OT: shortage of investment bankers

[Allthumbs]

and the recession

eventually but not yet

[Bruce]

Indeed, and on the trading floors it is still often the case.

[Allthumbs]

"daft" sums it up. Unless you believe that somebody being *paid* to credit rate by the bundle owners might have problems of cupidity rather than stupidity?

[Huge]

It varies. FX spot traders tend towards the barrow boy end of the spectrum, whereas the average quant or options trader may well have a numerate degree.

And of course, not everyone you see on the telly on a trading floor is a trader, or on a trader's money.

[pcb1962]

yes yet: "The taxpayer is sitting on a profit of close to =A310bn on its stakes in Royal Bank of Scotland and Lloyds Banking Group after a surprise surge in their share prices."

[Huge]

Umm, no. Government borrowing was a Ponzi scheme predicated on the economy continuing to grow. The lenders were happy to lend because they thought they would get their money back. The Government was happy to borrow because they thought a continuously expanding economy would mean they could always repay. Gordon was happy to lie about all of this because he's a gobshite.

In reality it was obvious that the bubble would burst at some point, but no-one was motivated to do anything about it.

[Allthumbs]

no, not yet. Paper share price increases do not fund current account deficits.

[Allthumbs]

I should add (as you seem to want to see it in party terms) the roots of the banking crash lie not in housing programmes but in the Republican/Thatcherite belief that "the market is always right" and de regulation.

[Huge]

Also bear in mind that the Treasury will inevitably f*ck up the sale of the shares and end up losing money.

[Allthumbs]

lovely analysis, "gobshite" didnt come up in the FT that I noticed, they think Brown far more financially capable than Cameron* or whoever the other one is. That governments fund programmes from growth is neither unique to Brown or a surprise. But it matters not, its a TV beauty contest now.

*interested only in power for powers sake" according to them - not what I expected from the Financial Times.

[Bruce]

Remember the sale of our gold reserves? Gordon Brown couldn't have times that better, could he?

He sold in a falling market and obtained the lowest possible price.

[Huge]

I can only think that you imagined that. Just because I only mentioned Clinton, who repealed the Glass-Stegal Act and forced Fannie-Mae & Freddie-Mac to lend to unsuitable borrowers doesn't mean I don't think they're all toerags, no matter which party they're in.

Nonsense. What we have today only bears a faint and distant relationship with a free market. In a real free market the banks would have been allowed to collapse, their owners (the shareholders) would have pursued the bankers for recompense and the State would have stood by and made sure it happened.

What we actually got was privatisation of profit and socialisation of loss. The worst of both worlds.

[Allthumbs]

Indeed, society had to step in when the loosely regulated market failed.

[Huge]

I'm sorry but the fundamental concepts you appear to be espousing make absolutely no sense. I fear there is little point in continuing.

Have a good weekend.

[js.b1]

The number of true graduate places in the UK is about 25,000/yr. Of those about 30% will be shed year 1, a further 20% year 2. Graduates were recruited from universities purely because they were ONCE the top

5% of society, that was the structure of graduate training & investment BECAUSE they were the next senior management re ability. They wanted the top 5% in a broad section of abilities.

Post 1986 saw a collapse in educational standards in O & A-Level, particularly the 1990-1991 transition as a "means to hide unemployment" to quote IBM. IBM recruited 0 in 1993, 0 in 1994 and 1 in 1995. BP to Mobil bankrupted all but 1 of the graduates they recruited in that time as "no good" and kicked out.

1993 94 95 - top engineering graduates did not apply to UK companies, those that did were told "to reduce their expectations". Young Engineer of the Year for 3 years all emigrated (USA USA Germany) and never returned.

The expectation amongst UK companies by 1995 was that the top graduates will emigrate since there was "no financial future for them in the UK". As Cambridge PPE put it, "the young will give up their lives for us, so why not their futures?" which pretty much became economic policy.

