Learning to accept truths

A year in which I aged a decade

2009-09-11T12:43:00.000-07:00

1 year on - I have been asked to do a special anniversary article :)

-----

So much for so little. It took me three long years to reach my goal - that of joining Lehman Brothers. In 2006 I quit my job and started my GMAT preparations. I worked my way into a premier business school, signed up for a tuition loan (that had way too many zeros), secured a summer internship with Lehman, and successfully converted that into a full time offer. In August 2008 when I joined Lehman’s Associate Program, I was thinking the script couldn’t have been better written. And yet, in less than 6 weeks, my best laid plans came crashing down.

For the first few days after September 15^th, there was only one thing on my mind – survival. I had joined the Associate program two weeks later than the scheduled start date. By the time HR completed the admin work my name could no longer be included in the August payroll. Don’t worry, they said, you will receive your August dues along with your September salary. I had no reason to doubt otherwise though Lehman CDS had touched a new 52 week high. After spending two years in business school, my savings was low and the little that was left went towards the deposit for my Central London flat lease. The day Lehman filed for bankruptcy; I contemplated filing my personal one.

Over the next two weeks, I felt like a deer caught in the headlights. My only consolation was that I wasn’t alone, and there were rumors that our salary payments were on their way. I religiously went to office everyday to eat lunch – even though Lehman hadn’t paid me salary, they had promptly transferred my monthly lunch allowance onto the cafeteria card. With more than £100 sitting on my card, I wasn’t planning to eat anywhere else!

I had joined as a Generalist Associate and hence was waiting to be placed. I knew which desk I wanted to join (and pre-bankruptcy, they were keen to have me as well), and I stayed in touch with them. Just when I thought things were about to look up, came the big blow. On Sep 26th, we, the last associate batch of Lehman, were the first ones to be booted out of the Bank Street building by PwC. Strangely enough, it was Friday evening and I was in the tube when PwC tried to reach me on the phone. I stepped out of the station and checked my voicemail- an unknown PwC employee had left a message stating that I was no longer employed by Lehman.

As a fresh MBA with no relevant experience, banking jobs were hard to come. Yet, I wasn’t willing to give up. I shoved my MBA ego, firmly believed in myself, and took a middle office job in another bulge bracket firm. I networked aggressively and was quite sure that I would eventually land well. Budget cuts came from nowhere and they were particularly vicious in the middle office. In less than three months I was shown the door again. The Lehman experience had left me with a thick skin. Being laid off the second time around felt like a stroll in the park.

I swore I wouldn’t touch banking again with even a barge pole. This was in February 2009 and the recession was officially there. I had little chance of finding another job, so I decided to help some friends in setting up their online auction business. I didn’t get paid (oh btw, Lehman did pay all my dues by mid October), but for once I felt happy and relieved. I enjoyed working in a start up and building something from scratch. It gave me an outlet to my creativity, and most importantly, kept my mind away from the mess outside.

In hindsight, the one good practice that I had was that I kept my contacts abreast of my whereabouts, and continued to seek out and meet new people. Just after Lehman came down, I got in touch with a serial entrepreneur who was keen to invest in renewable energy. We met a few times and got along very well. He was not sure about hiring me as a full time employee and for over three months we went back and forth.

When I was laid off the second time, I offered to work for him on a contract basis. My brief was to analyze the renewable energy sectors and markets for potential opportunities. I enjoyed the challenge, worked long hours and learnt a lot. We formed a great team and soon enough the entrepreneur founded a company that would invest in and build renewable energy projects. Today I head a team of two people in managing our investments in renewable energy projects. I say ‘our’ because I have a sizeable equity stake in this start up. I earn decent monty, have been thrust with responsibility that is beyond my years and I genuinely like the work I do.

Yesterday, I got back from a long road trip in rural Devon. I walked in the fields, met with potato and dairy farmers, and explained to them the benefits of renewable energy. These projects have a tangible impact on their lives (make money for us) and I am happy to be a messenger of such powerful change.

If Lehman had existed, I would have been happy trading equities. For I had dreamed about this career for so long that is hard to put hand on heart and say I don’t miss it at all. Luck and perseverance helped me in a big way to land on my feet. Now I am far more assured, experienced and well prepared for what the world has to throw at me. Maybe after all it wasn’t a case of “so much for so little”.

Scotty

2009-05-22T11:29:00.000-07:00

I am on the train from Aberdeen to Edinburgh, amazing scenery - lush green meadows to my right and the blue tranquil sea to my left. The last time I saw such greenery was when I traveled on the Heritage toy train in Ooty. When I traveled on trains in India, I always spent most of my time on the door step, feeling the wind blow against my face and waving at random village children (who always wave back!) Can't do any such thing on National Express. So, I am stuck on my seat quietly observing the scenery around.

I had bought a DVD at HMV before boarding, but surprise surprise, there is free wi-fi access on the train! Managed to catch up on necessary emails and follow Gilly's stunning innings on Cricinfo. I had missed all the matches in IPL 2008 except for the semi's and finals. Pretty much same story this year, might even miss the semis and finals this year. I hope to catch my home team - Chennai play the semi-final tomorrow in some pub in Edinburgh. Not counting on it though, don't think the Scots follow cricket as well as the English do. Fingers crossed.

I can get easily carried away, I have way too many things to write about (travels, IPL, work etc etc), have made some notes, need a quiet weekend to put them up.

Random incident that happened two days back -

Setting: Evening show, packed movie hall
Movie: Star Trek
Scene: More than half way into the movie - enter Simon Pegg as Montgomery Scott

His first words crack me up. I don't recollect if he said anything funny, but just the way he said it was enough to make me laugh. A fraction of a second later, I realize that I am the only one in the theater who is laughing. I freeze half way, but my laughter is loud enough. The spotlight is on me, and I felt like a Barca supporter about to be beaten up in a Chelsea Pub. My friend punches me on my shoulder and I can feel people around me giving me a cold stare.

I was watching the movie in Aberdeen, heart of Scotland, and the Scots obviously don't find their accent to be funny! I had to control my giggle through the rest of the movie. Scenes for which audiences in any other part of the world would have been laughing out aloud were greeted with a mere smirk. Don't think Star Trek's box office collections up here would break any records.

Pushing the limits

2009-03-01T16:04:00.000-08:00

wingsuit base jumping from Ali on Vimeo.

The closest (relatively speaking) I have come to doing anything this wild is sky diving. But since it was a tandem jump, I can't take any credit for landing safely. Hence the relative reference.

But I do remember the sky diving experience. I didn't quite realize what I had signed up for until my tandem-master started tying the harness around me. Until then I was happy and all excited, but when he started checking if the knots in the harness were tight, I could feel the knots in my stomach tighten. My tandem-master had a good sense of humor. While strapping me up, we exchanged some pleasantries in Spanish. Then he asked me if it was my first jump. I said yes, and he replied - 'Yo Tambien' (Mine as well). It took me a while to figure out if I was lost in translation or whether he was joking. Seeing how shocked I was, he had a good laugh.

We were about 6-7 of us, we got into a small rickety plane. I was the last tandem sky diver to get in and I sat closest to the pilot ie I would be the last person to jump off. The flight took off and I could see some nervous faces around me. The tandem masters were having a good time. Can't imagine how they do this for a living. Even if the chance of your parachute not opening is a 1 in 1000, they jump almost 30-40 times a day, and I will let you do the math! The flight reached close to 13000 feet and the pilot gave the go-ahead sign to the tandem masters.

The first one off the plane was T, I could hear him yell at the top of his lungs when he jumped off the door. He sounded like he was being dumped off the door rather than diving with another person strapped on to him. I couldn't find the courage to check that. One by one my friends and their tandem masters jumped off. Seconds ticked by, and it was finally my turn.

Just after we boarded the flight I was asked to sit on the lap of the tandem master and he strapped me on to himself. He then gave me a few last minute instructions, though I doubt if I got anything into my head at all. The only instruction I was repeatedly told not to forget was this - after about 40 seconds of free fall, the tandem master would tap you on your shoulder. This was to let you know that he would be opening the parachute and hence you were supposed to hold on to your harness tight. This would prepare us for the sudden jerk when the parachute opens up.

Back to the flight where I am strapped on to the tandem master. He says a quick prayer and shows a thumbs up to me. I say good to go, and he slides closer to the door. All this while, I am sitting on his lap and have no control on what is about to happen. I was preparing myself for this moment, but the sudden gush of wind when I come close to the door, pumps even more adrenalin into me, and now I am totally scared.

The scariest part of the jump is not the jump itself, but the few seconds before it. You are strapped on to the tandem master, your face facing the door and the wind. Before he jumps off, he would position himself right at the edge of the door. If he is at the edge, you are clearly not on the edge. Your feet and body dangles outside rather precariously. It is a weird posture, but you are required to lean in front and lift your legs up. Something like this..

I am worried if my weight will take him down as well, he assures me that he is holding on to the edge of the door. Yeah right! For those few seconds, your body is hanging out of the door, you are 13000 feet up in the air and about to fall and the worst part is you are not sure when you are going to start falling. I kept thinking its now, now, now, but it never happened. My tandem master was too busy adjusting his belt. Dammit.

Then, the moment arrives. You are flying through air, wind rushes at your face and I couldn't help but yelling out loud. First reactions - panic and fear. After about 10 seconds, you realize you can't really do anything about it and you might as well enjoy the experience. Of the 40 second free fall, I enjoyed the last 20-30 seconds. Now it doesn't seem like much, but when gravity is pulling you down with such mighty force, 20-30 seconds seemed like a long time. The tandem master was wearing an altitude watch. He kept looking at it like he was in a hurry to go somewhere :)

And then, he tapped on my shoulder to let me know that he would be opening the parachute now. I crossed my hands and held on to the harness tight. 5 seconds, 10 seconds, nothing happened. I was expecting a massive jerk to pull me back, but it looked like I was on course to crash back into earth. Weird. Then I hear the tandem master shouting at the top of his voice. He says - Ahh, parachute is not opening. Its stuck, its stuck!

Honestly I was too numb to react. Even if wanted to, I don't think I could have done anything. I was strapped on to him, my back to his front and I couldn't even turn around to look at him. It's not a situation where you analyze why the parachute didn't open and what you could do to make it open. You have to tug the green chord and hope and pray the parachute opens. Period.

Luckily for me, this was yet another of my tandem master's mean set of jokes. I clearly didn't get the joke. I was busy picking out the spot on Costa Brava where I was likely to crash. He laughed and then pulled open the parachute. The rest of the 3-5 minutes parachute flying was like a stroll in the park compared to the what I had been through the previous 40 seconds.

I was so thrilled when we landed that I immediately asked the tandem master what I should do to get my own licence to sky dive. The sky diving school was running a course and it involved 7-8 more jumps, no more tandem, you are all on your own. I hope to finish that before I turn 30 and if I do, wingsuit base jumping will be next on my to do list.

Madbid.com

2009-02-21T04:44:00.001-08:00

The last two weeks I have been helping an online start-up - www.madbid.com, a penny auction website that was started by two IESE MBA 2007 graduates and an ex-GS banker. The concept of penny auction is very sticky and interesting, and if you haven't already heard about it, I would encourage you to visit the website.

Let me practice my elevator pitch - MadBid is a unique and entertaining auction concept. As a user you buy bids (cost approx 1 GBP per bid) online and then place them on products that you like. The auction is timed, with every bid the price of the product goes up by 1p, and the timer is reset. If you are the last bidder before the timer ends, the product is all yours. The auction process is entirely automated and is safe and secure.

So how does MadBid make money? Lets say they put an ipod that costs 100 GBP online. The starting price is always 0. With every bid, MadBid makes 1GBP. So lets say, 50 unique users participate in the auction and the auction ends on the 300th bid. MadBid earns 300 GBP, and the user who placed the 300th bid takes home the ipod for only 3GBP. A great bargain for the user and great margins for MadBid.

