Perhaps some high-achieving types feel pulled to Wall Street because finance is something they and their parents have heard of, because they know it is associated with a certain amount of prestige, power, and money, and because what really are the alternatives?
The Wall Street bonus pool may be double the full-time minimum wage earnings combined, but an individual bonus could be twelve times as much as a minimum-wage worker earns.
Theory: Expecting X and getting X+ = happiness; expecting Y and getting Y- = unhappiness, even if Y- > X+.
There is a secret fraternity on Wall Street called Kappa Beta Phi whose inductees include successful financiers like Michael Bloomberg and former Goldman Sachs chairman John Whitehead. Each year the fraternity hosts an annual black tie dinner event to welcome new inductees, whom they force to dress in drag and perform skits and songs.
A private equity firm named Blackstone bought credit default swaps against a Spanish gaming company called Codere, betting that Codere would fail to make its debt payments on time, and then paid Codere to purposely miss a debt payment so that it would receive a payout triggered by the swaps. Blackstone made at least $15.4 million through the scheme, which was legal. On The Daily Show, Jon Stewart compared the scheme to buying insurance on a restaurant, and then burning down the restaurant to collect the insurance money.
Chris Arnade, a former trader who worked on Wall Street for 20 years, explains in The Guardian why it’s so hard to be ethical while working on Wall Street (a new report shows that 53 percent of executives in the financial services industry say that “strict adherence” to ethical standards “would make career progression difficult”). It’s not surprising that money and greed would produce unethical behavior, but Arnade says that unethical behavior was supported by those around him.
Related to my post earlier this morning about enforcement at the Securities and Exchange Commission, hedge fund giant SAC Capital Advisors has agreed to plead guilty to insider trading, and the Times says this is “the first large Wall Street firm in a generation to confess to criminal conduct,” which is pretty remarkable.
You know that uncomfortable scene in The Devil Wears Prada when Anne Hathaway snorts when the Meryl Streep and the other editors are trying to put together an outfit for a shoot? The lesson was you shouldn’t pretend that clothes don’t matter at a place where everyone cares about clothes. Apparently, everyone cares about what you wear at Goldman Sachs too.