situation that has let everyone down. All firms are making cuts and new business projects can be the first to go, so lay out the facts in a straightforward manner to ensure everyone is in the picture. Only then can you, or they, begin to think about what comes next. The same is true for your family who, however devastated, will be glad to have you back and doubly glad they didn’t follow you to London.
Juniper
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Тема: The News: It's All Good
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Дата: 20.07.03
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The News: It's All Good
Russian news programmes have a disturbingly familiar tone
BY YURI ZARAKHOVICH | MOSCOW
One of my favorite Soviet-era jokes had Hitler watching a Russian military parade, and Napoleon reading Pravda, the Communist Party organ. Hitler's response: "If only I had such missiles, I'd have won the war!" Napoleon's: "If I had such a press, the world would never have heard of Waterloo."
I recalled that joke last night as I was watching Vremya (Time), the primetime newscast on the state-run ORT channel. It had been a long day, packed with alarming news: the stockmarket had shrunk by $5 billion, in response to the targeting of several prominent oligarchs by law enforcement agencies — Russian President Vladimir Putin had hinted publicly that the billionaires were growing too big for their britches and too ambitious politically; British Petroleum had indicated it might reconsider investing $8 billion in Russia if the investment climate did not become less murky; Moscow city transport fares were to go up drastically by the end of the summer; bread prices had already shot up (by 20% in some cities), and milk prices were expected to follow. This was especially bad news for the 70% of Russian families who live below the poverty level: bread and milk are their staples.
But Vremya did not waste its precious minutes on such mundane matters. Instead, it showed Economic Development Minister, German Gref, telling Putin that the country's GDP had grown by 7.2% and investment by over 12% — and that citizens' incomes would grow by 6% by the end of the year. Then, Vremya showed Putin talking to the Tri-Partite Commission of entrepreneurs, state officials and trade-union bosses. They, too, declared that the future was bright for Russians. Next, the programme showed Putin talking to the Atomic Energy Minister who gave a glowing account of his industry's progress. Then, I saw Prince Charles donating a yacht to the Russian navy while on an official visit to St. Petersburg. Finally, there were a couple of foreign news items, and the weather forecast capped the program.
'Vremya will show how things will turn out tomorrow,' is the newscast's daily signoff
You might ask why I bother to watch news on state-run TV at all? Well, until a month ago, I watched to get the official line rather than for the news. Now I — and millions of other Russians — watch because there's no other option: the last independent all-Russian station, TVS, was closed last month, the victim of a long and painful struggle for survival between the hammer of the state and the anvil of a group of oligarchs who had pledged to fund its independence, but fell out among themselves when their interests collided.
I count myself lucky that I can still get some news on the Internet. I belong to the 4% of this country's population that has Internet access. The rest now has to do with Vremya, or Vesti, another state-run news program. On the net, I read an article by a young Russian journalist, bitterly complaining that state-run TV channels had become truncated to the point of being uninformative or misleading. Good for him. Except that this guy and I had an argument back in April 2001, when the government took over another private station, NTV. I asked why Russian journalists did not show much solidarity with NTV. He responded that the NTV crew had got too greedy and too ambitious. He refused to see the NTV takeover as a threat to the freedom of speech, and believed that Putin would set things right. Next time we meet, I'll ask him if he still thinks that. In the meantime, I'll have to learn to live with state-run TV.
It's a good thing I have plenty of practice from the old days. "Vremya will show how things will turn out tomorrow," is the newscast's daily signoff. Yeah, right. Back in Soviet times, we gauged the tide of events by the things Vremya didn't show, but we knew were happening, like the war in Afghanistan. Now, that's how we gauge the progress of another war — Chechnya.
The more things change in Russia, the more they stay the same.
©TIME. Printed on Sunday, July 20, 2003
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Тема: Chelsea is offered a $100,000 job
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| Автор:
Михаил
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Дата: 21.02.03
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Chelsea is offered a $100,000 job
From James Doran in Washington
Healthy outlook: Chelsea Clinton, 23 next week, wants to be a business consultant specialising in the healthcare sector. Photograph by Jean-Marc Ferre/Reuters
CHELSEA CLINTON is the envy of this year’s graduate trainees after being offered a $100,000 (£64,500)-a-year job with McKinsey, the New York management consultancy.
Sources close to McKinsey confirmed that the daughter of Bill Clinton, the former President, had been offered an “entry level” position as a business analyst but had not yet accepted the job.
Miss Clinton received similar job offers from McKinsey and Boston Group, another management consultancy firm, and appears to have negotiated a salary far above other graduates.
McKinsey is believed to have made an initial offer of $60,000 a year.
Company sources said: “To hear people talk in McKinsey, you would think Chelsea was arriving tomorrow. But what is certain is that she has been offered the job and has expressed great interest but has not yet formally accepted it.”
A company spokesman would say only: “Every applicant is treated with the same degree of confidentiality by McKinsey and company.”
Miss Clinton, who is 23 next week and will leave University College, Oxford, in the spring after completing a postgraduate course in international relations, wants to train as a business consultant specialising in the healthcare sector.
Her interest was fostered during a summer holiday job last year when she worked at the World Health Organisation in Geneva.
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Тема: Low pay costs and an educated workforce entice banks to Asia
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Дата: 24.03.03
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Low pay costs and an educated workforce entice banks to Asia
Financial services jobs are migrating to India in growing numbers. A trend that began in the mid-1990s, when Western companies began to open call centres in the country, is gathering pace.
In dealing with a range of consumer problems, from internet connections to directory inquiries, Paula in Plymouth has already often been superseded by Deepak in Delhi. Now, financial services firms are taking advantage of India’s low wages and high-calibre staff.
IT programming is an example. Deutsche Bank, Lehman Brothers and Accenture already use India-based programmers. Standard Chartered Bank employs back office staff there.
More operations functions, such as equity settlements and even complex derivatives transactions, could move to India, with research jobs. As banks seek to cut costs, India’s increasing appeal is bad news for workers in London and New York.
Graduate trainees may well be among the casualties. A New York-based managing director in a leading investment bank says the work done by many trainee analysts is formulaic and could easily be shifted overseas.
He says: “College kids don’t enjoy working all night on things like the comparative statistical analysis of three companies within the clothing sector. This could be done in India. The cost savings would be immense.” Graduate recruitment, which has fallen in response to the downturn, could drop even further as a result.
Through its Scope International subsidiary, Standard Chartered employs 1,700 people in Chennai – formerly Madras – to carry out back-office work, and plans to nearly double that number in the next few years. The bank uses its Indian office for tasks ranging from custody to foreign exchange settlements and some derivatives transactions.
Mike Grime, head of group operations at Standard Chartered, says he has been inundated with inquiries from other banks interested in following its example, or in outsourcing their own operations to Scope. The bank has not decided whether to take on third-party contracts. However, Grime says it is inevitable that more operational roles will shift to the subcontinent, as there is almost no limit to the complexity of tasks that can be undertaken there.
He says: “Companies think they are going to India just because of the cost advantages, but the fact is that the workforce is absolutely superb. Every one of our employees in Chennai is at least a graduate.”
Along with Citibank and Lehman Brothers, Standard Chartered is one of several banks that hires high-flying graduates of the Indian School of Business (ISB) in Hyderabad. The school runs a one-year MBA course for “future business leaders”. An ISB spokesman says almost all its 159 students are likely to work in India when they graduate.
Students at the ISB are of a high standard. The average GMAT score is 690, comparable to the 700 achieved by students at the Wharton School in Pennsylvania, with which the ISB has a partnership.
As well as its MBAs, the calibre and size of India’s graduate population appeals to Western employers. Every year, hundreds of thousands of students complete degrees at Indian universities. This gives high-paying international employers the pick of a large crop – the average age at Standard Chartered Bank’s Indian operation is a youthful 26.
OfficeTiger, a Chennai company that provides desktop publishing and research services to investment banks, received more than 25,000 applications for around 100 jobs last year. Randy Altschuler, a former investment banker at Deutsche Bank and joint founder of OfficeTiger, says Indian employees are every bit as competent as graduate analysts in the West.