The auction is in many ways similar to playing poker or say trading on stocks:

- You need to take the risks to earn the return - Users who buy more bids have the staying power. They wear out the competitors and win the product. Its like the chip leader on the poker table. You have to be very lucky to win a product with your first 5-10 bids.

- It pays to adopt a different strategy - You can fairly guess at what points during the day the traffic on the website will be high or which products are more likely to attract more bidders. Not following crowd always helps.

- You should know when to hold and when to fold - Cutting your losses is the key to trading on stocks. Same applies here, if you see that you are being carried away by a strong bidder, you can't let your emotions get in the way. You have to be aware of your exit points. You obviously don't want to spend 100 pounds on bids to secure an ipod worth the same price!

- Game theory - I followed a particular auction where there were 3 users who were bidding aggressively against each other. The auction started at 0p and the three users placed over 200 bids each time outbidding the other. Imagine what might be going through their heads - say User A has placed the last bid and there are only 10 seconds left for the auction to close. User B thinks User C is going to outbid A and he takes the chance and stays out. Now if User C thinks the same, then A will walk away with the product. Can B and C take this chance after bidding so far? Its fascinating, this auction concept will provide great insights into game theory and behavioral analysis. The nerd in me is already rubbing his hands in glee!

This business in inherently scalable and the key to its success lies in attracting a critical mass of users (as is the case with most online businesses). Right now, Madbid is playing catch up in this space, there is a well established player whose marketing spend is probably many times MadBid 's initial capital investment. MadBid has been offering higher value products and thereby positioning themselves differently from the incumbent. They have sold two Mini-Coopers online and this weekend their biggest campaign is live.

My last two weeks at MadBid's Global HQ (thats how the founders prefer to call it even though the business now runs out of a humble office ;)) has been a great learning experience. The office atmosphere is friendly and as you can imagine very start up like - no official emails, no meeting requests, we don't have even have proper chairs (we sit on gym balls ;)). All decisions are taken on the spot and the work environment is open and flexible. Passion and the drive to succeed makes 18 hour work day seem like a stroll in the park!

I am yet to decide on how my future goals fit with MadBid's aggressive plans for the future. But as things stand, I must say, it has been my pleasure working with you guys so far and I wish you the very best! As Juha says - It is totally maad ;)

Sitcoms

2009-02-21T03:02:00.001-08:00

I have never been a sitcom person because I usually avoid watching TV (other than for sports or movies). And from where I come sitcoms are an excuse to shove advertising down the throat of unsuspecting viewers. It is a form of mindless entertainment (I'm being generous here) that promises to reduce your IQ by 5 points for every half hour that you watch. Same set of actors play different roles in different sitcoms. So I have to correct myself - sitcoms do challenge the viewers - you have to get the context/story/sitcom right before you begin watching the episode. But even here the viewers are spoon fed - in true bollywood style, the credits run during the first 5-10 minutes (with ad breaks in between) all the actors (including the supporting and not so supporting ones) will sing and dance, scenes from past episodes will flash through and voila - you are all prepped to watch today's episode.

We have only one TV in my house and I can't remember the last time I had the remote in my hand between 8-10pm on a weekday. Both my Dad and Grandma are huge fans of prime time sitcoms. And invariably, dinner is served with a healthy dose of on screen family drama. I was away from home between Aug 2006 and Aug 2007, and I still remember that the same sitcom was playing on prime time and it took me less than 10 minutes to figure out what had happened in a year!

But in the last two years I have begun to appreciate Sitcoms. More than just appreciate, I have been so glued to some and that I became obsessed with them. Friends was my first sitcom, no obsession, no craving, I watched when I felt like. That was pretty easy. Then came LOST. My flatmate in Barcelona had first 2 seasons of LOST on DVD and I watched all the episodes in less than a month. It was crazy. I used to get up in the morning, start on an episode (I could never sleep without finishing an episode, so there was no carry forward from the earlier night) while I get ready for school, watch half an episode during lunch break, hurry back home to finish work/cases for the next day and then start a marathon all night session of LOST. This went on for a good month. It was the third term of the MBA and by then I had given up on the course, the incremental effort to learn wasn't worth the benefits, and alcohol couldn't help me either. There were some developments in my social life and LOST gave me a good excuse to avoid all human contact for a while! So much so that my flatmate used to hide the DVDs so that I would be more social and less creepy, but then I used to sneak in while he was asleep to raid his DVD collection. Looking back, I regret having wasted a good month of my MBA watching LOST!

Post Lehman, it was Two and Half Men. Paramount Comedy runs two back to back episodes everyday during the afternoon and once I even scheduled my interviews around the episode. I got so addicted that I rented the full season DVDs and watched them all between September and October.

My latest addiction - House MD. If I had watched House MD 12 years back, I swear I would have picked Medicine over Commerce. Dr Gregory House is my ideal leader. He is intelligent, professional and gifted with a great sense of humor. I would love to work for him and working with an eye candy like Ms Cameron is an added incentive :)House MD episodes are easy to follow, you don't need to know so much history to watch each episode, so you can pick up from anywhere. That is so unlike LOST, where even if you have diligently watched the whole 4 seasons, you can still completely lost with whats happening in Season 5! LOST in many ways beats House MD as the most addictive sitcom, but the later is more real and intellectual than the former.

House MD is a lot of medical mumbo-jumbo but its quite easy for even a layman (like me, an accountant!) to follow the story. The soundtrack is addictive and haunting. My only complaint - if everything that I see in the show is true, I am wondering how long I will stay alive. People seem to go in coma after eating harmless ice-creams! :) But here's the good news - next time I'm in the hospital, I will know whats wrong with me if the Doctors express anguish over my epithelial membrane. Thank you Dr House.

ps: While randomly browsing on YouTube, I found this Friends episode where Hugh Laurie (Dr Gregory House) plays a guest role. Now I have to find an sitcom where Mathew Fox, Jennifer Aniston and Hugh Laurie come together!

Vroomm..screechhh

2009-02-06T14:15:00.000-08:00

As quickly as I had slammed the foot on the (blogging) accelerator, I had to press the breaks as well. Road sign - Bumpy road ahead. Sincere apologies..Part II of my lovely story on PwC will have to wait. My life has become way to interesting for my own liking. Just when I was about to hold on to a lifeline thrown from shore this big wave has sucked me in. This time, lifeline won't do, I need a rapid action survival plan to get out of the mess I am in.

But my current situation is a blessing in disguise as well. Besides building character (when rather if I get out of this shit, MW has promised to include my name as a synonym for this word), helping me catch up on more episodes of Two and Half Men, House, OC, my current situation has given me the luxury of reading all the obscure books that I never wanted to read. My columns continue to get published, albeit less regularly.

On a separate note, if you haven't caught up on the old credit jokes here is the link. I have got my own joke, putting it down here, just so that no one claims credit for it.

Q: Who is a Banker?
A: Someone who has a better chance of getting laid-off than laid

For all the non-banker friends who read this blog, please check out the DABA girls. A bunch of us, London Lost boys are planning a fitting reply. So, I am kind of tied up with that as well. Watch this space.

Jim rogers - Take that

2009-02-02T02:43:00.000-08:00

Jim Rogers the legendary investor (who made tons of money along with George Soros by punting on the downfall of the pound in '92) recently claimed that the pound is set to fall even more. If you knew where the pound was and where it is now, the pound falling 'even more' is a good enough incentive for the Brits to swim through the icy English Channel, marry a Frenchie and claim the generous dole (unemployment benefits) handed out by Sarkozy while happily ogling at Carla Bruni. The pound almost touched parity with the Euro and if Obama keeps up the hype, maybe the day when 1USD = 1GBP is not far away.

Mr Rogers says that UK has nothing to sell and banks (apologies for the pun) entirely on the financial sector. He is absolutely right. There were rumors recently of the UK Govt planning to ask the IMF for a huge bailout package. But what he and the rest of the world failed to foresee was Her Majesty's sheer determination in unearthing Britain's lost glory. I just read that Britain has recently laid its claim on the sunken treasure of HMS Victory that was carrying 4tons of gold coins. Yay, now the USD parity has been successfully avoided for atleast another 3 months!

Gordon Brown reiterated his promise that 'He would do whatever it takes to save the UK economy'. If push comes to shove, Her Majesty's crown jewel, the Kohinoor, might find its way on ebay soon! Anything to save the pound.

Obama vows to reclaim bonuses

2009-01-29T17:18:00.000-08:00

For a banker, rock and a hard place just became a rock, hard place and harder place! The options aren't great:

1. You used to be the Master of the Universe, you got laid off, and now you are the area manager for Burger King

2. You are a mistress for your MD ie you still have your job (to quote my friend HC, its not who you know but who you bl*w that makes all the difference these days), you get a crappy bonus that doesn't keep your trophy wife or private school going kids happy. I won't even talk about mortgages, ski holidays et al

3. You are the mistress, you got paid some bonus, and somehow kept your wife and kids with you. But wait, Yes We Can Obama wants to take back your crappy bonus which by now, you have already spent at Walmart

Any banker working for an American firm and who earned a bonus this year should be praying that he gets fired next month. Whats worse getting a crappy bonus or having to pay it back with interest after you have spent it already?

Job hunts

2009-01-29T16:27:00.000-08:00

I was supposed to meet with the second year students when I was in BCN, but I fell ill. I instead passed this write up around.

---------

First off, I apologize for not turning up on that day. I was taken ill and was bed-ridden the whole day. Here are some of my insights on what awaits you post graduation, mistakes that I committed (saw other people commit) and what you could do to stay afloat in this market.

1. Reality bites

Most of the economies are taking a huge hit. UK has been severely impacted and Europe until now to a much lesser extent. If you had dreams of finding a job in London or NY, take a step back. There are way too many 'qualified, experienced' folks hunting for jobs in these markets. To differentiate yourself, try and look up jobs outside of these cities, if not countries! If you like a job, even if the location is not ideal, take it. Compromise is the new black.

2. Redefine your roles

The next year is all about operational de-leveraging. Most companies will be tightening belts and look to reduce costs in every possible way. So you have to position yourself as either:

- Someone who can dramatically improve topline (sales - think new region/demographics); or

- Someone who can add efficiencies to the current systems (operations/financial control)

In your interviews pitch specific to the role. Having a MBA, backpacking across the world, being a team person have long ceased to be selling points. Talk specifics on how you can contribute to the companies' bottom-line, make it easy for them to hire you.

3. Focus

If you are still looking for a job, don't submit an application for any job that remotely interests you. Headhunters are unable to handle the CV deluge in their inbox. All they need is one reason to shift-delete to your application. If you have short listed 10 jobs to apply for, prioritize and pick which 5 you would really like. Customize your CL, CV (very important!) and send a strong application. In this market, if an employer is looking for 10 different key requirements there is talent available in the market that can fulfill all 12! Be specific and make sure you check all the right boxes. Otherwise don't waste your time applying for jobs.

4. Pre and Post application follow up:

Before applying to a company, find out why they are hiring (replacement, new role, reallocation of roles). It will give you a better perspective on what they are looking for in a candidate.

If you have directly applied to a company, do some ground work. Go through the Alumni network to see who works in that company. Speak to them, ask them to put you in touch with the hiring manager (not HR). Speak to the hiring manager directly, he/she will have the final say and in most cases the power to over-rule others' opinion.