Other engineers do make the mistake of going to largely crap engineering firms in the UK, and are given the choice of a) Engineering or b) General Management which is an oxymoron. Others go to consultancies where they read scripts, but fortunately Arthur Andersen is gone now - but not its legacy. The basic problem is UK industry is obsessed with marketing, aiming to sell 1000 not 1,000,000 and most of all not selecting people early enough based on strengths AND allowing them to develop along those strengths as a "portfolio". Quite unlike Germany & Japan.

The personnel department rule for graduates is thus 1) you recruit them for something they have little aptitude for, pay them accordingly them let them transfer to their area of aptitude for the same pay or never let them 2) you do not recruit anyone who is a threat as it will merely reduce jobs and undermine the carefully crafted hierarchy 3) no- one is special such that they can achieve pricing power - this last point destroyed ICI to ICL pretty much, everyone must be substitutable

4) analyse the top management based on every psychometric test, then select people based on same, then wonder why it didn't work (BT IBM etc). Efficacy of psychometric testing is actually poor, but do not tell the Independent School ISIS that - it has been a wonderful boon for turning out people most like them who end up teaching in schools most like them rather badly.

Financial Services recruit then underemploy - the top computer science graduates end up writing junk Javascript, IT companies such as HPQ recruit "someone cheap" who "needs training to provide backend job stability in the company" and "not a threat to existing staff". Hence the disastrous "summer graduate wrote drivers for consumer IT products which never worked" throughout much of the 1990s. A lot of companies will not recruit people whose work is "threatening" because it displaces jobs, pointless because in the end the WHOLE department gets Outsourced, Rightsized or Dumped.

Recruitment agencies work on 2 principles, 1) delete everything the company "does not want to see" 2) price based on that remaining, 3) keep sufficient people on the books but with employment gaps so they can be kept cheap. I always recall a major London recruiter at a conference stating "the only reason to recruit graduates is to replace those you already have with those cheaper". Hence 2005 v 2000 v 1995 v

1990 graduates after 5yrs have lower earnings than their previous group. Inevitable, the average degree is a 2i which actually implies an IQ of 125 (1st is 140) but the numbers have exploded. When challenged the Vested Interest Body known as universities simply state "if they are not given 1sts they will not get a job". When challenged about graduate earnings they simply "well that is the salary they would be earning eventually". It has become a hilarious work of fiction.

Hence 1 in 2 graduate jobs go to non British graduates - so the number of graduate jobs is actually no better, and most probably worse than in 1990. Realise Universities define a graduate job as that which a large number of graduates are doing... which is a bit like Alan Greenspan reclassifying USA Burger Flipping from Service to Manufacturing.

The problem with IB is it really requires multiple qualifications AND business ability, the person would be equally good as a lawyer, an accountant, an actuary, a tax consultant AND a business. You may find all the former in a single person but a good business person is actually hard to find and very often they are not via the graduate route.

So overall the top graduates no longer even GO to British universities despite what many may think, never mind not apply to British companies. In 1995 major companies across several UK universities had desperate telephone calls from companies stating the following "we have not had applications from the section of people we should have, the numbers are too low". They went into panic when they found some had emigrated before collecting their degrees, Logica offered 12-16k (and still offers about 16k now some 15yrs later) and can not retain people unsurprisingly. It is joked the whole output of Lotus Elise went to "once graduate companies" as they drove away at top speed to brighter shores.

What engineer is going to work for 12-14k, rising to 28k after 10yrs (North) or 32k after 10yrs (South) with 32k in debt plus probably another 10k for a decent masters to even GET an interview whereupon they are told "we do not like your degree/this university/your school" (the standard line) when police sargeants get 35k & refuse collectors seem to get some ungodly amount? Many graduate recruiters in revenge at the quality of graduates deliberately hold them off the graduate scheme for 8am-8pm six days a week, once that feeds back they amusingly "demand" graduates apply to them yet "can not seem to find the people they should have". On the contrary when you offer peanuts you get monkeys. Who is going to touch engineering firms when financial services offer far better? The "graduate pay soon rises" vanished in 1990 and only returned for a very few who in the end simply escalate to the international jetstream kicking off a ball n chain tax, living cost & property cost culture.