Altschuler says: “These are the kind of people who would be professionals, but instead they are assisting the professionals. In India you get a much higher standard of person doing assistant work.”
Joe Thomas, an operations specialist at Wheat, the recruitment firm, says: “London as a centre for operations people is going to shrink. People have already looked at Scotland and Prague, but India is the best bet.”
Trevor Foster-Black, managing director of Coalition Development, a UK company that provides information on banking employees to recruiters, uses researchers in India to structure data. He says: “It would be very difficult to find such high calibre people to do similar work in London.” The time difference also works to India’s advantage. Foster-Black says: “They begin at 4am our time and everything’s finished by the time we arrive.”
Altschuler says banking staff in Western financial centres need not be concerned about losing their jobs. Instead, they should be pleased that the roles remaining in the West will be of higher calibre. He says: “People in New York and London will be working in higher-end areas. There will be more need for people with higher education – employees are going to have to get smart.”
Grime agrees that operational positions in London will become more demanding and complex. He says: “The old paper-processing jobs will disappear, replaced by relationship roles based on talking to customers and liaising between the central office and the overseas hub.
“The boundaries between the middle and back office will blur and operations staff will have much more satisfying jobs than in the past.”
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Тема: Hard Lessons for Newly Minted MBAs
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| Автор:
652652
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Дата: 25.03.03
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Hard Lessons for Newly Minted MBAs
The tough hiring market is forcing wanna-be execs to adopt aggressive and innovative tactics in the quest to land a job
Consider the diminished fortunes of today's graduating MBAs: Record levels of debt, starting salaries that have slid by 15% or more, and fierce competition for jobs -- not only with fellow students but also with many of the still-unemployed Class of 2002. The jobs that the Class of 2003 forsook for grad school, with their predictable paychecks and bevy of benefits, suddenly seem unattainable. B-school a winning ticket? Not exactly.
The harsh reality is that MBA students can no longer simply juggle on-campus recruiting interviews and wait for call-backs. They've had to forsake the mild-mannered, wait-and-see-who-makes-an-offer approach for something more aggressive. Despite talk of a pallid recovery in the MBA job market, the fat days before the bust won't be back anytime soon. Three years ago, most grads could boast a half-dozen offers. Nowadays, it's an average of maybe one per MBA. That means plenty went without. A full 30% of MBAs were still pounding the pavement at graduation in 2002, and a few hundred are probably still looking for work.
"DEMONSTRATE A PASSION." "The economy is very challenging right now, and if you're really interested in a company, you have to demonstrate a passion and really convey interest and enthusiasm," says David Fein, who is in his second year at the University of Chicago Graduate School of Business. His efforts landed him a coveted spot in Toys 'R' Us's (TOY ) leadership-development program, despite his lack of retail experience.
How did Fein do it? He took to the suburbs to study Toys 'R' Us and two competitors, analyzing product placement and store layout, querying store managers, studying circulars. He even chatted up Wall Street analysts. Using his research, he devised his own analysis, which he brandished at the interview.
Fein's is one of several strategies that career-service directors say students are using to give them an edge with recruiters who have too few jobs and too many candidates. One approach: Acting as corporate historian. Students study a company's peaks and valleys, relating their skills to corporate history and how they would fit in.
IN HIGH GEAR. Another tactic is cyberspace sleuthing. Savvy students are using search engines to examine the backgrounds of recruiters who will be interviewing them. They look for a connection -- say, a hometown, hobby, or former employer in common -- that will build a bond.
B-school career offices aren't sitting idle, either. Many are adding staff and launching new programs geared to tackling the listless job market. At the University of Pennsylvania's Wharton School, the new career-management director, Peter Degnan, has hired three employees and plans to add three more.
That's a stark contrast to this time last year, when the office had no director and little direction -- students gave the school bad marks then for leaving the top career-service officer post vacant during the three months before graduation. Now, Wharton's placement office is in high gear, helping grads maneuver the new job hunt through workshops, networking events, and individual counseling.
GLIMMER OF HOPE. While B-schools ramp up job counseling, recruiters find that they're being catered to as never before. Cornell University's Johnson Graduate School of Management has 11 new career-office initiatives, including flying recruiters to the out-of-the-way Ithaca (N.Y.) campus for a day of interviewing, courtesy of the private jets of S.C. Johnson & Son, the school's namesake. At University of Maryland's Smith School of Business, staffers have hired an executive-search firm to help land MBA students jobs. And many career offices are trying to attract second-tier recruiters -- manufacturers and smaller consulting firms and banks, for example -- that may have been left out in the cold before.
Despite the tumult in the MBA job market and the economy in general, 2003 may not be quite as bad as 2002. The University of Chicago's Julie Morton says consulting firms interviewed 14% more students this year than last -- and increased interviews often translate into an equivalent uptick in hiring. At a number of B-schools, online job postings have risen significantly -- as much as 50%.
Still, "it's a marathon and not a sprint," warns Wharton's Degnan, especially in industries such as financial services and investment banking. No question, those required marketing courses should come in handy as MBAs face a tough final assignment: Selling themselves.
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Тема: Affluent White Americans face McJob reality
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| Автор:
246t23562356
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Дата: 25.06.03
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Affluent White Americans face McJob reality
Thursday, June 19 2003
By Charles Slaney
A recent article in the organ of aspiring millionaires, Fortune magazine, highlights the obvious outcome of deskilling, downsizing, and shipping jobs overseas. Eventually, even University educated professionals with years of experience can no longer find jobs to match their skills set.
America has a very different job market to Britain. Here, University graduates are now resigned to the idea that a degree does not get them onto a better career structure. This is different in the USA where having education is a still considered a near-guarantee of a well-paid job. Being college-educated is still respected and employers have traditionally expected to put distance between the pay packets of graduate workers and non-graduates.
Ironically, in an ultra-capitalist society where supply-and-demand is king, this rewarding of graduates has continued even with a glut of them in the job market. It's why a million US talk shows love to show the previously abused or deviant guest on their way to 'college', as a way of redemption to a medley of audience whoops, gasps and tears. This simply wouldn't work if the expectation were the new graduate would make six million job applications, give up on a decent future, before returning to the streets to deal drugs or work a deadbeat job.That's a caricature, of course, but sums up the American love of college education as the Holy Grail of social mobility.
Affluent American workers - managers, executives, salesmen - grew up with expectations that hard work would land them good employment and if they struggled a bit here and there they would get a house, car, job wife and support a growing family.
Yet for those made redundant now the future is bleak. The older they are the worse off they are. Thus you have a situation where managers either laid-off in fear of their jobs buy copies of Microsoft Excel 2000 for Dummies from horrifically underemployed shop clerks with Masters degrees who could give said manager a great lesson in how to use Excel. It's a kind of topsy-turvy economy where human resources, inspiration and brainpower stagnate before being flushed away for good.
It used to be the labour intensive manufacturing jobs that were shipped to the Far East or Mexico, now it's brainwork like accountancy, computer programming, technical support, management. According to Fortune, even patients' X-Rays are analysed off-site in the Philippines. American jobs lost through this process are never coming back, however much the economy booms. The jobs that do remain, will be low-grade sales, reception work, and low-grade clerical - a skeletal staff responsible for funnelling information to and from distant colleagues in cheap labour markets.
Although the American press is waking up to what it has dubbed the 'blue-collarization' issue, it's nothing new. Sociologists formed the 'proletarianisation thesis' in the 1980s, describing a process where new 'white collar' jobs were little different to manual jobs of before - repetition, only token promotion, little ownership of the work, poor pay, no autonomy or decision making. The difference now is that the process is present higher in the social food chain.
Given the engrained boot-strap pulling philosophy of the American culture, it seems this growing army of underemployed people will continue making applications, making follow-up phone calls, visiting employment agencies daily, with a chirpy 'no one owes you a job'. Eventually, however, when they're aware of the gravity of their situation in a society where, ultimately, no one gives a toss about them, we'd love to welcome them to the anti-Globalisation movement where I'm sure their insights and experience can be repurposed and put to good use.
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Тема: Skilled Workers -- or Indentured Servants?