5. If you love them, tell them you love them, and tell them how you told them that you love them.

If you like a job, tell them that you would love to work in that position. Desperation can work wonders in this market. I would rather hire someone who is keen to work in my field over an indifferent yet talented person. This was the mistake that I made at Lehman. I joined as a Generalist Associate, went through the hiring process knowing exactly where I wanted to work. I knew I met with all the job requirements and that I was a natural fit in that team. But I didn't tell them how keen I was to join the desk. When things folded up, nobody knew of my interest and hence they didn't care enough to take me with them. That brings me to my next point -

6. Find a good boss:

A good boss, someone who can mentor and guide you during these rough times. You will be brand new and untested when you step into your job. The only person who can save your skin is your boss. If things go south, he/she can either take you with him/her or at least try and find you something to do. So start building a good rapport with your boss from Day 1.

7. Network, network, network

The most hated word, but a truly powerful tool if used well. Make sure at least one professor likes you very much (just in case you don't find a job, you at least have a back option in terms of writing cases/doing research for the professor etc). Keep a good credit history with the bank. You never know when you might need their help. For instance, I have requested for a deferral of my principal repayments. It gives you some leeway when things got really tough.

8. Stay in touch with your school friends:

90% of the interview calls I received were from companies where my classmates were working. They can put in a strong recommendation for you and that works more than anything else - strong resume/cover letter/credentials.

Most of all, believe in yourself and keep your chin up. Feel free to reach me, if you ever need anything.

-----

Given the recent developments on my job front, I would have to add, if you get a job, carry a seatbelt to office everyday!

What keeps me going

2009-01-29T03:57:00.001-08:00

Satyam - PwC and my little story

2009-01-26T15:46:00.000-08:00

Today morning when I read and saw pictures of the PwC partners being arrested, instead of feeling sorry for them, I actually felt happy. Well, for sure they are innocent until proven guilty, but I have already passed my guilty verdict. My bias stems from my personal yet very limited interactions with Mr G, the senior partner. This brings back some very good and the one and only bad memory (related in a very distant way to Mr G) from my days at PwC.

I started my career in PwC, joined the firm on the very day I turned 18 years (any earlier the firm would have got into trouble for hiring child labor!). PwC was the biggest audit firm in Chennai and it was my dream to be part of this organisation. Sadly, it took a lot of arm twisting and influence to get me into the firm. This despite the fact that I had a stunning academic record (those were the pre alcohol days when academics flowed through my blood) and checked all the right boxes. I still remember my interview with the Mr S, the junior most partner of the firm. I walked into his room and I couldn't see anything. Mr S, a chain smoker, used to smoke in his office. I desperately tried my best to not cough/choke while attempting to answer random questions on branch accounting! That was my first experience of a 'stress interview'. The interview comprised of long periods of time when Mr S simply smoked and stared at me. Luckily, I spent all my effort on just trying to breathe and stay alive. I didn't say anything too stupid, my academics were good, and the big boys had already told Mr S to recruit me.

I still remember my first day at work. I was super excited and couldn't hide my smile. And guess who I first met - two of the most beautiful women I have ever met in my life! No kidding (R&R, I doubt if either of you read my blog, but you top all the charts, too bad you are already/about to be married!!) Lucky me, they were my batchmates and the HR woman had called them to introduce me to the rest of the office staff. Since PwC, I have worked in many places, but some of my closest friends are still my batchmates from PwC, and I continue to be in touch with more than 90% of my batchmates even today. That is something I can't even say about my bschool classmates. It was an eclectic mix of fun loving, intelligent, like-minded and hard working people.

Just a few months before I joined PW had merged with Lovelock & Lewes. So we were the first batch to join the combined firm. We moved into a swanky (by 1999 standards) office in RK Salai and I truly looked forward to going to office daily, until that fateful day! It was 8pm in the evening, I had just come back from a client place and was wrapping up the day's work, when a manager called me from the other side of the floor. Mr M - a very friendly, funny and down to earth Senior Manager who knew nothing about Audit! He was in charge of the biggest audit PwC had landed that year - Ford. He was looking to staff first year interns on the job and since I had done some photocopying for him before, he I got drafted into the team. In all honesty, that was the beginning of the end for me.

For the next year and a half my schedule was CRAZY. Wake up at 5am, run to catch the Ford staff bus that used to stop at the end of my road at 6.05am (and if i missed it, I used to take my bike and catch up with the bus at the oustkirts of the city!), reach factory around 7.15, eat lousy breakfast, and start work around 7.45am! Ford had just set up their huge factory outside of Chennai (earlier the city used to take pride in being known as the Detroit of India, not anymore I would guess :)). Systems were hardly in place, the new employees didn't know much about Ford's inhouse accouting software. Suffice to say that even for a newbie like me, there was enough work to keep me busy till 5pm.

We (the audit team was 10-15 members strong) caught the bus, napped on the way back, reached Ford's city office for an evening debriefing session. This would usually last till 8pm, when Mr M's wife would call enquiring about him. Our standard reply, even if he was right next to us, would be to let her know that he had left half hour back! Those were the days when cell phones were far and few and you could get away by lying.

I used to finish work around 9pm, return home with just enough energy to remove my shoes and hit the bed. And this lasted a full 6 months before I was assigned to a different client for a brief period of a month or so, and then I was back to the grind at Ford.

I relished the challenge, was shouldering enormous responsibilities for my level and I was happy to work those long hours. But things turned from good to worse very quickly when the engagement partner Mr RR (now the India head of PwC) came for reviews. Now, it is not very uncommon for partners to not know the interns during the entire three years you spent at the firm. This was especially true of Mr RR because he was a very reserved and quiet person. But, surprisingly, he actually knew me. There is a small story behind this. Mr RR used to live very close to my house. So in the morning when I used to run out of my house chasing the Ford bus, Mr RR would be taking his two dogs for a morning walk. And once, when I was running to catch the bus one of his dogs suddenly got excited and started chasing me! Between me catching the bus and the dog biting me - you can guess which happened first. Ok, im exaggerating, the dog didnt bite, but it kind of pinned me down. Not that I was brave enough to overcome it, but it was my big boss' dog as well. So I stayed put and waited for him to catch up (which took almost 10 minutes coz Mr RR is a hefty fella) and thats how I got introduced to the Partner of the firm.

Mr RR, for all his lack of social skills was an influential man. He had the right connections, was clever at politics and hence made his way up in the firm very quickly. Sadly, he also didn't know squat about accounting! Imagine, an engagement manager and partner not knowing much about the financial statements they were about to sign off. With Ford being such an important client, Mr RR brought a huge team of senior directors from Bangalore and Hyderabad offices to review our work. One of the reviewers was Mr G.

In all of my professional career, I have cried in office only once and that was during one such review with Mr RR & his team of reviewers. I was a second year intern, and because I had spent my first year at Ford, I was given independent charge of verifying the fixed asset line in the balance sheet. For the ones challenged in accounting, let me elaborate - that was the year in which Ford had poured millions of dollars in setting up the plant. They had barely started production and all that you had on the balance sheet were Fixed assets, cash and equity! And yours truly was supposed to give confidence to the ever suspicious Mr RR that all was hunky dory. In normal circumstances this would have been difficult, but the fact that Ford's accounting system was barely in place made matters worse. Once during a physical inspection, we found metal ball bearings that were valued by the inventory system at 20 lacs ~ 5000 dollars per bearing - once we spotted this error, we spent atleast 30 man days physically inspecting every nut and bolt in the factory!

After all this effort, I couldn't place hand on my heart and say things were fine. I was naive and gave my honest opinion in front of the entire review team. Mr G, not sure what his wife had told him in the morning, ripped me apart in front of my team. The other reviewers not wanting to miss the fun chipped in as well. After having worked so hard, I couldn't take the fact that they were blaming me for this. I started crying, in office, in front of 20 people in the conference room. That has to date been the lowest point of my professional career.

Now, I am not saying Mr G deserves this because he made me cry. Part II is when the plot thickens but right now my back and fingers ache. I didn't think this would take so long, I wasted too much time with the subplot, but it was necessary to build the story to thusfar. Anyways, around this weekend, I will put up Part II

Screw up and other stuff

2009-01-11T11:16:00.000-08:00

Two weeks back, I sat down to blog. The curious child that I am, I couldn't resist tampering with the settings. The one that caught my attention was the language option - blogger said I could blog in Tamil (my mother tongue). I was stunned! I immediately switched it on and lo - everything, EVERYTHING changed to Tamil.

Now, you might wonder whats the screw up in that. Well, though I studied Tamil at school and can speak the language fluently, i haven't been reading or writing in my mother tongue for the last 3 years. And in the days I used to study the language words like blogs, settings, edit html didn't exist in Tamil! So when the whole website instructions came up in Tamil, I felt like an ant fallen in a spoonful of honey. I wanted it but didn't like the way I got myself into it.

Anyways, so after spending a few hours struggling through the maze of alien words in a familiar language, I finally dis enabled the option. But to my horror, whenever I type anything the words gets automatically published in Tamil. Instead of fixing the problem, I spent another few hours trying to understand how this uber cool software works (I might be giving myself away, yet, for those who haven't tried it, the software doesnt translate - ie find the meaning of the english word and translate it into the local language, but it goes by the phonetics of the word you type!). At the end of all this, I gave up and shut my blog till I found more enthu/energy to start blogging again.

That happened today when this friend of mine dropped me a line saying, hey saw your blog, it was cool. Thanks for reminding me, I almost forgot that I used to blog. To my credit, as a true believer in free markets, I don't have the right incentives to blog anymore. My articles dont get published and I am not getting paid anymore, so I am less inclined to put in the effort.

Not that anybody is missing the gibberish, but sorry to say, I won't be blogging as often as I would like, until they find a cool software that automatically converts thoughts to words. If that happens, I will be back for sure.

Christmas gifts

2008-12-21T16:41:00.000-08:00

I finally see the distinct advantages of being born in a hindu family - one, christmas is a day off, nothing more and two, this is now meaningless, yet I shall state the obvious, you don't go crazy wracking up your brain on what gifts to get for family/friends.

This Christmas however, I had signed up for Secret Santa at office and with a bunch of friends. Office was very simple. I was new, didn't know anybody, so I had a good excuse to not bother about what the other person would have liked. With friends, it has become a touch tricky. While it is true that I don't know the person for whom I am supposed to buy this gift, the group is quite small, so by the end of our x-mas lunch, we all would know who bought which gift. So it can get quite embarrassing if I were to go ahead with one of my original gift plans -

1. Buy lotto tickets
2. Buy oyster card and top it up for the gift value
3. Buy DVDs of movies that I would like to watch, see the movies and then gift wrap it.

My evil brain has many more such ideas, but I have been warned not to try any of these. So today and tomorrow I shall do my bit to pick a thoughtful gift. Most likely, I will give cash!

Christmasy article

2008-12-21T08:55:00.000-08:00

After reading my depressing articles week after week, the editor put her foot down and told me last week, that I have to write a 'Christmasy' article. Something that spreads cheer and hope amongst the readers instead of urging them to jump from the top of big ben.

I spent a few days thinking about what I could possibly write about. When I ran out of ideas, I gave up and told her I couldn't do it. Her first suggestion was this - Why don't you compare your life as it was last year and write about how it is this year. Huh, it took me less than 30 seconds to convince her as to what bad idea this was.

Same time last year, I was eagerly expecting my sign on bonus to hit my bank account and had dreamt of many million way to spend that money (not in my wildest dreams did I even think of splurging this money at Las Vegas, and by some turn of events, even that happened!). I still had a good term of business school left and I was riding a strong wave confident that it won't wipe me out. Compared to that this year, I hit rock bottom. The breaking wave pushed me down and the deep under water currents have pinned me down. I only have a mouthful of air left in me.

