Bloomberg's Guide To Weathering The Storm

Posted by Bess Levin, Jun 04, 2008, 1:45pm

What the banks should be doing is simple: Recruit the best people in sensible numbers and pay them properly. When times are tough, keep these workers even if they aren't generating any income. In the boom, maintain staff levels, even if it means turning away some business because there is no point in hiring people you will have to fire a year later.

And here's what alcoholics should do: scale back consumption of alcohol to a moderate level. On a good evening, you can enjoy three to four drinks without waking up with a hangover yet you remain sociable. On a uneventful evening or during the morning or midday, refrain from imbibing at all. Hope that was helpful.

Banks Need to Step Off Hire-and-Fire Treadmill [Bloomberg]

1Recommend this! 19Comments

Tags: banks, fountains of wisdom, layoffs

Comments

Posted by guest, Jun 04, 2008 2:08PM

And here's what CEOs who want to get something done in politics should do: do not assume that you can treat other politicians and the public with the same high-handed arrogance that you can get away with toward your employees.

Posted by guest, Jun 04, 2008 2:11PM

Ahh turning away business in times of a boom is great for shareholders aka the people who determine your job as CEO. I heard there's no pressure like the being a CEO, so BB's plan should work.

Posted by Investorcluzo, Jun 04, 2008 2:25PM

wall street is the most poorly managed "white collar" industry known to man. why try to fix it now? and turning away business, wtf? most banks (ms, gs) already have teams of analysts in india. that's right, the poor i-b analyst job has been shipped off shore (don't tell hillary). I'm sure there are plenty of bright kids over there who are waiting to sign up for less than 1/2 of what their american counterparts are getting paid...let the merry-go-round that is wall street's hire and fire machine continue.

Posted by guest, Jun 04, 2008 2:26PM

I'm pretty sure both BB's and BL's plans are terrible...

-HighWaterMark

Posted by guest, Jun 04, 2008 2:48PM

Don't forget to only execute trades that make you money!

Posted by guest, Jun 04, 2008 2:57PM

Don't lose money, print money!

Posted by guest, Jun 04, 2008 2:57PM

@2:48... buy high, sell low...

Posted by guest, Jun 04, 2008 3:35PM

@2:57,

I too have been caught by that "buy high, sell low" machine for years. How do I get loose?

Posted by miami, Jun 04, 2008 3:39PM

Only hire people smarter than yourself!

Be first at work and first to leave!

Work smarter not harder!

It's hard out here on a ....wait.

Posted by guest, Jun 04, 2008 3:41PM

"there is no point in hiring people you will have to fire a year later"

This is not even close to true. Logical conclusion here is that all the seasonal production industries should just shut down for good. Why let people come to work if you are just going to tell them to go home for 6 months half a year later.

Posted by guest, Jun 04, 2008 3:55PM

Any openings out there for ppl who like to drink seltzer and read DB all day???

Posted by guest, Jun 04, 2008 4:00PM

@3:41,

Wall St employment is not supposed to be seasonal...isn't it? Well, maybe I should rethink that theory. I have it now...Wall St's season is 5 yrs long.

Posted by guest, Jun 04, 2008 4:30PM

re 2:25 -- it's amazing how often the engine of capitalism overshoots its mark in either direction.

Posted by guest, Jun 04, 2008 8:22PM

Just one small issue -- that article wasn't written by or reflective of Michael Bloomberg. It was an opinion piece.

Posted by Anal_yst, Jun 04, 2008 9:01PM

@ 6:22

No shit sherlock. It was an opinion piece by a Bloomberg (the company) reporter though.

Step 1: Engage Brain

Step 2: Open mouth (type, etc)

Posted by guest, Jun 04, 2008 9:56PM

@8:22, yeah it's referring to the news organization, in the same way that a headline about a story by a wsj writer would say "wsj: ..."

Posted by guest, Jun 05, 2008 9:59AM

wall street treats its workers worse than UAW workers in auto factories in Michigan. Just wearing pin-stripe suits to work doesn't make wall streeters feel any better treated. the whole industry is a sham. as an analyst i used to think only analysts are disposable, but this is a reality check that everybody can be let go. while the ceo goes playing golf, bridge and smoking some ganja.

and yes, there are armies of analysts in india already. scores of ivy-league students who are looking for a job as an anlsyt will realize in a few years that all those jobs are already in india.

Posted by guest, Jun 05, 2008 1:48PM

Anal_yst @9:01 pm. This is guest @ 8:22pm. I don't get the facile put-down. Bloomberg posts many independent writers' opinion pieces, critical reviews, etc. There's always a disclaimer at the end that the article doesn't reflect the opinion of the organization. There's a difference between an op-ed piece by the editorial board of a periodical and an independent op-ed piece. If you're writing on behalf of the editorial board, that can be said to reflect the news organization. If you're just being published to add some variety to the editorial page, and there is a disclaimer from the news organization in the article, it's not accurate to say that the article reflects the view of the periodical.

Bess's headline created a false impression -- that Bloomberg Financial Services was providing guidance to weather the bad times. It's not. It's publishing the view of one writer who questions the traditional management of Wall Street. I checked back on Matthew Lynn's piece. It's carried as "Opinion" and at the bottom is a disclaimer that the column reflects only the author's view and not the views of Bloomberg. Yes, Matthew Lynn is employed by Bloomberg, but no, in this instance, he is not speaking for them.

This is a standard journalistic convention. Journalism 101.

Posted by guest, Jun 05, 2008 2:09PM

guest @Jun 05, 2008 9:59am. I agree with you that Wall Street workers are treated worse than UAW members in auto factories. But the UAW members are losing jobs, permanently, all the time, due in part to the high cost of labor in Michigan, created by 75 years of relentless union organizing.

I've heard this theory advanced about white collar jobs going to India. First it was going to be lawyers. Now it's going to be analysts. I just don't buy it.

Lawyers were the worst idea for foreign outsourcing, because each lawyer is trained to work in the state he or she practices in. State laws vary from state to state, as does state practice. Although American law and Indian law have some of the same roots, there are wide variances. You're never going to replace a skilled practitioner's understanding of the the nuances of his or her state's laws, or the personality and tendencies of the judges appointed to hear the case. Hiring lawyers to grind out work for a jurisdiction they may never have even seen is not a clever cost-cutting idea; it's penny-wise and pound-foolish, and when the inevitable scandal occurs, it will be abandoned.

Similarly, it is very helpful to the higher-ups in an investment bank to have a trained analyst working next to them. An analyst in your office, familiar with your procedures, can anticipate a problem and act independently to resolve it, saving you time. Far-away analysts wait for literal instructions. The same bonds and loyalties do not develop between a manager in the states and an analyst in India. Managers relying on analysts working at a distance give up aspects of quality control and time management for their analysts. Finally, a manager develops a weaker sense of who is the good performer and who is not, who is sure to show up and who is not, and who has a good character and who does not.

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