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| Автор:
36534674367
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Дата: 25.06.03
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Skilled Workers -- or Indentured Servants?
Once confined to lower rungs of the workforce, abusive treatment of workers on visas is spreading to legions of white-collar employees
In 1998, Mohan Kutty, a Malaysian-born doctor who has practiced medicine in Hudson, Fla., since he immigrated to the U.S. more than 20 years ago, decided to open five clinics in rural Tennessee. To find physicians to take such hard-to-fill posts, he sponsored work visas for 17 doctors from a variety of countries, including India, Pakistan, and Romania. But when they showed up for work, Kutty paid them just half the $80,000 a year he had promised -- and fired several after they hired a lawyer to help them out.
Last fall, a Labor Dept. judge ordered Kutty to pay the doctors a total of $1.04 million in unpaid wages. The clinics have since closed, and some of the doctors have found work at other Tennessee health-care providers. "The violations were serious and pervasive, and there is little evidence of good-faith efforts to comply with the law on the part of Dr. Kutty," the judge said in her ruling. Kutty has appealed the decision, saying the law was unclear, but was unavailable for comment. Through their lawyer, the doctors declined comment.
CAUGHT IN THE CRUNCH. Such stories have become increasingly commonplace these days. Immigrants have long complained about employers who cheat or abuse them and threaten to have them deported if they protest. Generally, the problem has been confined to the lowest rungs of the workforce, such as Mexican farm hands who enter the country illegally.
Nowadays, however, the weak economy has sparked an outbreak of abusive treatment among the legions of white-collar employees who flocked to the U.S. on perfectly valid visas during the late-1990s boom. Usually, theirs are cases of employers who don't pay full salary or benefits. Often, like Kutty, the employers are immigrants, too, so they know how the system works.
Indeed, labor law violations involving workers on H1-B visas, which are designed for skilled employees, have jumped more than fivefold since 1998, according to the Labor Dept. Back-pay awards for such employees have soared by more than ten times.
LESS WILLING TO QUIT. In response, agency officials have stepped up H1-B investigations. They agree there could be thousands of H1-B workers who don't file complaints because they fear the loss of their visa. "We take very seriously this fear about coming to the government to complain," says D. Mark Wilson, deputy head of the Labor Dept.'s Employment Standards Administration, which enforces labor laws.
The spreading problems stem from the stagnant economy, officials say, which is driving some companies to cut costs by unscrupulous means. At the same time, the scarcity of jobs has left many skilled immigrants more dependent on their employers and less willing to quit if trouble starts.
The abuses have been particularly widespread in high tech, which used H1-Bs to bring in tens of thousands of programmers and other professionals when companies were desperate for help during the boom. But with the jobless rate among computer scientists and mathematicians at 6%, vs. a mere 0.7% in early 1998, many workers are more vulnerable.
SEARCHING FOR SPONSORS. Experts point out that the U.S. work-visa system gives employers tremendous power over immigrants. More than a million people are employed in the U.S. under visas for skilled workers. While the rules for each visa type differ, all require immigrants to get a U.S. employer to sponsor them. So if employers yank their sponsorship -- which they can do for almost any reason imaginable -- the immigrant often must return home and try to find another sponsor -- an arduous task.
"They don't have the usual rights that U.S. workers have," says Eileen Appelbaum, a professor of labor economics at Rutgers University. "You're essentially an indentured servant."
That's pretty much how Ekambar Rao Kodali felt when he ran into problems with his job as a systems analyst. The Hyderabad (India) native felt lucky to score an H1-B visa in 1997 that allowed him to move to the U.S. and work for Atlanta-based Softpros Inc. The high-tech consulting firm paid him $4,400 a month, but by the time the economy soured in 2001, his paychecks had already started to come in late, and Softpros didn't keep up its payments on his health insurance, Kodali says. He finally quit in frustration late that year but was forced to move back to India with his wife and three-year-old when the job he had been offered at another company fell through.
"YOU'RE GOING BACK." In February, Kodali returned to the U.S. after finding work with yet another high-tech consultancy. But the new position -- and his H1-B visa -- expire at the end of the year. He left his family in India, where he will have to return unless something else turns up. "I worked for [Softpros CEO Chand Akkineni] as hard as possible, but he took advantage of me," says Kodali. Akkineni, also a Hyderabad native, concedes that he sent out paychecks late, but he denies that he failed to keep up insurance payments.
An H1-B worker's options are few. For example, federal law prohibits employers from forcing H1-B workers to take unpaid leave, yet experts say the practice has become widespread. "You're told, 'If you don't want to do it, fine. You're going back,"' says John W. Steadman, president-elect of the Institute of Electrical & Electronics Engineers. Vigorous law enforcement would help, but until the job market improves, skilled immigrants will remain at the mercy of their sponsors.
Note: This story originally appeared in the June 16, 2003 issue of BusinessWeek
By Brian Grow in Ocala, Fla.
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Тема: "Being Laid Off. It's Not a Happy Thing"
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| Автор:
45673567567
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Дата: 25.06.03
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"Being Laid Off. It's Not a Happy Thing"
Former dot-com high-flier Michael Laskoff is turning career distress into a new career with his book Landing on the Right Side of Your Ass
During the Internet's heyday, Fortune magazine likened Michael Laskoff, then chief marketing officer at CompUSA's Cozone.com, to a dot-com Hannibal Lechter, feasting on the Old Economy. His ride to the top was certainly dizzying. After graduating from Harvard Business School in 1994, Laskoff joined investment bank Furman Selz and hop-scotched his way to Bertelsmann, McKinsey, and WorldQuest Networks. Laskoff reveled in his identity as a gilded Internet guy, as his salary soared 1,300% from 1989 to 2000, to $350,000.
That was three years ago -- a lifetime in Internet years. Now, Laskoff is self-employed, spending his time ministering to the only growth market he sees: the unemployed (see BW, 6/30/03, "For Gen X, It's Paradise Lost"). His book, Landing on the Right Side of Your Ass: A Handbook for the Recently Fired, is due out in January from Random House.
Laskoff also has a Web site, askyourass.com, featuring career advice as well as the Reemployment Musical Spectacular Spectacular, an opera set to the tune of Verdi's Pace Pace with such lyrics as "I got a pink slip, a foul and wretched pink slip, and now my life is over." Visit the Web site, and see Laskoff appear in drag.
BusinessWeek's Michelle Conlin recently talked with Laskoff about trying to make unemployment funny and removing the stigma from the state of being axed, downsized, and dissolved. Here are edited excerpts from their conversation:
Q: What do you make of most of that job advice sitting on bookstore shelves?
A: Most are either derivative hippy philosophy or these kinds of New Age, self-empowerment books. But no one really talks about how to deal with how you've been fired or how to cope with being laid off. It's not a happy thing. There's a dearth of practical job advice -- especially for people under 40.
Q: And your book and Web site?
A: I think what makes mine different is that I've developed expertise that can be useful to a lot of people. I've been plotting my own career and making successful moves long before it was the vogue thing to do.
Now everybody needs to be thinking about their career this way. I've gone through it all, and I think to be an expert you have to have had the experience.
Q: Does the number of jobless MBAs from top schools surprise you?
A: This is a recession that seems to indicate that the fundamental things that used to guarantee success aren't working anymore. I graduated in the top 10% of my class at Harvard Business School. Ten or 20 years ago, if you went to one of these top schools, you were seen as inherently adding value. There was always going to be a place for you. Now, it's "What have you done for me lately? If you're not doing it for me today, then I can't afford you."
Harvard MBAs are expensive. For me to recoup the cost of an education, I can no longer count on a company to...provide me with a terrific salary. In the end, I would have rather had Girl Scout cookies than all that paper wealth.
Q: So what are a lot of these elite jobless doing?
A: Some people I know have gone from being CEOs to taking corporate staff roles. That's not a fun transition to make. Some are taking these jobs with the idea that this is just for a year or two. But that could be a delusion. A lot of them are pining for a time that won't come back. I think that in the future there's going to be even more risk, instead of less.
Q: What sorts of people are companies looking to hire now?