Engineering degree + GOOD Management degree =3D 100k in India. No point in staying. Japan is rumoured to be starting the biggest societal change in history - selecting people globally at "ground zeo" and creating a portfolio of them within Japan. In return it's jobs for life will give parks, hard work, sky high pay and the best people to work with. Treat people like human garbage and they just walk. The best EE & MBA from Imp runs a hire shop, the best EE from QMC owns 3 restaurants. If you want to do engineering do Mech E, but realise Honda will not take the top people "as we have nothing to offer", they went into IT, then Cisco, then India, now "bounce around S.E.Asia for 5 times what the UK would pay them even in the M4 corridor".

The UK created the biggest miss-allocation of cost in history by expanding the universities, it was merely a means to engineer people into debt for life and hide unemployment (which it is very good at). The 400k "return" on a degree collapsed to 150k overnight and is actually zero or negative for many occupations. Marketing manager 21k, admin 13k, public sector 18k with security. Sadly we have turned our public sector into an "expectation" with the result that UK society is effectively Greek in that We Should Have. Sadly many are about to find out we can not afford it. Private sector pension levels, plus loss of widow's pensions are transferring vast future liability back to the state. Graduates retire at 70 is actually not a joke, the figures do not add up.

If BIS re 2040 deficit is 300% of GDP, we will need more than the IMF, we will need an oil well the size of Ireland to pay for it. Falklands thus far does not seem likely to be that big.

The big stink to next hit the UK will be insider trading which is rife from business, civil service, politicians to financial services. It is out of control with front running really quite ridiculous - if you think politicians stunk over expenses, you should see their financial front running. Obama has finally woken up to most of the crooked systems being derived from The City, unfortunately the UK is still the counerparty to vast sovereign debt exposure along with France.

In 1990 from Imperial to QMC it was stated openly by lecturers that everyone in this room should expect to emigrate. Flat out, blunt, they were told they were wasting their time. What is not so well known is that many OTHER universities acted as "recruitment consultants" for companies to "get people cheap". Private schools would strip CVs, trust status so can not be sued and keep databases likewise. Universities would award marks based on whether X had a job and Y should do research - if they wanted you for research you were given a

2i but poor refs re company contacts so not picked up, when you refused research you were told about the marking move. If one person already had a job they were given a 2ii despite higher marks than another person who had not who was given a 2i. If a Director parent leant on the department they could publish a letter in a journal editorial section claiming they came top on the course when in reality they were bottom of the top third. The slave trade is not dead, it's just a case of more financially engineered.

Anyone choosing a degree today, ask yourself a) what do you do with that b) how do you pay for that c) which country do you go to with that. Southampton Engineering shovelled the bulk of their engineers into the financial services or foreign engineering jobs (M.E.) with engineering firms simply ignored on campus offering "min wage plus

10p". 150,000 graduates emigrate a year excluding dental assistants and similar "light/sub degree", unfortunately it is not the worst ones :-)

Dumbing down of degrees has been barely masked. Psychiatrist once required very little - but with degree quality dilution so it required ever more academic qualifications and debt to get the exact same job. Nursing must now be a degree. Paxman could barely contain himself on several occasions from surfing to second hand car dealing, the securitisation of toilet paper credentialism. This is a global problem, but it is missing the point. The top 10% of UK is 6M people, the top 10% of Asia is 600M people - that stuffing more into dumber university courses is going to solve this is non- sequitor, it merely hides unemployment and pacifies a nation via covering them in debt and letting them grow through it. You have to treat human capital as a portfolio and grow it, not shit all over it and hope it grows through.