After to and fro emails, she finally gave up as well. She said said, try and give a positive spin on whatever dreadful thing you have to say. So here is Doctor Spin's latest article

Silver lining

Experience is what you get when you did not get what you wanted – How true! I came to London as a young, ambitious MBA graduate keen to make his mark in banking. Unknowingly, a culmination of past events had placed me in the eye of the perfect storm. And boy was I caught unaware! Battered and bruised, denial and anger happened in quick succession, but acceptance took a while. But I am now stronger, wiser, and far more open to face reality. Here are some of my key take aways from this crisis:

Why me? - The answer to this question tested my reserves of self-belief and confidence. Though all the first year associates were initially laid off by Lehman, the ones who were pre-placed or slotted to join Equities found their way back to Nomura. The handful of generalist associates (like me) who preferred roles in Fixed Income over Equities were the worst affected. Realization that events beyond us influence our destiny helped me to accept the change instead of fighting it.

Humility – I started working full time when I was 18 years old. Hence I wasn’t naïve enough to believe that I could change the world as a MBA graduate. But I must admit, I stepped out of business school with some lofty aspirations. Working in middle office was certainly not one of them! I had to eat my pride, pull up my socks and believe that my time would come. False beliefs or otherwise, putting food on the table gained priority over my tall aspirations.

Control the means not the end – In those early weeks, I pursued every job posting as if it was my last opportunity. Desperation ran high with each passing day of being unemployed. I cold called headhunters, networked aggressively and gave every chance everything that I had. “Thank you, you are good, but not good enough” emails flooded my inbox, final round interview failures seemed like a norm. Clearly, I had set myself up for disappointment. I learnt from this and distanced myself from the job applications. I became impassionate and more professional and therefore was able handle rejections better.

Live the moment – Without doubt the past few months have been the worst period of my adult life. Yet, the dark clouds came with a silver lining. I had the time and the company of my friends (some ex-lehman) to visit museums, travel around Europe and pursue common interests. Learning to separate the present from the expectations of future took a huge burden off my shoulder. I found my sweet spot – I was able to move on and enjoy life instead of postponing living.

Finally, for many of us, this crisis has significantly lowered the opportunity cost of pursuing our calling. There are enough reasons why we should embrace the challenges forced upon us. For me, this crisis has taught me valuable life lessons which otherwise I would have learnt over a few decades.

While I am happy to bid good riddance to 2008, I am not sure 2009 would be any better, atleast not for the bankers. As for me, I hope to move from middle office to front office sometime early Q2’ 09. If that doesn’t work, I might go back to my home country and start something on my own. 12 months back, I wouldn’t have even dreamt of starting something on my own, but now this crisis has lowered the opportunity cost and given me the strength to pursue my calling.

I take this opportunity to wish you and your family merry Christmas and a very happy new year.

ps: If this did not bring happiness, cheer or hope to your sorry life, don't be harsh on yourself.

Recession everywhere

2008-12-21T08:54:00.000-08:00

The editor of the website emailed me last week -

"Bala,

Somewhat predictably, our budget next year is being cut considerably. As of January, therefore, we'd like you to write only one column per month. I hope this doesn't come as too much of a shock - it's a shame as your columns are very popular, but we need to give space to the other columnists too.

Is this ok with you?

Regards
xxx"

After what I have been through in the last four months, I don't think anything could shock me anymore. Though I am quite sad that I won't be writing as often. Also this strips me of close to 15-20% of my income. More importantly, I had earmarked this income for my discretionary spend ie socialising. Now that would have to take a back seat :(

But I wonder if this is her way of saying, look your columns suck, and I don't want to waste anymore money on you. You can be assured that I will be watching the website like a hawk to see if the other columnist have also been downsized or whether its just me :)

Feeling too lazy to write..

2008-12-18T06:12:00.000-08:00

Not to mention that I am in office!

Black hole

2008-12-17T11:12:00.000-08:00

Staying power

2008-12-14T12:16:00.000-08:00

At about the same time when I got my current job – a contract position in middle office, I was having a last round interview with a FMCG company for a full time position in their finance department. I took a gamble, dropped out of the interview process and opted for the middle office position. My reasons - one, I wanted to stay in capital markets and the temp job helped me keep my foot in the door. And two, the job buys me time, pays for my heating, and yet its incentives were not high enough to make me complacent. Everyday when I walk into the office and walk past the trading floor, I am reminded that my current job is only a means to an end. It keeps the fire burning within me.

But in the last three weeks my goal seems even more distant than ever. More and more people are losing jobs everyday, companies have put recruitment on hold, and personally, I am finding it very hard to find time for job hunting. As much as I am only a contract employee, I won’t call headhunters from office or apply for jobs sitting in my desk. By the time I finish work, most head hunters have already shut shop. Even though I spend a good portion of my weekend applying for jobs and networking, it isn’t the same as finding time to meet with recruiters or contacts over the week. While it is easy to blame my poor success rate on the market condition, deep inside, doubts have crept in. I now wonder if I had not taken a job, whether I could have put in the time and effort to find what I really want. The debate between the ‘little in hand’ vs. ‘a great deal to come’ rages on in my head

Adding fuel to my doubts - last week my friend got a job in a real estate private equity firm. While I was very happy for him, his success opened up a host of questions in my mind. My friend and I have very similar backgrounds - fresh MBA graduates and recently laid-off from banks. Unlike me, he didn’t want to settle for anything second best, he pushed himself, was very proactive and found his way through. What does it take to stay ‘laid off and looking’ until you find the right job?

An honest introspection gave me the answer. I simply didn’t have the staying power. I had spent my sign on bonus traveling the world instead of diligently repaying my education loan. A yearly rental contract for my apartment in Central London and my own bullish future cash flow projections didn’t help my situation. Not to mention the generous redundancy package that I received from my bankrupt firm – zilch, nada, a grand sum of zero! I needed the cash to stay in the game. I took, what at that time, seemed like a path that would lead me to my goal.

This week's articles..

2008-12-07T16:14:00.000-08:00

Its 12.16GMT and I have just finished writing the articles for this week. Social activities (a broad term that covers sleep, TV and hang-over recovery) ate into my weekend completely. I am sure my blood has more rum+mulled wine (the roller coaster ride mixed them well just in case the rum was floating on top of the wine!) than oxygen. I usually wake up with a sinus induced headache, but now i'm going to sleep with a one day old hangover headache. Not good!

I have been in touch with many of the first year and second year students at the top business schools. While the word on the street is that this is the best year to be in business school, the students in school aren’t exactly jumping in joy.

Take the case of first year students. The summer recruitment season started two months back and so far they have been in the thick of presentations and networking sessions hosted by banks and consulting companies. The usual pitch has been that summer internship positions will not be affected by the downturn because interns will eventually join only two years from now. But the truth has been far from it.

The traditional early recruiters on campuses are the banks and the consulting companies. This is for two reasons. Firstly, most industry recruiters don’t have a structured recruitment program, and secondly, it is in the interest of the business school to push students towards consulting or banking jobs. Higher salaries lead to higher rankings et al.

This year, as was expected, there was a huge jump in applications for consulting opportunities. Even consulting firms are going through belt tightening efforts and hence they have been very selective in picking candidates for interviews. Both these factors have contributed to the lowest interview calls to applications ratio. As for banking, the list of survivors is less than a handful and all of them are still in pain. Job cuts have been severe and the ones still left with a job live in a state of perennial uncertainty. Summer associate recruitment is not a business priority any more. The only good news that the first year students have heard in recent weeks - Nomura (legacy Lehman), despite having missed the recruitment season, is now back on campuses offering summer associate positions.

The other noticeable trend is that banks have found alternate talent pools to fill niche positions. In my associate class at Lehman, there were almost as many PhDs and Chartered Accountants as MBAs. Analyst/PhDs are preferred for trading positions, PhDs for structuring, and recently Chartered Accountants have given MBAs a run for their money by taking up research roles. The only safe heaven – Sales positions in Capital Markets and IBD, where MBAs are still sought after for their relationship building skills. With lower summer offers on campus, and prospects of limited or no full time hiring, most of the first year students have had to boot their dreams of finding a banking job.

Spare a thought for the second year students. Usually upwards of 60% of the class find their job in the last few months prior to graduation. Industry full time hiring is fairly last minute and hence recruitment picks up steam only then. However this year, with main-street announcing record lay-offs, recruitment is very slow if not dead. At this rate business school student loans might trounce Phoenix residential mortgage loans for the worst performing loans category!

The business of business schools

2008-12-07T16:13:00.001-08:00

Is education the solution or the problem? On one hand, education and skill enhancement is being talked about as the long-term solution to the present crisis. The laid-off-and-looking are encouraged to fine tune their skill sets. Bankers are learning about ways to fit into other professions. On the other hand, the rising costs of education have made it unaffordable for most even before the current recession. Students, particularly from business schools, who graduate this year are now questioning the benefits of the time and money invested in their courses.

For business schools, the Advancement Management Programs and the Executive MBA programs are the cash cows. They barely break even on the regular MBA program. The regular MBA gives them the visibility and the means to attract top professors. I learnt this during my first week in business school when the program coordinator took us on a tour of the campus. The school had just built a brand new gleaming building equipped with the latest hi-tech classroom equipments. When one of my classmates eagerly asked the coordinator if we would be having classes in the new building, she cut him short by saying that we don’t pay enough to enjoy the new facilities, and that the new building was exclusively for the executive MBA programs. Imagine coughing up upwards of $100k for the MBA, and being told that you don’t pay enough!

Reacting to the $8bn plunge in the Harvard endowment fund, Drew Gilpin Faust, President of the university, wrote in a letter to deans - “We need to plan with a clear-eyed view of the reality that confronts us”. The reality is indeed very challenging for business schools –

With CEOs forfeiting salary and bonuses, the budgets for funding executive education programs would have been the first ones to be cut.
As I mentioned in my earlier article, banks are less keen on funding business school loans. Without loans, more students are unlikely to find means to fund the program.
The math doesn’t make sense any more. The banking bonuses used to inflate the average MBA salaries. Forget bonuses, banks used to hire between 20-30% of the class in top business schools. Now there will be lesser jobs and the payback will take longer.

We will see the business of running business schools change on many fronts –

Curriculum - The quantitative finance courses will be dropped in favor of strategy and general management courses, given that more students will be applying to consulting/industry than to banking.
Less expensive –Business schools will be forced to cut costs and charge less. Offering no frills MBA education - less contact, shorter duration, more industry specific courses, maybe the way forward.

Whatever maybe the solution, the time has come for business schools to go back to the classroom!

Me, the bailout candidate

2008-11-30T16:31:00.001-08:00

I spent the whole of last week working on my bailout application. No, not the one where I convert myself into a bank holding company, blame everyone but myself for the problems, and claim a piece of the trillion dollar bailout pie. My bailout application was simple – a plea to the bank to defer repayment of my education loan for another six months. Don’t ask me what gives me the confidence that things will be any better in six months! In my current life postponing the problem is as good as solving it.

But come to think of it, I am a perfect bailout candidate and I have enough people to blame. I lost my job because the US Government failed to bail out Lehman. I am heavily leveraged and I blame that on the banks. They readily offered unsecured debt at attractive terms to fund my business school expenses. And finally, when everything around me was falling (think GDP, S&P, unemployment, interest rates) the only thing that was going up was the Euribor. No prizes for guessing on what the interest rate on my loan was benchmarked on!

The top business schools around the world have (or rather, should I say had) a guaranteed loan program. This was designed to attract the best international talent. The loan did not require co-signors or lien against property. It was an unsecured loan based solely on your admission to the business school. In my school, the bank that was giving the loan insisted that all international students should take an insurance policy that covered them in case of any ‘unforeseen’ events. The exorbitant insurance cost (almost 10% of the tuition fee) was conveniently added to the loan. Given that I had limited funding options in my home country, my arms were tied. The only way I could get into the school was by taking the student loan and sucking up to the terms of the insurance policy.

