The Whelps of Wall Street: What It’s Like to Work as a Junior Banker in the Post-Crisis Era
Kevin Roose moved to New York immediately after the financial crisis and watched as young people like him took jobs on Wall Street. Who were these people flooding to these jobs so soon after the worst recession since the Great Depression? Roose had previously written a book about a semester he spent undercover at Liberty University, one of the largest Evangelical Christian schools in the world, and it struck him that Wall Street was its own religion: it has a subculture with clearly defined rules, and charismatic leaders who tell you how to act and what to wear.
Initially, Roose thought about going undercover as a banker, but as an English major who dropped an economics class after three weeks and a name that was easily Google-able, he switched gears and decided to shadow young bankers for three years as they left college and started their careers on Wall Street. His book, Young Money, is about what it’s like to work as a junior banker in the largest financial institutions in the world, and how Wall Street’s culture and recruiting efforts have shifted in the post-crisis era. I spoke to Roose while he was in town this week promoting his book.
A young banker starting out on Wall Street works a pretty rough, and unglamorous schedule. This isn’t “The Wolf of Wall Street.”
I started talking to a few people I found, and the stories they were telling me turned the stereotypes on their head. You think of Wall Street as this sexy, rollicking, cocaine-addled, place, and it just isn’t. The stories they were telling me were that they hadn’t seen daylight in six months, and were working 100 hours a week. There’s this thing called the banker 9-to-5, which is that they start work at 9 a.m. and are working until 5 a.m. It was crazy that no one had really written about this, but I think it’s because they scare the hell out of these young bankers. The first week when they are brought in for training, they are told, “Do not talk to the press. If your name ever appears in the newspaper and it’s not your wedding announcement, you’re fired.” So there’s been a hole in the coverage. There are thousands of books written about CEOs and billionaires, but no one had examined the subculture of young men and women who do this after college as their first jobs and actually making the machine run.
At the beginning of your book, you talk about taking a class through Training the Street, which helps prepare people to work on Wall Street by learning how to create financial models in Excel. One of the surprising things to me was that there were psychology majors taking the course. When you think of people who take jobs on Wall Street, you think of economics or finance majors, not history and psychology majors. It sounds like if you’re good at Excel, and can pick things up quickly, you can work on Wall Street, no matter what you studied in college.
I think that’s the case, and that used to be the case. For many years the way that Wall Street recruited was to go on to Ivy League campuses and say, “come one come all, you don’t have to be an econ major, we’ll teach you everything you need to know.” And then they put you through a summer’s worth of training and by the end of it, as long as you’re smart and willing to put in the effort, a lot of this stuff can be done by most intelligent people. You don’t have to be the next coming of Warren Buffett to do this stuff.
And that’s actually what the guy running Training the Street told me. If you’re willing to put in the time, you can do it. It’s more about perseverance than ability. That’s a very useful tactic for Wall Street firms in the past because it meant that they got the best and the brightest—they got the history majors and archeologists and the Rhodes scholars, because what they really cared about was the pedigree, and they could teach the rest. It’s a little different in some divisions—if you’re hiring for the quant desk, you want someone who can do computer programming—but for investment banking, and some types of trading, you or I could theoretically learn it in six months.
One of the young people you followed, Chelsea, seemed to have some trouble picking things up initially. She was placed in the public finance division of Bank of America Merrill Lynch, which was an area she admitted she barely understood. She told you, “I’m the dumbest person here, I don’t understand any of this, and I’m just so overwhelmed by the lingo and everything else.”
You have this sort of uneven start. Some people come into Wall Street as interns and sophomore years of college, so by the time they go in for their real jobs they’ve already done two summers as banking analysts. And then there are the people who go to Wharton or studied finance specifically, so they come in ready to hit the ground running. And then you have the English majors who need a bit more training. So at the beginning there is a sort of bifurcation of abilities, but really by the end after six months, it evens outs. Some people never catch up and they get filtered out, but most people do if they’re willing.
How many people did you talk to before settling on the eight people you followed in your book?
I talked to dozens—some were one conversation, some were many.
And you found people to talk to by sneaking into networking events and going to parties?
I went to a lot of social gatherings, and I spent a lot of time drinking Bud Light at bad bars. I spent a lot of time at networking events, asked friends of friends of friends, and mined LinkedIn and things like that for names. When it came down to selecting, I thought eight was a good number, because it was not too small so that it wasn’t just a small slice of the industry, and it wasn’t too big so you couldn’t keep track of who’s who. If I just had four or three people, you could have fairly made the accusation that this was one firm, or one slice of it. And I wanted to make sure I had a few women and people of color, and that it wasn’t just four lax bros from Duke, you know? Eight felt like the right number. I did feel like I was casting a reality show. I need the one who’s going to be the responsible adult! I need the one who’s going to pull benders and get into trouble! And those felt like the right eight, and those are the ones who agreed to let me intrude in their lives in this very intimate way.