Arthur Andersen for one had conferences in 1993 "how to get a 1st for =A33 an hour", companies actually only picked people up if they were going to a competitor - otherwise they would let them rot for a few years then pick them up cheap. The university "keeping tabs" on a portfolio of people it could trade for "consultancy fees". The system is rotten and for the most part always has been, the boast of academics became "whatever happens to you people, we still get paid".

Bank of England is busy researching why they young aren't exploding at the dismal financial future, the reason I'm afraid is because they know the State in the end gets the bill. About 5M on IB and similar is the growing toll of the mess we are in. Sadly no political party has the answer, it requires a culture change and educational system shred & rebuild. Unfortunately market forces vs "human capital portfolio" do not work too well, so we thankfully build plenty of airports. Last one out turn off the light.

A lot of IB have jumped out of the UK, any financial services is a risky job - it is "high-pay one day or 20k the next" since the qualifications and experiences are rarely accepted by personnel depts outside the City. So that reinforces the quick-buck mentality which merely accelerates the property desperation and so in turn fuelling it. A reinforcing systems loop that Peter Senge would perhaps not be too proud of.

Still, all socialist roads lead to inflation, whether or not the garbage graduates of ONS can add up. Sov Debt holders hate inflation, and therein lies the problem for USA UK - perhaps the Princeton Banking & Economist crowd are still fighting "preventing Japan deflation happening here". Housing gets very expensive to hold up when you are driving economic generations out of the country.

[stuart noble]

And after discord we have confusion, bureaucracy, and chaos. Seems like a gloomy calendar to me. Have I missed something, or everything?

[Bruce]

Thatcher at least knew that when the City was liberalised and hugely expanded following the 1980s "Big Bang", what was needed was firm and effective regulation. That was put in place and stayed during the whole time the Tories were in power.

However, when Blair and Brown were having their prawn sandwich lunches with city types in the run-up to the 1997 election, Brown was persuaded by the city types' relentless lobbing that the regulation was too strict. It was forcibly suggested to Brown that, if he wanted their support, he would have to give them what they wanted.

So, not wanting to fall out with the largest single sector of the economy, which would eventually provide New Labour with a whopping 25% of its total tax revenue, Brown dutifully gave the w/bankers what they wanted. The strict regulation by the Bank of England came to an end and was replaced by "light touch" regulation by the toothless Financial Services Authority, starting in 2001.

Of course "light touch" mostly meant "no touch at all" and the w/bankers could proceed unhindered with their ever riskier investments using depositors' money. And the risky decisions that they made, unencumbered by any effective oversight, led directly to the banks' demise.

If you don't believe me, please refer to a recent speech during this current election campaign when a prominent Labour figure admitted that removing effective regulation was a highly regrettable mistake.

The prominent Labour figure? The former Chancellor of the Exchequer and current Prime Minister, Gordon Brown.

[Huge]

You missed out the fifth season; "The Aftermath".

Given that it's the Discordian Calendar, is it any wonder it's gloomy? The impending General Election has put me in melancholy humour. Oh, that they could all lose.

[js.b1]

Indeed and likewise in America re Clinton & Bush. Clinton states "his unspoken regret" was w.r.t. regulation.

29 (Bloomberg) -- A one-word deletion in the 1,565- page Senate financial reform bill may help banks and inter- dealer brokers maintain how they trade swaps in the unregulated $605 trillion over- the-counter derivatives market. A =93trading facility,=94 as defined under the U.S. Commodity Exchange Act, prohibits phone transactions, which is how swaps have been traded for three decades. The banks that dominate the market profit by relying on telephone-based trading because it=92s less transparent than electronic-trading systems, said Darrell Duffie, a finance professor at Stanford University in California.

Moves swaps back to "pre big bang" makes them more covert from market players compared to seeing a market makers book as with online trading.

The financial services are lobbying very very hard and with a very effective "big stick" of "you don't want the bank bailout debt hanging around too long" they are likely to get what they want yet again.

[Allthumbs]

sorry, thats not my level of debate.