A: The pendulum has swung back. We're now living in a world in which companies are saying: "Don't bring me your best and brightest. Bring me someone who has demonstrated real consistency. Someone who didn't make any mistakes over the past five years."
I've found that companies very much want people who have not been risk-takers. But the mantra I grew up with is that mistakes are O.K. Companies are making money right now not through growing the top line but by reducing cost pressures. Candidates who can run a tight ship are popular right now. The kinds of people who can squeeze blood from a stone. In the very best sense they are bureaucrats. Bureaucrats as opposed to innovators.
Q: What are some of the biggest mistakes you see job-seekers making?
A: I think one of them is overstating what you can do. People are savvy about who they're hiring. Other people think the process will be easy or have the attitude that hiring managers owe them something.
There's also a real problem of pride. People don't want to call their friends or take their parents up on offers of new contacts. Then there are those who take solace in the bad economy -- almost as if it's an excuse to not push every day.
Q: What do successful job-seekers have in common?
A: The actors who work the most aren't necessarily the best or the most talented. They're the ones who don't give up. Who keep pushing and auditioning and being proactive every day. It's the same thing with a job search.
You have to wake up every day and make the calls that will get you that much closer to your goal. People who maintain a good outlook also do better. Those who say "Hey, I met three new people today. I had a good day." You have to treat those little conquests as victories.
Q: Your dad is a small-town, old-fashioned, general-practice lawyer. How has he been influential in your career decisions?
A: After the third professional situation blew up in my face, my dad said, "What do you expect? These people owe only themselves. The only form of self-protection is to be employed yourself." There are lots of dangers. He wasn't romantic about it. But ultimately, you have to strike out on your own path.
Edited by Patricia O'Connell
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Тема: Trading bonds for ballet lessons
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| Автор:
098760987609876
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Дата: 26.06.03
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Trading bonds for ballet lessons
By Hofman
Published: June 25 2003 20:09 | Last Updated: June 25 2003 20:09
The roll call of fortysomething financiers leaving the investment banking industry is lengthening. Earlier this month, Scott Mead, a Goldman Sachs partner renowned for his expertise in the telecommunications industry, resigned to "pursue charitable interests". This announcement came just as the media had stopped wondering why John Thornton, co-chief operating officer of Goldman, had quit to become an academic in China.
Mr Mead and Mr Thornton are not washed-up old duffers, slinking away with meagre redundancy cheques. These men define the phrase "high-flyer" - they must have net worth in excess of $75m each. They are leaving because they want to, not because they have to. Moreover, they are the tip of the iceberg: the ones so rich that they made headlines. I left the City in 2001 after 18 years and I know many other senior bankers who are volunteering to leave the golden salt mines.
Why are individuals at the peak of their careers deserting their desks for a life more ordinary? Because we can, is one reason. Investment banking pays ridiculous sums of money and during the technology heyday, ridiculous became obscene. I was paying 23-year-old graduate trainees virtually double what a senior nurse earns. Over a 10-year period, a City banker or trader can accumulate "real money": enough to walk away when he or she tires of the corporate treadmill.
And it is easy to tire of. Success in the financial industry is often about specialisation. The best bankers tend to be sector experts: custodians of a narrow but deep seam of knowledge. It is all about perfecting your technical skills, not developing new ones. Inevitably, excitement is replaced by boredom. One of my former colleagues, a 20-year veteran of the debt markets, talks of "wanting to slash my wrists if I have to pitch for another bond deal".
The pyramid structure exacerbates the monotony. Few break through into the echelons of senior management. Most remain stuck as "managing producers", an American euphemism that means you are only as good as your last deal and you manage one or two graduates in your spare time (after 10pm). When we started, we never worried about the career path in our forties. But what seemed exciting in youth (deals, screens, trading floors, travel) palls by middle age. After the glorious induction years, most of us worked in the City to make money. We always secretly hoped that, once we were rich, we could find something more interesting to do.
Investment banking is financially rewarding but the job devours you. Families, hobbies and friends are all sacrificed on the altar of "the firm". Early mornings are de rigueur. Day in, day out, you are expected on the trading floor by 7am sharp. "This business is all about stamina," one senior banker told me when I joined Merrill Lynch in the 1980s. The City can feel like a war zone: the very pores of the buildings are laced with competitive tension. If you do not make that profit target, or a client does a deal with another firm rather than you, you are regarded by colleagues as a loser who lacks the killer instinct.
The constant pressure is extremely stressful, a heavy load that rarely dissipates unless you are paralytically drunk. Even on a 600-person trading floor, it can be lonely. It is not in your colleagues' interests for you to shine. The bonus pool is finite and if you look too good, they will end up getting less of it. Foreign business trips sound glamorous but tend to pass in a blur of calls to the office, interminable security checks and traffic jams. Jet lag used to leave me leaden from lack of sleep, with a constant hangover of nausea. Despite visits to a nutritionist, I never managed to eat properly or utilise my expensive gym membership. "The City is a health hazard," my doctor said, on hearing that I had quit. "Please don't go back. It's not a place to grow old in." She was right. The brash, high-octane culture of investment banking belongs to the young. "I feel like a freak working in the City at my age," a 45-year-old female fund manager said to me recently.
Increasingly, people are realising there is an afterlife. Many former City slickers are flourishing. James Strachan was one of the first to make the transition. He left Merrill Lynch in the late 1980s, worked as a professional photographer, then ran a charity and now chairs the Audit Commission. Other former financiers I know are writing screenplays, studying Byzantine history, and tending the nation's artefacts at the British Museum.
It can be hard to stay away. The familiar is compelling and recidivism occurs. A City head-hunter called me this month to say that an international bank was interested in luring me back to work. This man specialises in achieving multi-million-dollar compensation packages for his candidates. For a moment, I was tempted. Then it hit me; returning to the City would preclude ballet lessons, four times a week.
Ballet has changed my body. Toned thighs have replaced cellulite-speckled trunks. It was Indecent Proposal in reverse: gorgeous legs or $1m? The legs won. After all, there is a time and place for everything.
The writer was formerly global head of debt origination at Barclays Capital. She is now writing a novel
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Тема: Market for fresh MBAs in London should be growing soon.
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| Автор:
Mark Fisher
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Дата: 28.04.03
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City workers are 'unhappy'
Mark Fisher - 28 Apr 2003
More than 90% of City of London workers do not want to stay in their
present job, while nearly half aim to quit their financial careers
altogether in the next two years, according to a new survey. Three quarters
of them intend to be out of their jobs in five years.
These are the gloomy findings of a survey of 400 workers by Chiumento,
a human resources consultancy. Richard Chiumento, chief executive,
said: "People are unhappy because they fear for their jobs. They also
demand more satisfaction at work than they did a few years ago. Bankers are
upset that bonuses have come down."
Investment bank employees were just as fed up as the rest of the other
workers surveyed, who included IT staff, lawyers, insurance staff and
management consultants. The survey also found that 78% hoped eventually
to work outside London.
About 85% of investment bank staff believed redundancies in their
industry will increase in the next six months. Nearly half said they knew
their employers were reducing headcount. An optimistic 28% of all workers
said they would regard redundancy as an opportunity. But 46% would see
it as a big setback and 64% would find it humiliating.
Investment bank staff said a low pension was one of their main
concerns, with fear of terrorist attacks another. Long hours were a worry for
many, while fewer cared about stress or having to commute.
Nearly 20% of staff surveyed wanted to work abroad, while a similar
number were keen to set up their own business.
Most older workers and senior staff, including company directors,
believed that employment levels in the City would never return to their
peak. Younger and more junior staff were more likely to believe that the
good times would eventually return.
Penna Meridian, an outplacement firm, said two-thirds of banking staff
made redundant in London's financial district last year left the
industry. Many joined non-financial firms, set up consultancies or took
government jobs, while others studied or went travelling.
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Тема: To MBA or not is still the question
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| Автор:
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Дата: 01.10.04
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To MBA or not is still the question
Carol Lippert Gray
16 Sep 2004
You work in finance, so you know the drill: Add the plusses and subtract
the minuses. But how does that translate when you're trying to decide
where - or whether - to obtain an MBA? Sharpen your pencil, because here
we go.