Why do you think they were so open to you intruding into their lives?
I don’t know. It’s crazy. At first I had no idea why they were talking to me. There was nothing in it for them. They were putting their careers at risk, and it’s not like I was paying them. I was going to change their names for the book anyway. At first I was very confused, and then near the midpoint, it became beneficial to them to have an outside observer listen to them. It was like therapy. They got to go to the bar and pour out their woes to someone who didn’t work in the industry, but could understand what they were talking about. If they said, “Ah, I had to do a turn on a pitch book last night,” I would know what that meant, but I wasn’t one of them. So I was a sympathetic ear. For a lot of them it got to be like therapy, and I think it made sense for me after that. As they go through banking their social circles constrict, and they eventually end up with most of their friends being other bankers. So to have someone who was not in that world to talk to, I think—I’m still confused about it honestly. At one point one of them said, “Why am I talking to you again?” But we’re now at a point where they like me and we’re friendly, and have relationships that are two, three, almost four years old, so it doesn’t feel as odd to them anymore.
One of the most surprising things to me was that for most of the people you talked to, money wasn’t the main motivating factor for working on Wall Street. It seemed as if one of the bigger draws for going into banking was, as you put, how “risk-adverse” the job was. It felt really safe for these young people to have a job lined up before graduation. Others liked the prestige of working at a big bank or the actual work they’d be doing. The money was nice, but there were all these factors at play.
I want to qualify this because I think for some people it is all about the money. If you graduate with a ton of debt, or if you come from a lower or middle class family and want to help your parents buy a new house or whatever—there are people like that. But the average person who comes to Wall Street after college is there because there’s a social pressure—all their friends were doing it—or it’s because it was easy: I dropped my resume in a box; they called me and wanted to interview me; they interviewed me and now I have a job offer in September of my senior year.
Banks are very good at recruiting. But I think there’s sort of a third thing, and it’s a harder thing to pin down, which is that for many years, there has been this path, this elite, well-bred path where you go to private nursery school, then you go to private day school, and private high school, and then you go to Harvard. And then you go to Goldman Sachs—that was the next step on that path. And it’s not that they’re all gunning to being president some day. That was seen as the next step on their path. I think that’s a factor too. So money is just one of just three or four reasons that young people go to work on Wall Street.
Think about when you and I were 22. I didn’t necessarily know what I wanted to do. I didn’t have a job lined up for after graduation, and it’s scary. It’s scary to be 22, and done all the right things, gone to the right college and to be facing this abyss. And that’s the exact moment when the banks show up. If I had been in a different place in my life, or had been less attached to the idea of being a writer, maybe I would have fallen into it. I certainly know people who did—who came into college with no intention of becoming bankers, and then four years later they’re setting off for Wall Street.
One of the other interesting things to me was how these young analysts were able to divorce themselves from some of the moral and ethical dilemmas plaguing Wall Street. Things like the Libor scandal, Goldman Sachs manipulating the markets to raise the prices of consumer goods, HSBC laundering money for drug cartels, the series of indictments—these young Wall Street workers talked a lot about why they were dissatisfied with their jobs, but not a ton about some of these big picture things. I guess if you’re working 100-hour weeks, you’re too tired to think about the big picture.
“I haven’t done my laundry in three weeks—I’m not going to be philosophizing what I’m doing right now.” I think there’s a bit of the “post-purchase rationalization.” Once you’ve made this choice, you have to rationalize it to yourself. So when news breaks of a scandal or an indictment, the easiest way to do that is to say, “Well, that’s those people.” I think that’s the way it works with a lot of professions. When you see a journalism scandal, you say, “Well, that’s that publication!” It’s not unique to Wall Street, though it does happen a lot there. What was surprising to me was that even though these people were too busy to think about the big picture, as I got to know them better, as they got a little bit more free time, and as they got more dissatisfied, they had a lot of doubt. They were not just putting the blinders on. It was shocking to me how much time they spent wondering if this was the thing they should be doing with their lives and questioning the things they were being told.