The policy and the unsecured nature of the loan gave me the false confidence that I would be relatively safe even if the headwinds were rough. Little did I know! After being made redundant at Lehman, I wrote to the insurance company and asked them to cover my loan repayments until I find another job. Much to my surprise, they quoted a fine print in the policy which stated that I had to claim unemployment benefits in my country of work to claim insurance. However the UK unemployment benefit is applicable only for people who have worked for over 2 consecutive years in the country. I could feel the train wreck finally hitting me head on.

After negotiating with the bank for over 2 months, we have finally come to an agreement that I can defer principal repayments for the next 6 months. For now, my contract job helps me pay the bills. But if things do get worse, me and my friends from FIG might buy a bankrupt US bank (idea courtesy Aegon) and join the real bailout circus.

MBA – the biggest investment of your life

2008-11-30T16:30:00.001-08:00

Recently my business school requested me to participate in the World MBA fair held in London. I was representing my school as an alumnus and stood at the booth patiently answering questions from prospective students. I came away sensing an air of desperation – students seems to be in a mad rush to get an admit next year. The MBA will be the biggest investment decision of your life. So if you have a methodical approach to your other investments why follow the crowd when it comes to taking this decision?

Is it for you? – Understanding your risk profile is the first step to an investment decision. Similarly, ask yourself as to what do you want to do after the MBA? Unless the answer to this question is a career (think general management, consulting) or a personal goal (multi-disciplinary skill enhancement) that requires you to have this degree, you need to re-evaluate your options. Recession in the economy, fear of being made redundant, lower opportunity cost are not good enough reasons. The reason has to do with you, not an external factor.

Have a strategy - The common misconception is that the MBA gives you the time to think and find what you really what to do. If you don’t step into the program without having narrowed down your career options, you are unlikely to succeed. The recruitment blitz will catch you unaware and recruiters will go after the most focused candidates. To an extent, the two-year MBA would give you some luxury if you are completely lost. But you pay a hefty price as well.

Timing - Picking the right year to start the MBA program is like trying to call the bottom of this market. As we have recently seen, the economy can become a bottomless pit. Quit trying to time the market and instead look for the fundamental story (Is it for you?).

Most prospective students I met during the MBA fair were quick to point out what happened in 2001. Then the recovery was swift. Students who went into business school in 2001 and came out in 2003 were very well placed to ride the growth wave over the last 5 years. Whereas now nobody knows how long and deep the current recession would last. Do we have to be reminded that past performance is no guarantee of future results?

In my case, I went into business school during the two best years of economic growth. But it had some advantages. Banks and consulting firms spared no effort in courting us. There was enough supply of jobs and we, the graduates, were in demand. As against this, the downside to starting your MBA during recession is that competition for summer and full time jobs will be intense. Firms are unlikely to recruit until they see clear signs of recovery. If you are looking at a one year MBA program the risks are even higher. Unless your graduation time coincides with market recovery, you are likely to graduate unemployed and completely broke – not a pleasant thought.

Credit Crunch Special

2008-11-30T13:55:00.000-08:00

Dating ad on the London paper -

31 female, British white, 6"1, brown hair, brown eyes. Looking for male 35+, sincere, solvent and willing to commit.

Financial Crisis - Visual guide

2008-11-25T16:34:00.000-08:00

The picture didnt fit my blog..rather im too sleepy to figure out why it doesnt. See it here

Pirates sign pair of Million Dollar Arms

2008-11-25T16:07:00.000-08:00

Imagine if someone told you this was the headline of a news article, take a minute to guess what the article could be about. My guess - Somalian pirates might have bought a submarine and some other ammunition from mother Russia.

Not in my wildest dreams could it have crossed my mind that -

Pirates - refer to the Pittsburgh pirates team; and
Million dollar arms - was a reality tv show in India that was scouting for pitchers! Smart move, almost every boy in India can bowl with a cricket ball, so the chances of finding a good pitcher is quite high.

http://www.themilliondollararm.com/index.php? - Turn on the volume and hear the hip-hop soundtrack

Jacuzzi talk

2008-11-25T15:19:00.000-08:00

Waring: Arbit post - I'm testing my writing skills. Editor killed my article, the published one doesn't even look close to what I had submitted!

There were 4 people in the jacuzzi tub, first 5 minutes nobody spoke. I kept my eyes just above the bubbling water and imagined that was I was fighting tidal waves and trying to stay afloat. I think the chic sitting right opposite me saw my facial expression and got worried!

The other chic (not the one sitting opposite me) finally broke the silence - asked us what we all do. When people around you are losing jobs - not the smoothest ice breaker. Of course, I kept this thought to myself.

Much to my surprise (coz my apartment is filled with Shell employees) the tub was filled with finance folks, the guy was an accountant, the girl who broke the silence used to be an analyst at JPM, the other girl is finishing her MBA and looking to get into consulting/banking - she doesn't know. I tried convincing her that it was easier for her to drown in the jacuzzi tub than to get a banking job, don't think she took me seriously, until I told her that I was ex-lehman. Sudden wave of sympathy flooded their faces. I love those 5 secs of glory/shame when everyone looks at me as if I were a wounded puppy. I tried yelping to see if I could extend the sympathy, the chlorine filled jacuzzi water went into my nose/mouth and I ended up spitting it in all directions. Very awkward.

The JPM analyst apparently quit her job after just 5 weeks because she didn't like the lifestyle. She now runs her business (diplomatic way of saying, I help my father run his business) - selling accessories for women. Told us where to find her shop in Charing cross station. When the other girl asked her what kind stuff she sold - believe it or not, she was in her swim suit but was fully accessorized! She pointed to the bracelet, necklace, and ear rings that she was wearing and to the cashmere shawl that was hanging near the pool!She continued to tell us about how the bank refused credit and she is now rethinking her expansion plans. Damn the credit crisis!

After 20 long minutes in the jacuzzi, we said our customary greetings, and departed to the shower area. The accountant dude who was taking his shower in the next cabin, yelled out to me saying - next time, avoid her (the accessory woman). Apparently, this was the fourth time in just the last two weeks he has been stuck in the jacuzzi with her and all she could talk about was her accessory business. Once, he was with her alone, and he told her that he already knew her story, and yet she continued as if she had met him for the first time!

The last place any one could stress me out could be in the jacuzzi. Push comes to shove, I will carry a few bath tub toys and pretend to the save them when battling the tidal waves!

Writer's block

2008-11-23T05:04:00.000-08:00

The deadline for my weekly article is Sunday (today) and I just about finished writing. Last week, my editor told me that I can't spit out random stuff and that I would have to talk about more topical issues. Huh, I hate this pressure.

I usually make a mental note of things during the week and then spend an hour or so during the weekend typing out whatever comes to my mind! I don't have such luxuries any more. Work is taking up a good chunk of my free time (well, talk about priorities!) and the concentration of all social activities over the weekend leaves me with little time to write.

I struggled for 3 hours yesterday between 11pm and 2am to come up with something interesting. No luck. The Artic chill and the blizzard falling in London seems to have frozen my thoughts. It took another 4 hours of intense effort today morning to come up with this. There was no joy. Writing became a task and it was extremely painful. But I am sure, I will be happy when this article gets published later this week (if at all my editor approves it!) and happier when I receive the cheque! For now, I will dismiss this weekend as an exception. If this mental block continues, I would have to rethink this arrangement.

The Change We Need

What a week! The axe is falling everywhere. Today’s survivors have nothing to rejoice, after all they live in the fear of being tomorrow’s victims. The only good news that we receive are the e-shopping vouchers. When both Prada and GAP compete to give you their best deals – it’s a clear sign that this is an inclusive recession. Take strength, your ugly-rich neighbor is suffering as much as you are.

As for me, I have found a small cave to hide in and I am witnessing this massacre from my temporary shelter. And, if the mute CNBC TV screen above my office desk is to be believed, the worst is yet to come! The word in the street is that if you don't have friends who have already been fired, you are a sad human being.

This culling seems to be indiscriminate. One on hand senior people are being fired because they are too expensive while junior resources are shown the door because they won’t make any money anytime soon. Talk about burning the cigarette from both ends. At the height of the dotcom crisis, banks were blamed for cutting too much too soon (I remember how Lehman thumped their chest on campus for not having laid off anyone in 2001 – only, 7 years later they would make up for it by screwing everyone!) Are they repeating the same mistakes time and again?

No other industry has been through so many ups and downs. Banking will emerge from this crisis stronger and nimbler, but is that enough? Is survival the only goal or will we use this opportunity to set things right - once and forever. I can hear you say – “how naïve”, you maybe right, but I am not ashamed. I have not been corrupted by the greed or the excesses. I am a victim of the current crisis and my dreams have been tempered by reality. Right now, I am hanging by my fingernails. Maybe I will stand up, maybe I will fade away, but here is my two cents on what could change.

To analyze the situation, I have drawn a parallel between banking and consulting – two careers that share a lot in common. Like investment banks, consulting firms are extremely profitable, charge money for delivering intangible value (intellectual content) and pay their employees top money for working long hours.

Show me the money, but just don’t give it yet – Consultants are paid well, but never too much too early. MBAs flock to banking to make the quick bucks that will allow them to pay off their loans in no time. Similarly, analysts who join trading are lured by the prospects of making 6 figure bonuses in less than 4 years. For many, banking is a funding machine, not a career option.

Burn after banking – For every Dick who spends his entire career in banking, there are hundred others who quit unable or unwilling to take the pressure. Sure, the drop-out rate in consulting is high as well, but consultants atleast have the option of joining industry in a management role. The exit options for a CDS trader are pretty much limited.

The occupational risk encourages a higher risk appetite which results in volatile returns. Instead of money, offering longer career paths and stability will give the traders and bankers the confidence to play the course instead of shooting for a hole-in-one.

I could go on, but I will stop here and would like to hear your constructive suggestions on what you would like to change.

Compare and Contrast

2008-11-23T04:48:00.000-08:00

Sequoia Venture Capital saying - "Get real or go home" vs Citi's - "We are stronger than ever" message. Sorry, but of the two, who is on the brink of being rescued this weekend?

Sequoia Venture Capital Warning to CEOs - Get more Business Plans

citigroup investor presentation - Get more Free Tax Forms

Makes me wonder - why do banks refuse to acknowledge the obvious?

Retirement plan

2008-11-21T10:18:00.000-08:00

Un-effing-believable

2008-11-20T15:10:00.001-08:00

Here are the latest business school rankings and IESE is sitting ugly at 8th. The school does a shabby job at marketing themselves (they believe that buying ad spots on FT and Economist is marketing!) but finding IE in the 2nd spot is not something I can settle for.

I have friends in ESADE and have lots of respect for them and the school. But honestly, I haven't met a single person from IE who works in London or is recruited by the banks/consulting companies. Ok, I agree, finding a banking/consulting job or working in London is not the benchmark. But when none of the traditional big recruiters touch your students, how could you find yourself as the 2nd best international school in the world?

I presume the Harvards and the Booths (haha) will have similar nasty question to ask about IESE's No 1 ranking in the Economist publication (maybe marketing does help ;)). I was a sucker for rankings, my boss used to subscribe to the Economist and I saw IESE in their rankings and decided to apply, just as a back up option. Back up became only option (by then I had quit my job and would have taken admission in any school!). But I am very happy to graduated from IESE.

I accept, IESE doesn't deserve a numero uno spot, but 8th and behind IE in BW rankings, is definitely not acceptable.

BRICs

2008-11-20T14:46:00.000-08:00

Sad part is things aren't well at home either. I wrote this article 4 weeks back talking about how India and China will go through a rough patch - here is the latest evidence

Today I met my classmate-bankers for drinks & a group hug. I seemed to have found a small cave to hide in, not sure how long I can take shelter here. But I am witnessing a massacre from my little den. And the worst part is that the worst is yet to come. A couple of beers and wallbangers doesn't help either! Pessimism is the default mood.