Here, then, are some of the plusses when considering the case for an MBA:
Experience in multiple disciplines, improved strategic focus and
well-rounded skill set
The personal satisfaction of having more education
Wider networking opportunities
The potential for a higher salary
And now, the minuses:
The cost in time and money
The potential for an employer to feel threatened by a subordinate
with better credentials
The potential that an employer will value hands-on experience over
book learning
The fact that an MBA from a lesser-ranked school doesn't have the
cachet (or door-opening power) of an MBA from a top-tier school
A ticket, not a free pass
In a survey of the MBA Class of 2004 by the Graduate Management Admission
Council, 58% of new MBAs felt the value of their degree was 'outstanding
or excellent'. But Ayse Tunca, in an essay, 'The Value of Today's MBA
Degree' on the MBA Association website ( http://www.mbaassociation.org),
says, 'If you think that a Master of Business Administration (MBA) degree
will be your ticket to career success, think again. Getting an MBA will
not guarantee you a sky-high salary and endless promotions. At best, it
may serve as a tool to increase your employability.' Still, she says
demand for qualified MBAs has never been higher than now.
Amy Bennett, a senior auditor for a major credit-card company, has found
that to be true. She graduated from the University of Rhode Island in 1994
and got a job as a senior tax consultant at Deloitte. After working for a
while, she decided to get an MBA for two reasons: 'It was a personal goal.
That was the biggest reason,' she says. 'Secondly, I wanted to move up and
get out of the job I had.'
She earned her degree in 2001, with an internship at Chase the summer
before because she wanted to explore the world of private banking. She
says she thinks her MBA helped her get the job she got coming out of grad
school.
Bennett went in for an interview and got hired the next day. She says, "If
I had gone back to my old job, given our clientele, having an MBA would
have put me on a higher playing field, but if I still had a job in my old
field I'd be at the same salary I am now. And I think I might see further
benefits down the road.' Another plus? She met her future husband in
class.
Many of her classmates struggled to find jobs, however, because the
economy in general in 2001 was sluggish. You can't treat an MBA degree as
a panacea.
Brett Good, a district president for accounting recruiter firm Robert Half
International, seconds Bennett's assessment. He says an MBA gives job
candidates a leg up, but cautions, 'Don't go into a master's program
thinking it's a golden ticket and that you'll be able to get any job you
want. You'll be competing with others with similar, the same, or better
credentials and will still need to sell yourself.'
The Bottom Line
With some 700 business schools in the U.S., Good's advice to potential MBA
candidates is this: Do your homework. He says, "Research to see whether
the program has ties to the industries you want to work in; some programs
have more prestige or cachet but others still have value.'
That means assessing your goals, needs and resources. Find out whether
your employer would underwrite all or part of the tuition. Then talk, a
lot. Talk to students and graduates - even faculty - of the schools you're
interested in. Talk to HR professionals in the industries you'd like to
work in. Talk to your family and colleagues, especially a mentor if you
have one, to find areas you should focus on.
Then start ruling out those programs that don't fit your needs, interests
or skills.
One place to start is U.S. News & World Report, which publishes an annual
guide to colleges and universities. Also visit All Business Schools (
http://www.allbusinessschools.com ), a site whose motto, 'Find the
business school that's right for you,' is what it's all about.
To see complete results of the Global MBA Graduate Survey, visit
http://www.gmac.com.
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Тема: Telemarketing Jobs Go to Jail
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| Автор:
srtg
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Дата: 04.04.04
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There's been a national trend among the prison industry to target businesses that are moving some of their operations overseas, according to the Oregon Corrections Enterprise (search).
Businesses say the inmates make good, hard-working employees in an industry plagued by high turnover. The prisoners are never late, absent or on vacation — and do the job for only about $130 a month, or less than $1 an hour. Companies also don't have to offer them benefits.
For many inmates, it's a chance to redeem their dignity, become more responsible and change their criminal ways.
But critics of the practice warn that some prisoners have abused their access to personal information. In Washington state, for example, a jailed rapist harassed a woman with calls and cards.
Supporters say most of the criminals behind bars will eventually be back in society, so it makes sense to give them job skills.
Click here to watch a report by Fox News Channel's Dan Springer.
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Тема: Re: (1) Wharton reading room
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| Автор:
lkjhglkj
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Дата: 12.07.04
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MBA students need to get their timing right
Sarah Butcher
12 Jul 2004
With jobs more plentiful and bonuses higher, graduates are questioning
the wisdom of going back to college
Whether there is ever a right time to leave a well-paid job in order to
spend £40,000 (€60,000) on a course claiming to teach the nebulous
art of management is open to question. Nevertheless, thousands of people
do it every year and many are bankers. Wharton Business School in
Philadelphia says 17% of its Masters in Business Administration (MBA)
applicants are investment bankers, while 26% of applicants to London Business
School come from a finance background.
Banks report they are hiring more MBA graduates
For these people and other would-be investment bankers, the class of
2004 has a couple of things to recommend it. First, there is less
competition to win a place than in recent years. Second, it is easier to find
a job at the end.
Columbia Business School, Wharton and London Business School are among
the colleges reporting fewer applications this year than last. The
number of people taking the Graduate Management Admissions Test (GMAT),
which is usually required to enter MBA school, fell 8% globally in the
past year. Outside the US, the drop was more than 15%.
While interest in MBA courses has fallen, banks report they are hiring
more MBAs than before. Lehman Brothers said its MBA hiring in Europe is
up 65% from last year, though the bank declined to give numbers. At
Bear Stearns, which plans to hire an additional 200 to 300 staff in Europe
in the next three years, a spokesman said the bank is embarking on its
most ambitious MBA hiring programme since the 1990s.
Banks’ hiring plans are already being felt in MBA colleges, which
report a resurgence of interest in employing their students. At London
Business School, banks have hired 50% more MBAs as summer interns this
year than last. Insead, the self-styled global learning network, said
banks are preparing to recruit MBAs in the autumn for the first time since
2001 as well as hiring through summer internships as usual.
Schools claim senior bankers are increasingly keen to make
presentations to MBA students. London Business School has played host to John
Studzinksi, co-head of corporate banking and investment banking at HSBC and
former deputy chairman of Morgan Stanley International, although HSBC
has no MBA hiring programme.
Not only are MBAs finding it easier to get jobs, they are also likely
to be better paid than of late. On Wall Street, Bear Stearns is offering
its first year associates guaranteed packages worth $200,000
(€162,000) in the first year, $250,000 in the second and $300,000 in the third.
Tony Brown, director of staff at Bear Stearns in New York, said other
Wall Street firms have done the same. “It is a market move. Everyone
is reacting in the same way.â€
Guarantees are less common in Europe, though Credit Suisse First Boston
has followed Bear Stearns’ US example. But European MBAs are being
compensated in other ways. According to headhunters, MBAs joining
investment banks in London can typically expect to receive signing on bonuses
of up to £15,000 this year, up from a maximum of £10,000 last year.
Nevertheless, starting an MBA soon may not be a wise move, particularly
if it is intended as a springboard to investment banking.
There are persistent rumbles from banks about what they regard as the
poor value of MBA recruits. The head of European graduate recruitment at
a US bank, usually among the biggest recruiters of MBAs on the
Continent, said line managers are becoming increasingly sceptical about the
qualification.
She said: “We are definitely moving in favour of growing people
in-house. Someone trained by us straight out of university is more loyal and
can deliver more immediately than someone hired from MBA school.
Business managers are starting to say that if we are going to hire outsiders
at a more senior level they should have specialist sector knowledge,
which is not usually provided by an MBA.â€
Jeffrey Pfeffer, a professor of organisational psychology at Stanford
Business School, believes that two or three weeks on an intensive
business programme may be as useful as an MBA course. Others disagree,
arguing that MBAs equip students with a valuable mix of general and specific
abilities.
Although banks are hiring more MBA graduates this year, the trend might
change by the time the next influx of MBAs hits the market.
Anyone who decides now to do an MBA would have to start in 2005 as
deadlines to join this year have passed. Given that most MBA courses take
two years, it would be 2007 before they were ready to work in a bank, by
which time recruitment might have dried up.