I almost want to call them naive, because they come on to Wall Street thinking that they can make a difference. And it’s not their fault, because the recruiters—they’re very slick—and they come in and say, “Come to Goldman Sachs. You can make a difference as a first-year analyst.” They tell you, “You’ll be working on transactions involving some of the biggest companies in the world. You’ll be helping underserved communities get access to capital.” They make it almost sound like charity work! And if you’re 21 or 22 and don’t know better, you can really believe it. As much as I want to call them naive, when the scales are pulled from their eyes, and they see what they’ve gotten themselves into, that’s a really painful thing to experience.
Derek was one of the most interesting people to me. He was very aware of his circumstances. He had grown up in Wisconsin and gone to a state school. He made it to Wall Street and eventually got job in private equity. His firm bought struggling companies to turn around and resell, and no matter what happened to those companies, his firm made money. Meanwhile, his father was a small business owner in Wisconsin who had taken out a business loan to continue paying his employees rather than laying them off. So Derek was starkly aware of these two realities and was unsure of how ethical his line of work was, but he also didn’t want to give up his life in New York and his $200,000 salary.
I think there’s an element of golden handcuffs. You’re making all that money, and you get accustomed to it and you find it hard to go back to making $50,000 a year. For him I think it was wrapped up in all these feelings of, “I’ve made it out.” Like I come from the Midwest, and when you’re from the Midwest, there’s a real sense of pride when someone makes it out. And for a lot of people it doesn’t happen all that much. People don’t go out of state to go to college or move to go to work in New York or L.A., and when it happens it becomes a big part of your identity. You’re the kid who left. And so I think he felt like if he went back, and if he tried to help his dad instead of working in private equity, it would sort of being like failing or giving up—I don’t want to speak too much for him, but I feel like there’s a lot going on his mind. I think part of what was interesting to talk to him was that he was a walking paradox. He could not make up his mind about who he was, and he was trying to on one hand enjoy the fruits of what his success had gotten him and on the other, he felt really guilty and removed and was feeling the familial obligations back home. I think for me, he was one of the most, if not the most interesting person in the book, because he was the person who showed most clearly the benefits of working on Wall Street and the costs of it.
All of the people you followed were so thoughtful and had nuanced viewpoints of what they were doing and why. Soo-jin was looking at everything from the perspective of being a woman and a minority working in a mostly straight white male industry. She struggled a little bit to find women higher up in the chain who could act as a mentor for her. And none of them were, well, jerks—the stereotype of a Wall Street banker. You realized this at one point in your book, and you went to a Fashion Meets Finance event where male bankers go to meet women who work in the fashion industry and want to meet someone with money (and, surprise, you did meet some jerks there). But overall, do you think the upcoming generation of young Wall Street workers are more thoughtful, or do you think that it was just because none of the jerks wanted you following them around?
It might have been that! A jerk would not have agreed to put his or her career at risk to talk to a journalist. But I also think, it’s tough, because I want to say that the culture is changing because I think the people who are coming in are different than the people coming in 20 years ago. But the teachers are the same. The lessons by and large are the same as they were. So even if they come in different, they all end up in the same—the culture is so strong and the pressure to adopt it is so intense. It’s really hard to stay apart from it. I sort of wish I had a cartoonish, douchebag to make fun of, and I think I met some at Fashion Meets Finance. I think I was also less interested in the stereotype. We all know the stereotype! We’ve all seen the movies and I think even if you interviewed the douchebag and got him to talk about this stuff—maybe I’ve gone native here—but I think even those people would have interesting things to say about their role in the world. Even if all they’re saying is, “Look I make a lot of money, and my job is important and I’m improving the capital markets and that is an important thing.” Even that person is expressing some kind of worldview that I find interesting.
Do you think any of the eight you followed will eventually be tainted by the money or the culture and “turn” into a stereotypical executive?
They might. There are a few who are still in finance, and who knows, I may see them in 10 years on their yacht doing cocaine with models, though I sort of doubt it. That’s not incentivized in the culture anymore. It’s not sexy anymore. I tell people that and then “The Wolf of Wall Street” comes out, and it’s like, “ahhh, I was just trying to tell you that banking is boring,” but it really is. William Cohan wrote a good thing in the Times the other day saying that “The Wolf of Wall Street” is a period piece. It’s done. But in some ways focusing on it as a cartoon puts at risk that you’re going to ignore the things that we can do to make it safer. So you can bust frauds like Jordan Belfort. You can spend all your time going after these ridiculous villains. There will always be those guys, but what you can do is fix the parts that aren’t so sexy, like write regulations that reins in the banal risk-taking that goes on and not just the dudes with the yachts.
And you point out that legislation like Dodd-Frank and Basel III have changed some things in banking. And also that the culture wants to become more diverse, welcome more women, and is actively recruiting them. They’re telling the bankers not to hold any more meetings at strip clubs.