The word in London - if you don't have friends who have been fired, you are a sad human being. I have way too many friends who have been or are on the verge of being fired. That does make me sad.

Oh well, tomorrow is another day

Noisy Chew

2008-11-16T15:46:00.000-08:00

I once met this girl (and no, she wasn't Chinese) for dinner when I was working at Citi. That was the first time we met, a common friend had introduced us and had conveniently blamed last minute work for not joining us. In less than 1 hour I had exhausted all possible conversation topics and without asking her, I signaled to the waiter to get the check. Now, just before we left the restaurant she said - Can I tell you something, its very personal and I hope you won't get angry? I gave her my usual weird look and said - go ahead (like you ever say, no don't say it!).

She said - "You chew loudly. I could hear you masticate (ok, she didn't say that but I learnt this word recently from child genius Jake Harper of "Two and half men" fame. I know I am digressing, but if after seeing this clip you are not convinced that this is the BEST sitcom ever, there must be something wrong with your eating habits, please masticate 20 times before you swallow).

Anyways, coming back to Noisy Chew (thats her screen name), I didn't know how to react to her 'compliment' and I said - Oh really, next time I will be more conscious. I never met her again and yet Noisy Chew's image flashes by every time I sit down to eat at a table. For almost 6 years now I have been suffering from this terrible complex until last week when Scott Adams helped me out. In his monthly newsletter - A little ray of bitter sunshine, he shares a similar experience.

Quote. Recently my wife told me I chew too loudly. While I don't deny the accusation, I wonder how it is possible for one person to chew more loudly than another, assuming both people have their mouths closed.

Do I have thinner cheeks than the average person? Do other people somehow close their nasal passages when they chew so the noise doesn't come out their nostrils?

I'm reasonably sure the carrot in my mouth doesn't know who is chewing it, so the originating sound is probably the same with me as with anyone else. There must be something freakishly wrong with my skull architecture, like one of those buildings where you can whisper in one corner and someone on the other end can hear it clearly.

There isn't a lot I can do about this problem. If you have ever tried to chew more quietly, you know it sounds exactly like not trying. I went from blissful ignorance about my chewing problem to the painful knowledge I have some sort of mastication disability that will make it impossible for anyone to love me.

So I officially added "You chew too loudly" to my list of things you should never tell another person unless you intend it as a practical joke. So far, the list isn't long. But it includes another one I heard as a teen, when I was most impressionable: "Is that the way you normally walk?" To this day, I only walk from one place to another if I am sure no one is paying attention. So obviously I don't chew anything when I walk, because that's a total disaster.

One of my favorite examples in the genre was a guy who said to a nervous groomsman just before a wedding ceremony "I heard that sometimes you can pass out from standing still for too long when you are anxious." That is pure evil, yet clever enough to be justified, in my opinion. Apparently the victim came close to actually passing out just from the suggestion. Try it at your next wedding and let me know how it turns out. Unquote.

I doubt if Noisy Chew was evil enough to play such mind games with me. But one thing is for sure - Noisy chew, I will never forget you!

Snooze you lose, schmooze you win

2008-11-16T08:31:00.000-08:00

Networking – the very mention of this word is enough to make people shudder. The first few months in business school taught us that having a stunning CV or a stint in Iraq wasn’t just good enough to get you shortlisted for banking interviews. We were taught the nuances of networking – start with an ice breaker (complaining about London weather - check), have an interesting story about yourself (self-depreciating humor – double check), and show enthusiasm even if you know you are going to hear a healthy dose of repetitive BS. And finally, even if the MD ends his presentation by saying ‘there is no such thing as a stupid question’, don’t bite it.

When I stepped into Lehman as a full time associate I thought I was done with networking. Little did I know that I had to endure another full month of schmoozing! As generalist associates we had to fight and find our way to a desk. Some desks were more popular than others and competition was intense. We worked on our elevator speeches, mingled with the recruiting desks over multiple cocktail sessions, mock-interviewed each other, and underwent a formal speed-dating session. I met more people at Lehman in the 2 hour speed dating session than I ever did over 10 weeks of my summer internship.

Without doubt, the recruitment season in business school and the one month of networking at Lehman were the most stressful experiences of my life. But it turned out to be a blessing in disguise. I was on the top of my game when I was laid off by Lehman. I could interview anytime, impress anyone with my charming stories, and needed less than 3 floors in an elevator journey to secure an interview call. Given my peculiar profile (euphemistic reference to lack of relevant experience), networking stood by my side when head hunters failed to help.

On the September 15^th morning I sent out an SOS message to my closest friends. Without blinking twice, I shamelessly sent out my CV’s to everyone in my contact book. Digged through the alumni network at business school, sought help from my professors and career services team, updated my profile on LinkedIn, wrote to my ex-colleagues, called my mentors at Lehman, and met bankers with whom I interviewed on campus – I basically didn’t leave any stone unturned. In some ways, the high profile bankruptcy worked to my advantage. Maybe if I had worked in a boutique investment bank that went belly up, nobody would have even noticed. The extensive media coverage helped to carry my message across.

Did it work? Eventually yes, but I spent close to a month biting my nails off wondering when and from where my next break would come. It finally came through a classmate of mine. Very soon I will be taking up a contract position in a capital markets middle office desk. Certainly not my dream job, but it will help me keep my foot in the door, and give me the time and cash flows to keep looking for one. I will live to fight another day.

The realities of London's job market

2008-11-12T08:44:00.000-08:00

This article was published yesterday, forgot to put it up here. This one got even more comments than my first article. Sadly, no one offered valuable career advice, I am still stuck with the same old choices - bus driving vs latte making!

-----------------------------------------------------------------------------------------------

There are two good reasons why people flock to business school – one, the network and two, because it opens doors. The career services team in b-school provides you with a great platform to interact with recruiters from different industries and ample opportunities to shift careers – you can walk in as Gordon Ramsay and graduate to become a Gordon Gekko. However, once you are out of business school and in the job market, that luxury doesn’t exist anymore – let me explain.

After graduating from b-school I joined Lehman in their Capital Markets Division a couple of months back. My goal was to become a trader. I believe I have the right skill sets for it – I am humble, honest, willing to learn and pay my dues, have a good understanding of the markets and a deep interest in economics. But then, I picked the wrong firm, joined them in the wrong city, and wrong division (fixed income). Four weeks back I was show the door.

Ever since Lehman fired me, I have been looking for jobs. Naturally, nobody is interested in hiring me as a trader given that I have zilch experience and might not contribute a penny to the bottom line in the near future. Fair enough. I then switched angles, brought my accountant skills to the fore (I am a qualified chartered accountant) and pitched to become a research analyst. I can dissect financial statements when I am half sleep, have been personally invested in the markets for over 8 years now, and used to make a living by researching and writing tax opinions for clients – enough to check all the right boxes? Hmm..maybe not. Yet again, quoting my lack of ‘relevant’ experience and the abundant supply of qualified labor in the market, I was shot down.

Given how the London job market works, i.e. the role of headhunters, it makes it all the more difficult for people in my position to find what they are looking for. In the weeks following Lehman’s collapse, headhunters were running around with fire on their heels. When the MDs and VPs are for taking, why bother with a trivial first year associate!

It took me 2 weeks and dozens more calls before a respectable big firm head hunter even agreed to meet with me in person.

But now, after meeting with a dozen headhunters, I have again hit a road block. I am not crying or giving excuses, but to me it seems like their incentive system is inherently designed to work against my interest. They look at candidates/ resumes that fit with their requirements rather than to help me find what I am looking for. They are quick to quote market conditions as the reason why I should get back to doing what I used to do before my MBA. Sorry, but my dreams are not up for sale this soon.

That is the primary difference between career services in b-school and headhunters in the job market. Career Services works with you to find what you want. They give you the opportunity to meet with potential recruiters - a chance to interview, to keep your foot in the door. Whereas headhunters get paid to come up with the best ‘fitting’ candidates – you might be so sure that you can charm the Company into hiring you, but that is only if they meet with you. Too bad, the headhunters won’t even put you in front of them if you don’t fit the bill. And this is where my first reason to go to b-school comes into play – network.

Leap of faith

2008-11-11T15:35:00.001-08:00

Remembrance day

2008-11-09T15:43:00.000-08:00

My calendar last week was choc-a-bloc. Besides chasing the Home Office to process my UK Work Permit, I spent the rest of the time visiting Museums. Tuesday was Imperial War Museum (if you are in London or plan to visit, this is a MUST see), Wednesday - Natural History Musuem and Thursday was the Churchill War Museum. Spent close to 4 hours in each, not enough, especially the Imperial War Museum. We managed to see just the first world war and parts of the second, and these two wars constituted just 20% of the Museum!

India was largely untouched by the World Wars and my knowledge of the World wars was limited to the five paragraphs in the NCERT 8th standard history text book and much later, the programs on History channel. Visiting these museums and seeing the remembrance day parade today gave me a much deeper understanding of what this day stands for.

Now I have enormous respect for Britain and Churchill in particular. This small island took the responsibility of restoring peace and justice during both the wars. Seeing pictures of burning London, thousands huddling inside tube stations and underground shelters (I sat in a bunker to experience a simulated blitz attack and that was scary!) and listening to accounts of wartime trauma that Britishers had to go through, has left a lasting impact on me.

Will write more about my Museum experiences later this week...until then here's Fuhrer suffering the real estate crisis

From one sinking ship to the other..

2008-11-09T14:55:00.001-08:00

Busy weekend, just catching up on reading - articles that caught my eye -

1. Advice to future bankers

2. GM the next Lehman?

In the last month or so, I have been following the auto industry more closely than before. Two weeks after Lehman fired us, I got a call from the equity research desk, they were interested in hiring me for the Auto sector. Eventually, I didn't get the job (long and dirty story on this later), but ever since I have been following the developments in this industry.

After declaring the worst ever results since WWII, Rick Wagoner, rather unashamedly, has threatened saying - Look what happened when you guys let Lehman fall, GM will be even worse. Very convenient.

The Big 3 in Detroit are still living in the 80s. Their business model is outdated, they have refused to change with time. They are likely to receive $25Bn from the Dept of Energy, but none of the car makers have come out with a concrete plan on what they intend to spend this money on. The taxpayer wouldn't like GM sponsoring the Survivor or NASCAR.

Drawing a parallel with Lehman - If I were keep my emotions aside, Lehman was bound to fail - classic case of survival of the fittest. The firm was too small to succeed and the minute Bear Sterns failed, they were the weakest link in the food chain. Similarly, I think it is time we let one of the Big 3 fail. GM and Ford have burnt 14Bn last quarter, they are selling 45% less, and haven't made any dramatic advancements on the technology front yet. The typical life cyle of a car ie buy and replace in 4 years doesn't hold anymore. Consumers aren't likely to buy a new car anytime soon.

The biggest strength of America is its flexible labor market. Fearing job losses and not letting GM fail would be huge mistake. The bailout would then not stop with the Auto sector. Dow and Exxon would be next in line asking for more money. Where do you stop then?

Oh, and did I tell you that I was scheduled to interview with GM in their Treasury division in Zurich? No surprises that I never heard back from them.

Axis of greed

2008-11-02T10:12:00.000-08:00

To finish off this Sunday afternoon that has been filled with intense reading & blogging - here is an excerpt from an article on bloomberg that traces the modus operandi of a maid turned realtor (and her husband) who rode the the real estate wave in Vegas.

"..the couple's operation worked like this: They recruited a person with good credit to pose as the buyer of a property in exchange for a fee of about $5,000. Grimm and Mazzarella told the buyer they would pay the mortgage.

The straw buyer would offer more than the asking price, telling the seller he would use some of the money to make repairs or remodel. Grimm and Mazzarella would apply for a mortgage for the straw buyer, often inflating his income and assets to support a bigger loan. When the deal closed, the straw buyer would ask the seller to send the purported repair money to entities controlled by Grimm and Mazzarella.