The recruiter at the US bank said a movement against the qualification
is gathering momentum. She said: “We’re not about to pull the plug
on MBA hiring entirely – at least, not yet.â€
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Тема: Oversupply
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| Автор:
lk-hj-lk
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Дата: 21.01.04
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Britain has too many graduates, warn employers
By Richard Garner, Education Editor
20 January 2004
More than two-thirds of graduate recruiters believe that Britain has too many university students, according to research published yesterday.
A survey of 215 personnel managers - from some of the country's biggest employers - also revealed that 60 per cent believed the increase in student numbers had led to a "dumbing down" of standards.
The figures, published by the Association of Graduate Recruiters, put business leaders at odds with Tony Blair over his aim to get 50 per cent of young people into higher education by the end of the decade.
Fifty-three per cent are of the opinion that the UK produces too many graduates.The research comes as the Conservative party indicated it was dropping its opposition to student fees - a policy which would have led to a major reduction in student numbers. Asked if university expansion had adversely affected standards, 60 per cent agreed. Eight per cent of young people went to university in 1963 compared with 43.5 per cent today.
More than 60 per cent of the managers believed students would benefit by working while studying. But they were split over whether graduates were equipped with the necessary skills for the 21st century - with 38 per cent agreeing and 36 per cent disagreeing. On whether students should contribute financially towards their education, 50 per cent said yes, with 31 per cent against.
A second leading university announced it wouldoffer bursaries of £4,000 to the poorest students if the Government were successful in introducing top-up fees from 2006. Exeter University followed Cambridge University in announcing the package - which would cost the university £4m a year.
Meanwhile David Blunkett's former top education adviser urged education ministers to ditch plans to replace A-levels and GCSEs with a new English-style baccalaureate.
Conor Ryanadvocated using the existing international baccalaureate, instead of devising a new system,and his proposal will be backed by independent schools when they publish their proposals today for the future education of 14 to 19-year-old students.
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Тема: US job market perspectives
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| Автор:
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Дата: 23.03.04
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Posted on Mon, Mar. 22, 2004
America's Most Coveted Jobs Multiply Elsewhere as 'Offshoring' Proliferates
By Analisa Nazareno, San Antonio Express-News Knight Ridder/Tribune Business News
Mar. 20 - In the next 10 to 20 years, the hottest job prospects for the world's best and brightest could have titles like chief ethics officer, biosystems security analyst, nanotechnology specialist, robotics maintenance engineer or genetics programmer.
But if Americans are going to grow these premium jobs in this country, futurists and economists say the country is going to have to do a better job of educating workers and cultivating entrepreneurs. If not, they say the nation's workers will be traveling to places like Hong Kong, Singapore or even the United Arab Emirates for employment.
When gazing into the future world of work, forecasters hedge about exactly what the jobs of tomorrow will be. They agree, though, that a great part of the nation's work force will be globally mobile, competing against an increasingly educated world labor force and needing continual retraining and education.
And the jobs of tomorrow will be polarized, from the mundane service jobs that most definitely will stay in the United States, to the coveted high-tech and biotech jobs that will be up for grabs globally.
"Technology will allow workers to work anywhere and empower smart people wherever they are, whether they are in Singapore or China, India or Pakistan, England or the United States," said John Petersen, president and founder of the Arlington Institute, a think tank in Arlington, Va., whose researchers use gaming and modeling to anticipate future trends and changes.
"One thing that Americans tend to forget is that there are plenty of smart people throughout the world," he said. "There are a lot more educated people in India than there are in the United States, simply because of the size of that country. And so, it's all going to change, so Americans have to adapt."
The United States will be the origin of fewer and fewer manufactured goods, with production of everything -- from the newest in nanotechnology to heavy concrete pillars -- going overseas and becoming more and more automated.
"I think this will accelerate," Petersen said. "Information flows to wherever it wants to flow, and it flows to the cheapest place where it is that you can make something. At least the smart guys are going to do this and the not-so-smart guys are going to moan about it."
Futurist Thomas Frey of the DaVinci Institute in Louisville, Colo., said while Americans bemoan the loss of jobs to nations like India and China, they've forgotten that investment in new technologies and innovation is what created those jobs in the first place.
"The problem is not that jobs are going overseas," Frey said. "The problem is that we've underfunded innovation in the past years. We don't have the next big thing that will employ all these people who are out of jobs.
"We need to maintain the technological edge. We've been falling behind simply because we've allowed the rest of the world to catch up."
Frey sees invisible nanotechnology playing a greater role in people's everyday lives. He sees automation having more of an impact on the workplace. And he sees biotechnology figuring greatly in our global economy.
And, he said, he sees American scientists and entrepreneurs playing a great role in bringing these technologies to the market -- if the United States responds to its current economic crisis by funding education and innovation.
From inventing spray-on clothing to genetically repairing heart defects, innovation will be the key to pulling the United States out of its current employment doldrums, Frey said.
"Each new technology creates the potential for thousands and thousands of new jobs. It's a matter of getting in there and understanding it," Frey said.
But while Frey sees a future of innovation and new jobs, other futurists worry that such economic activity will take place offshore.
Forrester Research Inc., a Cambridge, Mass., research company, predicted that over the next 15 years, the United States will lose 3.3 million high-end service jobs to "offshoring," particularly in the information technology sector, adding up to a loss of $136 billion in lost wages.
Congress is likely to respond to this trend by mandating protectionism for U.S. jobs. The consequences, they predict, eventually will be hurtful rather than helpful to American workers.
"Politicians are going to call for protectionism and punish companies that offshore, making them noncompetitive in the world market and encourage companies to move their operations overseas completely," said Paul Saffo, the director for the Institute for the Future in Menlo Park, Calif.
Saffo predicted in the late 1980s that electronic books would surface not to replace hard-copy tomes but to offer different "experiences" in sound, music or offer historical context. And he said in 1999 that the Y2K computer problem wasn't as potentially damaging as the people thought who were waiting for the apocalypse to come in the year 2000.
Today, he's predicting that the world's smartest engineers, biotech scientists and medical entrepreneurs will avoid coming to the United States altogether because of increased hostility toward foreigners and tightened immigration barriers in the wake of terrorist attacks.
"There is a wave of Indian engineers who now are saying that they don't feel comfortable here anymore," Saffo said.
These engineers, he said, could be tempted to move to Dubai in the United Arab Emirates, or to Jeddah in Saudi Arabia, where the demand for such engineers and the incentives for corporations to move there are becoming greater each year.
"Iran graduates 50,000 computer-science degrees a year, and they're all looking for jobs," Saffo said. "You can bet they're not coming to the United States. What we're doing here is driving out of this country the very people who are most likely to do the next technology startups."
Along with those foreign engineers who leave the United States will go some Americans who will find their skills in demand in the countries where corporations have relocated, he predicted.
And the jobs most likely to stay in the United States will be service jobs that could only be performed on-site.
"Think of something like getting haircuts, where the location really matters," said Trinity University labor economist Barry Hirsch. "But our notion of location has changed as well because of the Internet and increased travel."
In fact, according to the Labor Department's predictions for employment through the year 2012, the jobs with the largest growth in the United States will be registered nurse, professor or lecturer, sales representative, customer representative, food preparer, cashier, janitor and waitress.
The jobs that will grow the fastest will be in the health care field.
"With the graying of America and the growing field of biotechnology, we're going to continue to see a greater need along the health care spectrum," said Steve Pogorzelski, the president of Monster, North America, the online job-search company known to its users as monster.com.
In recent weeks, Monster has seen an increase in demand for sales representatives, accountants and auditors, administrative support service workers as well as information technology positions.
But Pogorzelski said that while other job categories might ebb and flow in demand, health care-related jobs always see steady and increasing demand.
According to the Labor Department, seven of the 10 fastest-growing occupations in the United States are health care related, with lower-paying medical assistant jobs being the most in need.
Though Pogorzelski isn't a futurist, he does see a future where workers without higher education will receive relatively lower and lower wages compared with more educated workers who strive toward ongoing educational attainment.