Did you see the thing the other day about Goldman Sachs recruiting at Harvard? How they were giving out nail files and vanity mirrors? That to me was illustrative of a couple things: Good for them for trying, but it’s also not good for them. You have to do this thing another way if you want Wall Street to be a different place. And I think they’re sort of learning. I think Dodd-Frank has made a difference on the financial side of things and Basel III has—banks are less leveraged. They’re smaller. They’re still too big, but they’re smaller. So I think it’s a much different place than it was in 2006. The people who say that nothing has changed since 2006 are kidding themselves. You ask anyone who works on Wall Street they’ll tell you—well not like it’s night and day, but that it’s night and, you know, early afternoon.
Two young analysts—Jeremy and Samson—became fast friends after enjoying their work at Goldman Sachs, but then quickly became disenchanted after a few months. Jeremy began to think of “escape plans” and Samson literally put a giant countdown clock in his bedroom to the day that he would get his last bonus and quit his job. Do you think it’s because the work took a toll on them? Wall Street banks have talked lately about cutting work hours to make the lives of junior bankers a tiny bit easier.
Although they were two of the characters who were the most disenchanted, they were actually the ones with the best hours. They weren’t pulling all-nighters. They were on the sales and trading side. They were working market hours. So it wasn’t so much the hours. It was the hothouse environment that they hated. They thought that the people around them were boring—it’s not that they were evil. Some of them thought they were evil. But it was more like, “man I’ve got to work around these people for the rest of my career?” I loved when they started calling the Goldman headquarters Azkaban, because I think that illuminates how a lot of people on Wall Street feel about their workplaces. You’re not free. You’re not your own person. You belong to a giant entity. And for them it was the lack of autonomy, the fact that one small mistake could get you reamed out. It’s a really tough environment to work in. And even if the hours were better, I don’t think it would have mattered. There’s something about that work that seems to make people really disenchanted. It might have to do with this millennial—and I hate the world millennial—
I do too.
You know what I mean? The sort of expectation that people these days want more praise and positive feedback all the time, and can’t handle criticism. And maybe some of it is true. There’s probably a big difference between the way someone today reacts to criticism at a Wall Street bank than maybe someone 20 years ago. I just think of being in that environment around a manager who doesn’t have any kind of bedside manner—that can take a toll too.
And they were both good at their jobs. Jeremy in particular was told by an executive nicknamed The Senator that he was one of the best analysts he had worked with, but that it didn’t look like he cared about being there. Again, money didn’t seem like a motivating factor here. Jeremy asks The Senator what motivates him at Goldman Sachs, and the Senator a little taken back, kind of spits out, “Obviously, it’s the money!”
I mean, look, these are kids who have tons of options to make money. In “Wall Street 2,” Shia LaBeouf’s character is financing green energy companies. So he works on Wall Street and is also saving the world. That’s the ideal for young people on Wall Street: If you can do it while financing windmills or organizations that are helping people get access to medicine, or whatever—that is the dream. That’s why I think people who are interested in banking are now interested in tech because there’s that overlay of do-gooderism or do something that’s a little more humanitarian than shaving cents off of a trade.
Jeremy and Samson seemed so miserable and I was rooting for them to quit and do something else. But something seemed to be holding them back—they didn’t like the idea of leaving the well-paid jobs they hated for an uncertain future. Which is funny to me, because being worried about an uncertain future is what nearly every college senior on the verge of graduating worries about. Their recruitment into Wall Street sort of allowed them to delay this.
And I think in some ways that Wall Street has functioned as a delay mechanism. You don’t have to figure out what you want to be. And I think that one of the smartest things that Teach for America did was make itself a two-year commitment just like the banks, because people who are seniors in college want some kind of certainty. They want to know that they’re not going to be unemployed. These are people who’ve connected all the right dots their entire lives—they are very Type A. And they want to move from institution to institution without a break in the middle and so Teach For America saw what Wall Street was doing, I think—I don’t have any intel—but I think they probably looked at what banks and consulting firms were doing and saying, “two years is about the right amount of time. We don’t have to pay them a ton, but if we promise them that it’ll look good on their resume, that they’ll be able to do whatever they want afterwards, it won’t close off any doors and it’ll give them structure and stability.” And you can see it now: One in every six Ivy League seniors applies to Teach for America—it’s insane. And that’s probably the best proof that it’s not all about the money for a lot of college students, because they’re willing to work for a little bit of money teaching in the Mississippi Delta if it means that they’ll be able to put off some big decisions for a few years.
Can I ask you something? Was there anything you would have liked to have seen more of in the book?