Then the buyer would transfer the property itself into a limited liability company controlled by Grimm and Mazzarella. The couple would often resell to another straw buyer at an even higher price and collect the difference. When the property failed to sell for any more money, they stopped paying the mortgage. The last straw buyer, his name on the loan, faced default notices, foreclosure, ruined credit and, sometimes, bankruptcy."

There is greed all around -

1. Straw buyers with good credit history who stupidly loaned their credit status to earn a few extra bucks
2. Realtors who duped innocent buyers by inflating house prices
3. Sellers who happily agreed to inflated selling prices
4. Retail banks that took whatever the mortgage brokers brought to the table
5. Investment banks that took pride in their ability to see the obscure but failed to see the complete obvious. Despite internal researchers crying wolf, they continued to extend leverage, and went shopping for retail mortgage banks to gain end-to-end control of loans which in turn forced them to warehouse risks on their balance sheet prior to securitizing and selling these loans as mortgage backed securities (MBS).
6. And finally, rating agencies that ignored obvious conflict of interest (by late 2006, 34% of rating agency fee income was derived from advisory services offered to banks on structuring MBS, and only 22% of their income was earned from normal rating services) and rated MBS without considering the impact of systemic risks.

How do we set this axis of greed right?

America say Konichiwa to Recession

2008-11-02T04:29:00.000-08:00

For long economists around the world showcased the two models for fighting recession -

The American model - Led by Greenspan, the Fed aggressively cut interest rates during 2001 crisis and effectively put US on the path of a V/U shaped recession. The recovery was swift and everybody hailed this as the successful model

The Japanese model - In the 90s when Japan suffered a credit crisis, the Central Bank hesitated in cutting interest rates. Consumers lost confidence, banks were saddled with non-performing loans, companies cut back on investments, and Japan entered the lost decade.

The current US crisis has stark similarities to the crisis in Japan during the 1990s. Loose lending by the Japanese banks was followed by a collapse in property prices. The government spent more than $400 billion on the bail-out and the Bank of Japan kept interest rates at zero for nearly six years. Eventually the economy saw signs of rebounding in 2003-04.

Here are some of the reasons why the Japanese economy went through the prolonged L-shaped recession:

1. Public Debt was at 150% of GDP. The Government didn't have the room to introduce a fiscal stimulus package.
2. Interest rate was near zero - Monetary policy failed to work as well
3. Poor leadership - The Central Bank dragged its feet, there was no TARP, no aggressive rate reduction, only hesitant action that came a bit too late.
4. The collapse of the stock and property market shook the consumer. Ever since consumer confidence has been low and the Japanese have preferred to stick cash under their mattresses than to spend.
5. Problems in the banking sector - The Japanese banks refused to come clean on their non-performing assets. Confidence crisis in the banking sector negated the impact of low interest rates - banks refused to lend to each other.

Japan shows how long it can take to recover from a financial collapse. Its stock prices did not hit bottom until 2003, more than a decade after they first started falling and property prices remain two-thirds below their highest level.

America is now almost in the same position. After thumping chests about how they will not follow the Japanese model of bailing out the banks, Hank Paulson had no choice but to throw good money at bad. US gross public debt is at 70% of GDP. TARP will only add to this. As much as Obama and McCain promise to cut taxes, the budget deficits will bind their hands. The sharp drop in S&P Corporate earnings this quarter confirm the impending lower tax collections that will follow. Fiscal stimulus is out of question.

Banks are yet to come clear on the mess hidden in their balance sheet. Near zero interest rate regime combined with low confidence in the banking sector will make the monetary policy ineffective.

So America, strap on your seat belts, this is going to be one long hard bumpy ride. The good times are over for now.

Whasssup

2008-11-02T03:44:00.000-08:00

Classic Budweiser ad - most of you would have seen this before.

Our first year marketing prof showed this ad in class. Thereafter all guy-guy greetings over the following two weeks were accompanied by some tongue action. Pretty disgusting..but good fun.

Now here is the new version - they managed to bring together the same people who did the ad 8 years ago.

Clever.

Here cometh the consultant

2008-10-30T16:11:00.000-07:00

If there was one thing that I knew for sure even before I stepped into business school, it was that I would not step out of b-school as a management consultant. There were many things that I didn't like about this profession:

- The long hours at work (which was why I opted for capital markets and not M&A)
- Structured thinking - Not my forte. I am an instinctive person. Its easier for me to think hard for 10 minutes than to ponder over something for 10 hours. Another reason why I love working in teams, I know that I have a safety net behind me, it gives me the licence to think creatively without having to worry about missing the big picture/most important issue.
- Powerpoint & Presentation - Even though I am good at it, I can't see myself making a living out of doing presentations.
- Projects that can take forever to finish - My attention span is limited and I get bored very quickly.

So I was very happy during the first term of business school. I atleast knew that I wouldn't be applying to all the consulting companies and I could instead focus all my energy on banking.

After this disastrous start to my post b-school career, I have had to revisit all my career related assumptions. I still know that I would be a good banker, but this isn't the time to be all dreamy and passionate. I have been there done that for 2 years. Reality bites and it is quite painful. I need a job.

So I decided to apply for industry jobs in corporate finance positions. A friend of mine who works for Bain in Sydney (he interned at Lehman over the summer and thought he also got an offer from Lehman, he preferred the sun & beach to London's rain, can't blame him) wrote to me right after Lehman went down, saying Bain was recruiting in Australia and if I would be interested, I should send him my CV. I let that email stay, decided consulting wasn't for me.

After refusing to look at consulting for almost 3 weeks, I finally gave in. Went to the career forum in Barcelona, met with a couple of consulting firms, arranged for interviews. Did multiple mock interviews (crack the case interviews) over the last few days, and today I finished my first back-to-back consulting interview.

Both interviews were exhausting and yet enjoyable. In my first interview, I was asked to value a the business of a mobile operator who is about to enter a developing country as the 3rd player in the market. The last thing I expected in a consulting interview was DCF valuation! That threw me off guard and I don't think I recovered from that very well.

The country had 90% mobile penetration and the existing two competitors were well entrenched, one had a 65% market share and the other 35%. I was told that our company wasn't offering a significantly different product, the incumbents had deep pockets and vast experience in the market. I hit a wall. Where do you get the new customers from? Wasted 5 minutes talking about expanding the market by penetrating the remaining 10%, until the interviewer cut me off by saying - Dude, have you heard of a concept called churning? Hmmm...

He then spoon fed me on all the dynamics of churning (market churn rate ~20%) and how the new company will gain market share from the existing players by just being present in the market (concept called fairshare wherein all 3 players get an equal share of the customers churning, so even though our company just started, they gain 50% of the churn market) I went ahead with the assumptions, but I was thinking, sweet lord - by just being a new entrant in a market where there is so much churn, you gain market share - no wonder mobile operators are still rushing to come to India (where churn is high and penetration is still low!).

Anyways, I missed the key issue and thereafter I could sense the condescending tone in my interviewer's voice. Just when I had finished computing the first year's revenues, we were already an hour and 20 mins into the interview. He ended the interview by saying - I know you haven't been in telecom before, so this would be new for you, yet... That was the sign. I had really hit the wall.

The second interview was better. Even before the interview started, I knew I had very little chance of being called back for the 2nd round. So with little pressure, I rolled up my sleeves and gave it my best shot. It went really well, and I thought I aced it effortlessly until this happened - Again a telecom case. But this one was on lowering tariffs and its related signaling and cannibalization effects. I was given the following figures - Country population 25MM, Our company's customer base - 2.5MM. Your truly, being the instinctive smart-ass, jumped to the conclusion that our company's market share was 10%. My interviewer led me along till the penultimate minute of the interview, and then slipped an innocent remark - Hey, I don't think you ever asked me what the mobile penetration in the market was - only 5MM have mobile phones! Kabooom. I am sure my interviewer would have been laughing uncontrollably inside when I pitched to him for 5 minutes on how the company should go after the incumbents and aggressively capture market share. All the while WE were the incumbents! How stupid. Arrggh.

That kind of sums up my first disastrous attempt at becoming a consultant. I would have to be blind not to see the read the road sign - This ain't for you mate. But I ain't stopping as yet, I have a couple of more interviews lined up. I will think hard (ie for 10 minutes) about whether I really want to be a consultant after I get an offer, till then this banker turned aspiring consultant will continue to march on.

Watch as the BRIC(k)s fall

2008-10-28T16:58:00.000-07:00

Despite all the news about how the BRIC countries are better placed to weather this current storm, I believe that these countries are headed towards a recession. Genius ain't I? Hold your gun.

The technical definition of recession is two quarters of consecutive negative growth in real GDP. When BRIC is growing at more than 8% on an average, you are right in asking how on earth could we have a negative growth in real GDP, and not to mention how this could ever happen over two consecutive quarters. Let me assure that is not my hypothesis either. I believe that this definition is ill fitted to measure factors that define the well being of a developing country.

Now set aside the technical definition and lets look at what recession means for the comman man (whether he is in developed or developing countries):
- high unemployment rates
- low consumer spend, corporate investments; and all this resulting in
- social unrest

Lets take the case of China. The Communist Party and the Chinese have so far held on to a gentleman's agreement. In return for giving up right of speech, free society and democracy, the common man was promised ample employment opportunities, economic progress and well being. So far it has been a fair deal. Chinese rural labor that has flocked to the cities have been welcomed and absorbed by the two growth engines - Construction and Manufacturing.

Now imagine the scenario where China struggles to deliver on its growth promise. The credit crisis and the recession in the west diminish China's chance of growth, GDP grows only by 5-6%. Here comes the problem. The supply of rural labor flowing into the cities is not going to dry up anytime soon. Whereas construction and manufacturing will not be hiring if not firing people. Years of success have created huge aspirations in the hearts and minds of the rural laborers. So far, they has kept their mouth shut because the growth promise was being delivered. When they don't find jobs then they shall start demanding their rights. Even the slightly diminished growth rates will cause massive unemployment, erode consumer confidence and cause large scale political and social unrest.

India is no different. Though democracy exists in one shabby form or the other, the current generation of youngsters have grown up without witnessing anything even remotely resembling a slow down. I haven't heard of anyone taking a pay cut in India in the last 10 years. Ever since the early 90s the country has experienced non stop growth. Literacy rates have improved, jobs were available in plenty, and the pressure on young children to achieve has never been any higher. Now imagine if growth falters. Will people settle for less?

The BRIC countries are also suffering from high food inflation. The Indian Central Bank head was oblivious to the gloom and doom in the market - he kept interest rates unchanged stating inflation concerns! Even though agricultural commodities have come off the highs touched in Jun 08, the domestic prices are yet to correct downwards. As a result people are still having to cope with high food prices on the supermarket shelves. While recession could lead to markedly lower demand for Oil, its impact on demand for food will be far muted. The population hasn't changed and people have to eat the basic quantity of rice and wheat to survive. The current drop in prices of agricultural commodities is following the other asset classes, but very soon food prices will be on their way up.

Thus lower growth, higher unemployment, food price inflation and higher social unrest are bound to threaten the BRIC countries in the months to come. Whether you wish to call it recession or not, the trouble is for real. Thus it might need negative GDP growth to put US and UK in the recession bracket, but when it comes to the BRIC countries, a 5-6% growth will have the same disastrous effect as negative growth in the developed economies.

Shopping in London

2008-10-27T13:51:00.000-07:00

I knew London was missing something, but I couldn't put my finger on what it was until today. The eureka moment happened when I was reading one of London's deeply engrossing intellectual tabloids while traveling on the tube. Believe it or not - London doesn't have malls! Yes, for a City that receives so many tourists every day, London is just about to get its first big mall. Okay, I will admit it, London does have a mall. It is one of the biggest in the world and if you look hard you will realize how cleverly they have managed to hide a whole airport in it! I am talking about Heathrow and jokes aside BAA makes more money from the mall than from running the Heathrow airport.