"Increasing amounts of educational attainment will be a major issue for competitiveness in the global economy," he said. "It's also imperative for the individual who is concerned about developing a career and making more money. We're going to see a greater scaling of jobs from one end of the educational perspective to another."
Here in San Antonio, the sentiments toward the future of work echo national concerns.
"No matter what the job is, there are always going to be changes in the nature of work," said Alan Miller, director for Alamo Workforce Development Inc. in San Antonio.
"There will always be new techniques, new processes of production and changes in the markets that will continue to change the workplace," Miller said. "While job titles may not go away, what we're to find is that the level of skills for jobs are going to consistently increase. And I think that's a given."
Miller said he thought San Antonio would be well positioned for tomorrow's service-oriented, medical work force of tomorrow because of the city's base of employment in health care.
The city and the nation may have a problem, though, finding the American nurses to take those jobs. San Antonio hospitals continue to hire nurses from the Philippines and other nations because of the shortage of certified and registered nurses.
"This is a critical time for us to focus on education and training because people are going to need higher level of skills -- more so than before," Miller said.
"Because we are in a global economy, we are competing with other nations in the world for skilled workers. And the country that focuses on developing its work force, building the skills of its workers, is the one that will maintain a competitive advantage."
-----
To see more of the San Antonio Express-News, or to subscribe to the newspaper, go to http://www.mysanantonio.com
© 2004, San Antonio Express-News. Distributed by Knight Ridder/Tribune Business News.
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Тема: Mentoring helps to soften blow of the axe
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| Автор:
jhgfdjhgf
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Дата: 24.11.04
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Mentoring helps to soften blow of the axe
Sarah Butcher
22 Nov 2004
Bosses are often too preoccupied to notice potential talent during
cutbacks
When the axe starts to swing at an investment bank, it helps to have
friends in high places. Young bankers who want to build a glittering
career should cultivate friendships with influential superiors, according
to a recent study of the career paths of successful bankers.
Hank Paulson said 80% of Goldman Sachs' value was created by between 15%
and 20% of the staff
Having an influential mentor can not only propel a banker up the ranks,
but also provide invaluable protection when redundancies are on the cards.
Picking the right mentor is the key. Investment banks may employ tens of
thousands of people, but relatively few have any influence.
Hank Paulson, chairman and chief executive of Goldman Sachs, admitted as
much last year when he reflected that 80% of the value at the bank was
created by 15% to 20% of the people. If you want to stay ahead in banking,
it helps to have one of that group on your side.
Successful bankers back this claim. Rama Ayman, head of corporate finance
at Arcelor, the European steel company, and a former director in corporate
finance at BNP Paribas, counts Olivier Barbaroux, former chief operating
officer at the French bank, as a one-time mentor.
Eva Lindholm, a managing director in the government institutions group at
JP Morgan, said her career benefited from the intervention of a member of
the bank's executive committee. Joe Biernat, a director at fund manager
European Credit Management and a former global head of credit research at
BNP Paribas, had a mentor who helped him.
Ayman, Lindholm and Biernat were among 25 bankers, fund managers and
headhunters who participated in the career path study by Shiva Dustdar, an
MBA student at London Business School. Dustdar, who works at the European
Investment Bank, found that the careers of more than half her subjects had
been shaped by "significant other people".
Banks like Goldman Sachs and Morgan Stanley run mentor programmes for
junior staff. However, Dustdar's significant others were not officially
sanctioned. "None of the people I spoke to were talking about formal
mentors. It was always an informal thing," she said.
In many cases, they were taken under the wing of a high-flying boss. Jean
Facon, a headhunter at Christopher Beale Associates and former member of
the European management committee at JP Morgan, said two former bosses at
the bank looked out for him: "They were the people I went to if my team
got shut down, or to make sure I was paid properly at the end of the year.
I didn't realise they were my mentors at the time: it's only in retrospect
I realise what they did for me."
When redundancies are in the air, a high-ranking guardian is particularly
helpful. Mehmet Dalman, former head of investment banking at Commerzbank,
invited former colleagues to join his new hedge fund venture, enabling
them to remain in work despite the 490 investment banking job cuts
announced by the bank after he left.
Facon said his influential advocates at JP Morgan helped find him a way
out of the potentially disastrous role as head of the Moscow office during
the Russian crisis of 1998. He went on to restructure the Zurich office.
Lindholm said it is particularly important to have someone championing
your cause during a downturn: "If a firm is going through a downsizing
exercise and no one really knows about you or the standard of work you
perform, they will have a hard time trying to assess the value of your
contribution."
However, just as other significant people can enhance career prospects,
the intervention of a senior colleague can stifle progress. Nearly a
quarter of Dustdar's interviewees said their careers had been adversely
affected by other people. Self-absorbed, self-centred bosses were the main
culprits.
One interviewee described a personality clash with a manager who tried to
have him fired: "She did everything she could to get rid of me but one of
my mentors stepped in and arranged for me to move elsewhere."
When redundancies are threatened, it also helps to have broad experience,
rather than being a specialist. Lindholm said: "I worked in debt capital
markets, asset management and emerging markets before moving into
investment banking coverage.
"While you can do extremely well by specialising in a particular field,
like derivatives, you may be more vulnerable to job loss if business in
that area turns down."
Ayman attributes his avoidance of redundancy not only to benevolent
mentors, but also to being willing to change his role to suit the markets'
mood. He shifted from emerging markets into oil and gas after the Russian
crisis, moving to Arcelor in 2001 to spend more time with his family.
He said bankers who are not proactive risk career derailment: "You need to
be alert, not only to what is happening in your own organisation, but also
to your own area or sector. If your sector is on a diminishing trend, you
need to position yourself proactively to avoid it."
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Тема: Day in the Life: Sallyann Birchall, head of graduate recruiting
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| Автор:
ttt
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Дата: 26.02.04
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Sallyann Birchall is head of UK graduate recruiting for Deutsche Bank. She has worked as a graduate recruiter at Deutsche for over seven years and remembers when, in its infancy, the investment bank in London only recruited 20 graduates a year. In 2003 Deutsche recruited over 250 graduates for their London-based operations. Having worked in New York and after establishing graduate recruiting in Asia Pacific, she has returned to London and is currently managing recruitment for 2004/05.
0615 My day begins early. What I do next depends on my schedule: if I've got back to back meetings I usually go straight to the gym. If I know the day will be less hectic, I head for my desk and try to visit the gym at lunchtime. 0730 Whatever I do first thing, I'm usually in the office no later than 7.30 - 7.45 am. I grab a coffee and look through all the urgent emails that have arrived overnight. There are often small problems to deal with - a US business school might have advertised our visit on a day we're due somewhere else, or a student might require specific feedback as to why their candidacy is not being taken further. They all require attention: graduate recruitment is about creating a flawless profile on campus; everyone we touch should have a positive experience. It can be a very time consuming business!
0815 Interviews usually begin at 8.30, so at 8.15 I start preparing for the first candidate. Every year we interview over 3,500 candidates in London alone. It is important to have a healthy flow of graduates coming in to our business regardless of market conditions.
0830 - 1230 The first set of interviews takes place. During interview season, the bulk of which runs from September to March, I interview about 13 people a day, accompanied by someone from the business. Each interview takes half an hour. First round interviews are designed to select the strongest candidates, who then go forward to meet business representatives.
The quality of candidates usually depends on where we are in the cycle. Early in the season, we interview from our target universities and may see as many as four or five strong candidates every day. Later in the season, we may only see one good candidate a day or even none at all.
The best candidates are up to date and know exactly what's going on in investment banking. Nevertheless, if I see someone who I feel has real potential, but who needs to do some extra research on a particular area of the industry, I may spend some personal time with them to get up to speed ready for their second round inerviews. This part of my job I get real satisfaction from.
Suitable candidates usually stand out from the crowd. We're looking for bright, articulate people with a real enthusiasm for the business. Good communication skills, good networking and an ability to build a rapport are essential. It's a difficult combination to find; we see a lot of people who are highly intelligent, but lack that extra spin.