Besides the jerk thing, it would have been great to get a better sense of what kinds of lives the analysts were hoping to build down the line. I know it’s a difficult thing to imagine at 22 or 23, but did any of them want a house in the Hamptons? One of them gave up medical school to work in banking. Did he want to return to medicine later?
I think what was interesting to me and what didn’t make it into the book in as clear a form as I would have liked it to is that there are people in finance who are like, “My goal is to make as much money as possible so I can do good with it. If I’m an ethical person and a pragmatist and if I’m thinking about the world in utilitarian terms—Bill Gates can do more for the world than say, Tom Gates—then I’m going to try to become Bill Gates!” And they try to justify their pursuit of wealth that way by saying, “I’m going to spend 20 or 30 years making an assload of money, and then I’m going to set up a foundation and do something great. I think there are problems with that.
As you accumulate money, your priorities change. People start—instead of setting up a foundation—they give money to their Ivy League universities and do other things with it, so I don’t know if that pans out for a lot of people, but is something that I’ve heard young people say on Wall Street.
Derek at one point said, “What can I do to give back?” And I don’t think he was putting me on. I think he was trying to really think about what he could do. The house in the Hamptons will happen for some of them. Those who stay in finance will probably live the lives of the older bankers we see today. I hope they also give to charity.
Do you think fewer college graduates are choosing to work on Wall Street because of the tech sector boom in the last few years? Occupy Wall Street was also significant in that these young bankers perhaps saw for the first time with their own eyes how much anger people had for the industry they worked in. As you point out, they went onto their social media accounts and saw so many of their friends and classmates publicly supporting the OWS movement. Yale senior Marina Keegan wrote an op-ed in The New York Times about college students organizing and “combating Wall Street recruitment.” So with the tech boom and this backlash against working on Wall Street, do you think more students—especially the ones at elite universities—are choosing other options?
I think there have always been options. A graduate from Harvard can go anywhere. Go to IBM, go to GM. Pepsi. Any nonprofit will hire these people. They are very smart and very talented and very well-credentialed. There has always been this fallacy that banking is the only way to make money. It might be the only way to start making six figures straight out of college, but I think what’s happening is that, and I say this in the book, that banking has turned from an opt-out to an opt-in at a lot of schools, where a lot of college student aren’t only making a decision of where to spend two years of their lives, but they’re also making a moral decision. And so that’s a big filter.
There used to be a lot of people who were willing to give two years of their lives to Goldman Sachs, or J.P. Morgan, or Bank of America, and now they are scared of what their friends or parents would say. No wants to be hated for what they do. And so, I think when you’re considering—and there is a little bit of a tech backlash. What’s funny is that as soon as all these finance guys start moving into tech everyone started hating on tech. But I think tech is still somewhat more popular than Wall Street. I think there’s a sense that, “Yeah, if you can do the thing that pays you well, and gives you better hours and makes you say that you are proud of where you work when you meet someone new, then that’s a big thing.”
Some of these young analysts often resorted to lying about where they worked. Jeremy was one of them.
He would say he was a consultant! I mean one of the things that inspired me to write this book in the first places was that I was at a dinner party and this girl announced that she worked at Goldman Sachs and she was so sheepish about it. It was so insane, it was so telling to me. In 2006, you would have led with that. That would have been your calling card, and a couple years after the crash it was like she was confessing to be an arms dealer. That was one of the things I wanted to explore.
So what’s changed overall now?
I think it’s changed on two fronts. I think that the college students who are going to Wall Street now are—it’s not like the dilettante grab bag it used to be. A lot of them are going to be econ and finance majors. And I think Wall Street banks are realizing too that it’s nice to have a bunch of Harvard kids, but what they really want is a bunch of people will build careers there, who aren’t going to bolt at the first sign of disillusionment. If I were in HR at a bank, I would want to hire the talented kid from Rutgers over the “maybe I’ll do this for a couple years” kid from Harvard or Yale. That guy or girl is going to work much harder and they’re going to stay. They’re not going to jump after two years to go pursue their real passions.
With some of the gradual changes, do you think that the Kappa Beta Phi culture won’t be a thing anymore?
I hope not. God, I hope not. It’s a terrible event. It offends me more than just about anything I’ve ever seen. This should not happen. What was depressing was that the year after, they still had the dinner, but they hired a whole bunch of security guards. Which is depressing. You’d think that after being embarrassed, they would reevaluate. That was really one of the most shocking and depressing things I’ve ever seen.
See also: A Friendly Conversation With a Banker
Kevin Roose it the author of Young Money, available now in bookstores everywhere.