Anyways, getting back to real malls - the Westfield White City Mall is going to open doors end of this month. Talk about timing. The headlines on Evening Standard says - Gordon Brown will spend whatever it takes to get UK out of a recession. Looks like Mr Brown is going to be the lone shopper when the mall opens its doors to credit crunched Brits.

Hailing from a city which has exactly two malls, I can't say I was missing them, but I did find it surprising that shopping in London follows a truly different pattern from the rest of the world. It offers a variety of shopping experiences from the cobbled streets in Porto Bello to the swanky high street fashion names found in Oxford Street and Chelsea.

Malls - yet another thoughtful gift from the Americans to the rest of the world. It worked very well in the US because of cheap real estate, use of cars as the primary mode of transport and well spread out neighborhoods. It worked even better in China, India and other tropical parts of the world because they provided temperature controlled shopping environments that enhanced the whole experience. Imagine window shopping along the streets of Delhi in summer. This also explains why the mall culture didn't quite take off in London. Real estate is bloody expensive, tube is the City's life line and most neighborhoods are self sufficient.

But it is surprising to note that Londoners and tourists alike don't seem to mind the irritating drizzle, the chill wind, and the countless traffic signals while attempting to shop. Given that I have a lot of time these days, I tried window shopping with a few female friends the other day. London's pavements are so small that you literally have to squeeze between a red bus on the road and a drunk man on the pavement just to make your way through. My female friends were never allowed to ogle at the windows for too long. The crowd kept pushing them along and I must say, the speed was just right for me. For a nation that boasts in affording equal opportunity to everyone, the high heeled women were certainly at a disadvantage when it came to navigating the cobbled streets.

Wouldn't malls be easier, safer and more comfortable avenues to shop? Mr Brown, here is my two pence on saving UK from the impending recession. Instead of squandering billions on re-capitalizing banks, maybe you should spend them on building more malls. Atleast I could take a break from my afternoon sitcoms - in just the last month I have seen Two and a half men evolve into Three men!

Why Fuld didn't know Dick

2008-10-25T03:31:00.000-07:00

Much has been written about the Gorilla, the man who re-built Lehman to what it was. I am sure research assistants in business schools across the world are already writing long winding cases profiling his leadership style and his fateful last minute decisions that brought the firm down.

Lehman was an employer of choice in business schools. So what made the firm look and feel different? Most people would say it was the cohesive culture of the firm and Dick played a huge role in shaping it. Culture - oh yes, the same dreaded word you are required to swear by in banking interviews though you don't know squat about what it stands for!

Honestly, Lehman was different and we all could feel the difference. Much of what Dick did made the firm stand out. Some of his initiatives were supposed to make the firm think long term and avoid the very pitfalls that brought it down.

Bonuses - 30% of yearly bonuses were paid in stock options that vested in 5 years. There was no incentive for the employees to take decisions or risks that made money this year and but eroded firm value subsequently. Consequently more than 30% of the outstanding stock was owned by employees. So what is good for the employees was bound to be good for the shareholders and vice versa.

One firm - The 80s & 90s saw a huge culture clash between the trading and investment banking businesses. The traders were the street mart, mean and aggressive bunch while the bankers were the Ivy league Armani fitted rich kids who could wine and dine with clients. Both groups made money but their styles were different and both had huge egos. Lehman suffered heavily and Dick wanted to set this right. One firm meant we worked together across divisions and geographies.

Client first - Lehman preferred to make pennies from its clients than to make millions by wagering its own money. It was a smaller firm with lesser capital and the agency business model fitted well.

Strong leadership - Dick led from the front. He had worked at Lehman for over 40 years. He had weathered the ups and downs and he commanded huge respect and loyalty from his colleagues. There was no CEO on the street who had been at the head for so long. Dick was a survivor.

As result of all this, Lehman employee turnover was the lowest in the industry. The firm made every attempt to accommodate the interest of the employees, mobility was encouraged, talent was groomed in-house and people genuinely enjoyed working for the firm.

But what happened?

Bonuses - I watched Dick Fuld testify before the Senate. It was during that testimony he explained why Lehman went to the market in Dec' 07 and spent close to $6bn in a share buy-back. The reason - In late 2007, given the market condition and low share price, to keep the employee morale up, Lehman issued additional stock options as bonus. To avoid share dilution, it spent $6bn buying back shares from the market. 8 months later when the firm was begging for cash, that fateful decision would have come back to haunt them. Precious $6bn wasted.

One firm - In the days following the demise of Lehman, I would have punched anyone who would have uttered the phrase "One Firm" to me. What a joke! Money was transferred from Europe to US, and Lehman Europe was left to fend for itself while the US division was sold immediately to Barclays. The bonus pool of US, Europe and Asia was pooled together in the US and this is now being used to pay just the US employees after the Barclays take over. The US employees will get hefty bonuses while fixed income employees in Europe who were not taken over by Nomura won't even get a severance pay.

Client first - Because of its agency business model, Lehman was the No1 trader by volumes on the LSE. The hedge funds felt more comfortable trading through Lehman knowing that the firm was not taking advantage of the information flowing through it. However this model had a huge drawback. While Goldman was putting its own money on the table and reaping huge profits, Lehman was left counting its pennies. The analyst on the street were comparing both firms and Lehman was getting the flak for not making enough money. Lehman succumbed to the pressure and decided to put more of its own capital to work. To make up for the late start they decided to invest aggressively and quickly. The low capital base meant that Lehman had to extended its leverage many times over. Cheap credit was easily available back then but when the assets turned toxic, and the markets became cautious, credit squeezed them out.

Strong Leadership - Rather the leadership was too strong. Dick couldn't go let go. He had been in the firm for too long, sworn that he would keep the firm independent and hence couldn't sell the firm when it was the only viable solution. In comparison, Thain sold ML without blinking and came out with flying colors.

What are the lessons for the future?

Strong business leaders need effective counter checks to prevent them from getting carried away. Lehman's Board was caught sleeping and didn't have the guts to question Dick.

If you are good at something stick to it. Despite boasting a client first model, Lehman did exactly the opposite - spent billions of dollars in buying over valued assets at the fag end of the credit cycle.

And finally - sorry Mr Gekko but greed is not good. A year back Dick had it all - an illustrious banking career, a cult like following on the street and not to forget, an impressive art collection. Unlike Enron or Worldcom that went bust because of intentional fraud, Lehman's fall was purely because of greed. And Dick was caught with his hand in the cookie jar.

How safe is your job?

2008-10-22T11:15:00.000-07:00

An optimist is a banker who irons five shirts on a Sunday evening - If you haven’t read this joke before, please wake up, the world around you is going through a mini crisis.

Though a stale joke by now, what strikes me most is the repercussions this Wall Street induced crisis has had on the common man. For instance, ever since I was fired, I have stopped giving my shirts for laundry. One, I don’t use as many these days and two, I have tried to wash some of them myself. If I had my way, I would love to share with you my newly acquired knowledge on which detergent works best for which kind of tap water, but for now, let me get back to my dirty laundry issue.

As a banker, I was paid enough and I certainly was prepared to be fired the next day. However a laundry man who does a good job and makes enough money to lead a contended life should feel terribly unlucky that his business is going down for no fault of his. He didn’t earn as much money, didn’t take as much risks and yet his occupation is inextricably linked to the vagaries of banking. How unfortunate!

So that brings me to the question –is there something called a safe job?

I did two rotations during my 10 week summer internship in 2007. The first one was in a structuring desk in securitized finance (bad word, I know) and the second five week rotation was in an interest rate trading desk. My second rotation was a disaster. I started just when the first signs of the credit crisis started to emerge. The senior trader refused to look me in the eye except when he urgently wanted a coffee or a sandwich from the cafeteria. I sat next to him for five weeks, read every single article on interest rate strategies and quietly stared at his trading screens all day. Since I never once asked a stupid question or mixed up his lunch order, he gave me a decent evaluation.

I turned down the pre-placement offer from securitized finance and instead opted for a generalist offer. All through last year, I have been congratulating myself for my excellent foresight. I probably would have been laid off even before joining Lehman if I had taken the offer from securitized finance. I was happy to have taken the “safe job” - that of a generalist associate. But as it turned out in the end, it wasn’t safe enough.

All through my brief stint at Lehman, every single senior manager whom we met during training told us – don’t worry, you guys are fresh out of business school, you are a cheap resource, nobody will touch you. No surprises, we, the first year associates, were the first to be fired by Lehman after they filed for bankruptcy. So much for thinking ours was a safe job!

That leads me to conclude that irrespective of where you are, when the stuff hits the fan, you my friend, will be on the firing line. When you can’t see the light, don’t get all cocky, the train might be right behind you!

Bling-Bling

2008-10-22T11:12:00.000-07:00

A fat sign on bonus and a contract to join one of the world’s most prestigious investment banks – what do you call that – a sweet deal or a passport to hell? A year back, as a first year business school graduate, I thought it was my dream come true.

In June’ 07, I started my 10 week summer internship at Lehman Brothers in their Capital Markets Division. On the penultimate day of my internship, I was offered a contract to join back the firm as an Associate in August 2008. For 2 long years I had dreamt of this. The path to that moment had been arduous. I quit my comfortable job in Citigroup Consumer Banking, worked hard to get into business school, networked my way into Lehman, and there it was, the contract that I thought would put me on the path to success.

Here I am, a year later, sitting at home jobless, with a huge student loan on my head and staring at a paused image of train wreck in slow motion!

Having been a banker, albeit for less than 2 months, I am here to share some of my unbiased views on the industry and its strange affinity for business school students. To kick start this series, let me talk about the most controversial topic - money.

Banker salaries are an easy target for criticism. Given that I am not a banker anymore, I am tempted to join the crowd as well. However, if there is one reason why bankers should be paid more – it is because of the risk. Not the risk they take in making money, but having to work every day with the fear of maybe losing their job the very next day. I was called on the phone on a Friday evening and told – don’t bother coming into office on Monday. No prior intimation, no heart to heart talk, no severance pay and not even a simple thank you.

When things go bad, bankers are the first lot to loose their jobs. Main Street comes next. It doesn’t make sense if the bankers were paid the same as the ones working for M&S. It is only when the crisis hits the Main Street do people start comparing their salaries with the bankers. Little do they realize that by the time they feel the pinch, the bankers have had to sit through a root canal.

Last year I could have very well said no to the fat pay/sign-on bonus and opted for a general management job in Industry. But I took the bait (primarily because I really wanted to work in banking) and joined Lehman five weeks before they filed for bankruptcy. Unlucky for sure but I was paid the price for taking this risk

Next week – If you don’t see the light it means the train is behind you.

Paid to blog

2008-10-22T11:03:00.000-07:00

I am now a columnist at xxx! Getting paid for writing about my Lehman times..giving gyaan to future bschool students etc. My first article got approved today and will be published next Tuesday. Then on, I will have my weekly column on their printed newsletter as well.

The handsome pay (I thought as a banker I had the highest salary per hour worked, but this beats that) has substantially reduced my enthusiasm to find another job..if at all one exists :)

This is my third attempt at blogging. This time I am sure it will be more successful - my incentives are aligned - I am being paid to write/blog, and I have way too much free time on my hand.

I will put here some of the unedited versions of my articles that will be subsequently published elsewhere. Do note - the target audience for my articles are the bankers and prospective bankers ie business school students. So you might find this boring if aren't part of this crowd. But I will try to write about something more useful as and when I find time.

For starters - here is a video that offers some good advice during turbulent times.

Smile and happy reading