Of the five candidates I interviewed this morning, one was particularly good. He had won a prize for an investment competition, and he talked about it very enthusiastically and articulately. Unlike some candidates, you could see he wasn't exaggerating his interest in the industry.
1230 I take a short break for lunch and if there's time, I organise the notes I made during the morning. Unfortunately, a lunchtime trip to the gym is usually out of the question during an interview day!
1300 I'm back in the office for more interviews. Candidates this afternoon are generally less impressive than the ones I saw in the morning. The classic example of a bad candidate is someone who looks immaculate on paper, but is completely unprepared for the interview and has not done any basic research about our industry or Deutsche Bank.
This afternoon, for example, I saw a candidate who came from a good university, had an excellent school education, captained the hockey team, and had relatives who have worked in banking. However, she was unable to demonstrate why she wanted to work in our industry.
Most candidates who come across as lacking conviction have failed to undertake even the most basic research, which is done easily enough by reading newspapers and looking on the internet.
This afternoon, I asked someone what he had been reading and he mentioned something from about six months ago, as well as regurgitating a deal which happened a year ago. Upon questioning him further it was soon apparent he hadn't expected quite such detailed questioning!
1730 Interviews finish and I head back to the office to write up my notes and deal with everything else that's come up during the day. It's usually 8 or 9pm before I finish, and by that stage I'm keen to get home and relax.
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Тема: Re: (1) Wharton reading room
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| Автор:
whoknows
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Дата: 03.05.07
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Young, Gifted, and Not Getting Into Harvard
By MICHAEL WINERIP
ON a Sunday morning a few months back, I interviewed my final Harvard applicant of the year. After saying goodbye to the girl and watching her and her mother drive off, I headed to the beach at the end of our street for a run.
It was a spectacular winter day, bright, sunny and cold; the tide was out, the waves were high, and I had the beach to myself. As I ran, I thought the same thing I do after all these interviews: Another amazing kid who won’t get into Harvard.
That used to upset me. But I’ve changed.
Over the last decade, I’ve done perhaps 40 of these interviews, which are conducted by alumni across the country. They’re my only remaining link to my alma mater; I’ve never been back to a reunion or a football game, and my total donations since graduating in the 1970s do not add up to four figures.
No matter how glowing my recommendations, in all this time only one kid, a girl, got in, many years back. I do not tell this to the eager, well-groomed seniors who settle onto the couch in our den. They’re under too much pressure already. Better than anyone, they know the odds, particularly for a kid from a New York suburb.
By the time I meet them, they’re pros at working the system. Some have Googled me because they think knowing about me will improve their odds. After the interview, many send handwritten thank-you notes saying how much they enjoyed meeting me.
Maybe it’s true.
I used to be upset by these attempts to ingratiate. Since I’ve watched my own children go through similar torture, I find these gestures touching. Everyone’s trying so hard.
My reason for doing these interviews has shifted over time. When I started, my kids were young, and I thought it might give them a little advantage when they applied to Harvard. That has turned out not to be an issue. My oldest, now a college freshman, did not apply, nor will my twins, who are both high school juniors.
We are not snubbing Harvard. Even my oldest, who is my most academic son, did not quite have the class rank or the SATs. His SAT score was probably 100 points too low — though it was identical to the SAT score that got me in 35 years ago.
Why do I continue to interview? It’s very moving meeting all these bright young people who won’t get into Harvard. Recent news articles make it sound unbearably tragic. Several Ivies, including Harvard, rejected a record number of applicants this year.
Actually, meeting the soon-to-be rejected makes me hopeful about young people. They are far more accomplished than I was at their age and without a doubt will do superbly wherever they go.
Knowing me and seeing them is like witnessing some major evolutionary change take place in just 35 years, from the Neanderthal Harvard applicant of 1970 to today’s fully evolved Homo sapiens applicant.
There was the girl who, during summer vacation, left her house before 7 each morning to make a two-hour train ride to a major university, where she worked all day doing cutting-edge research for NASA on weightlessness in mice.
When I was in high school, my 10th-grade science project was on plant tropism — a shoebox with soil and bean sprouts bending toward the light.
These kids who don’t get into Harvard spend summers on schooners in Chesapeake Bay studying marine biology, building homes for the poor in Central America, touring Europe with all-star orchestras.
Summers, I dug trenches for my local sewer department during the day, and sold hot dogs at Fenway Park at night.
As I listen to them, I can visualize their parents, striving to teach excellence. One girl I interviewed described how her father made her watch the 2004 convention speeches by both President Bush and Senator John Kerry and then tell him which she liked better and why.
What kind of kid doesn’t get into Harvard? Well, there was the charming boy I interviewed with 1560 SATs. He did cancer research in the summer; played two instruments in three orchestras; and composed his own music. He redid the computer system for his student paper, loved to cook and was writing his own cookbook. One of his specialties was snapper poached in tea and served with noodle cake.
At his age, when I got hungry, I made myself peanut butter and jam on white bread and got into Harvard.
Some take 10 AP courses and get top scores of 5 on all of them.
I took one AP course and scored 3.
Of course, evolution is not the same as progress. These kids have an AP history textbook that has been specially created to match the content of the AP test, as well as review books and tutors for those tests. We had no AP textbook; many of our readings came from primary documents, and there was no Princeton Review then. I was never tutored in anything and walked into the SATs without having seen a sample SAT question.
As for my bean sprouts project, as bad it was, I did it alone. I interview kids who describe how their schools provide a statistician to analyze their science project data.
I see these kids — and watch my own applying to college — and as evolved as they are, I wouldn’t change places with them for anything. They’re under such pressure.
I used to say goodbye at my door, but since my own kids reached this age, I walk them out to their cars, where a parent waits. I always say the same thing to the mom or dad: “You’ve done a wonderful job — you should be very proud.” And I mean it.
But I’ve stopped feeling bad about the looming rejection. When my four were little, I used to hope a couple might go to Harvard. I pushed them, but by the end of middle school it was clear my twins, at least, were not made that way. They rebelled, and I had to learn to see who they were.
I came to understand that my own focus on Harvard was a matter of not sophistication but narrowness. I grew up in an unworldly blue-collar environment. Getting perfect grades and attending an elite college was one of the few ways up I could see.
My four have been raised in an upper-middle-class world. They look around and see lots of avenues to success. My wife’s two brothers struggled as students at mainstream colleges and both have made wonderful full lives, one as a salesman, the other as a builder. Each found his own best path. Each knows excellence.
That day, running on the beach, I was lost in my thoughts when a voice startled me. “Pops, hey, Pops!” It was Sammy, one of my twins, who’s probably heading for a good state school. He was in his wetsuit, surfing alone in the 30-degree weather, the only other person on the beach. “What a day!” he yelled, and his joy filled my heart.
E-mail: parenting@nytimes.com
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Тема: Выбирайте лучшее! Рекомендуем.
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| Автор:
ageymas
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Дата: 10.11.07
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Рекомендуем!
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Тема: Строительные справочники
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| Автор:
ageymas
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Дата: 11.11.07
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Тема: Узнай погоду!
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| Автор:
ageymas
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Дата: 11.11.07
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Всем добрый день!
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А самое интересное, что [URL=http://tutpogoda.ru/]прогноз погоды[/URL] можно посмотреть на день, 3 дня и даже на неделю это просто очень удобно. Мы все были просто в приятном шоке.
положите этот сайт себе в закладки, потому он точно вам пригодиться.
http://TutPogoda.RU/ - [B][URL=http://tutpogoda.ru/]большой погодный портал[/URL][/B].
Всем спасибо за внимание!
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All high-powered racing engines have stochastic fuel injection. Stochastic fuel
injection is not a feature that is normally included in the engines of
production-line vehicles. Passenger sedans are production-line vehicles.
Which of the following conclusions can be drawn from these statements?
A) Passenger sedans do not usually have stochastic fuel injection.
B) Stochastic fuel injection is found only in high-powered racing cars.
C) Car manufacturers do not include stochastic fuel injection in passenger cars
because they fear accidents.
D) Purchasers of passenger cars do not normally purchase stochastic fuel
injection because it is expensive.
E) Some passenger sedans are high-powered racing vehicles.
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