In Other News, You, Non-Cheater, With The Good But Not Great GMAT Score, Might Be Getting Into HBS This Year!By Bess Levin
Craig Robinson has gone from trading bonds for Morgan Stanley to coaching basketball at Oregon State, widely considered to be one of the toughest jobs in college basketball. The job was offered to at least three other top coaches before Robinson finally agreed to leave his spot as head coach at Brown.
Robinson graduated from Princeton, where he was a basketball star, and got an MBA in finance from the business school at the University of Chicago. After a stint at playing professional basketball in Europe, Robinson was a bond trader at Continental Bank, Morgan Stanley Dean Whitter and Loop Capital Markets, a minority owned investment banking firm.
Turning around Oregon State’s team will be a challenge for Robinson, perhaps harder than a bond trader trying to dig his way out of a portfolio heavily invested in adjustable-rate mortgages. Robinson, however, comes from a family with grand ambitions. His brother-in-law is Barack Obama.
The Unlikely Candidate [SI.com]
From the files of the “maybe we never should’ve gotten into this in the first place” department: the RMBS group at the S&P has supposedly informed the would-be incoming Associate MBA class that their services are no longer required. Additionally, a “bunch” of research assistants, “some” MDs and one director have been downgraded from “career watch negative” to “dismissed.”
I really don’t know why we are spending any time worrying about these “victims” of the sub-prime crisis. Also, I really don’t want to be bailing out borrowers stupid enough to be under contract on new real-estate with financial plans that call for them to have 80% occupancy 2 months after closing, a 7% down payment and 7.5% interest rates.
So now their take-home falls 15%, their down payment requirement doubles and they have to pay 9.5% and I’m suppose to feel bad?
You will have to excuse me for not wanting to give taxpayer support for a borrower who wants to own a 160,000 square foot building to keep up with the Jones’ on a mere $41 million budget.
Housing Crisis Hits Its Own [Washington Post]
We wonder if there is a direct relationship between the performance of investment banks and the public image of investment bankers. A few years ago, New York’s major publishing houses were fighting each other in a desperate bidding war for the rights to publish Dana Vachon’s Mergers & Acquisitions: A Love Story. (And, before the last financial crisis of this magnitude, Scott Fitzgerald’s The Great Gatsby was narrated by a young man who came to New York to work in investment banking.) But now all the sad young literary men have turned against investment banking, regarding it as perhaps the lowest occupation available to educated people. Lower, even, than television writers.
Here’s a guy who actually wrote a novel called All The Sad Young Literary Men lamenting that many of his college friends never became anything that counts. Instead, they became investment bankers.
Even worse than the temporary psychological distortion is, as [Dean of Columbia Journalism School Nick] Lemann argued in “The Big Test,” the permanent sense of entitlement the admissions game provides. Winners can plausibly claim they participated in a brutal competition (even if many potential competitors were never told about it). So we owe no one anything. Many of the people I went to school with became doctors, public advocates, television writers who bring laughter to the American people. But most of them became, like my friend who believed that getting into Harvard was the hardest thing in life, investment bankers. We meritocrats have not, generally speaking, used our fantastic test-taking abilities to build a more equitable world. In fact, buoyed by a sense of the fairness of the process, we may have done the reverse.
Admission Impossible [New York Times]
This terrible video just about proves that business school makes comedy impossible.
In our continuing (and continually failing) effort to provide the finest in financial musings for our readers, we at DealBreaker are pleased to announce that Equity Private, author of the much-loved Going Private blog has joined DealBreaker as a Guest Editor at least until May 1st. Ms. Private will be filling in for John Carney, who is fortunate enough to be departing for a month to enjoy a well deserved, and somewhat overdue vacation, April 4th.
For those of you who have been hiding under a rock for the last two years, Equity Private is a pseudonymous Vice President at the equally pseudonymous “Sub Rosa,” a New York based, middle market, private equity firm focused on leveraged buyouts.
Ms. Private either holds a MA/MBA or a JD/MBA (though she refuses to tell anyone which) from a top tier university. We don’t know which university, of course, but given her rather overt animosity for one in particular, we’re pretty sure it isn’t Stanford. Either way she has too many degrees, and not enough beachfront property in Sardinia (500′ really doesn’t cut it anymore).
I took a break from writing about JPMorgan and Bear Stearns all day to have a little chat with the newest edition to the stable.
Bess Levin: So, Equity, you’ll be with us from now until Carney returns at the end of April (at which point I’ll be taking a month off to just chill by the way). Are you intimidated at the prospect of having to fill Carney’s (proverbially) big shoes.
“I do not believe that politics in the long run is about individuals. It is about ideas, the public good and doing what is best for the State of New York.”
Eliot Spitzer, the gangly governor of the Empire State whom federal wire-taps allegedly caught arranging a tryst with a prostitute on the eve of Valentine’s Day, took the opportunity afforded him today by the sudden attention of the national media to deliver that short lecture on civics. Other men–even that subspecies known as politicians–might have been humbled by the circumstances, and perhaps even resigned from public office. But Spitzer is not like other men, he reminded us today.
There’s a certain poetic quality to this final act of Spitzer’s. His extraordinary popularity with members of the press (now presumably extinguished) was rooted in his willingness to leak, sotto voce, allegations of misconduct in the personal lives of the subjects of his investigations. The press loved the juicy headlines. His motivation was apparently to embarrass and intimidate the subjects of his investigations so that they would be forced to comply.
We admit to enjoying the spectacle of watching a man so given to the high moralistic tone brought low by such a misdeed. As one commenter on the New York Times wrote, he’s gone from Eliot Ness to Eliot Mess. But this is not just schadenfreude. There’s a matter of serious public concern beneath the cheers and smirks of those who won’t be sorry to see Spitzer fall from the bully pulpit. What the federal wiretap has uncovered is not just a sex scandal but a dark crack running through the character of New York’s governor. It’s as if we were Basil Hallward looking for the first time at the picture of Dorian Gray.
That a man so versed in the blackmail style of prosecution would so readily open himself up to that dark art is, at the very least, extraordinary. One would think that a man who deployed his aides to whisper about a corporate executive allegedly “banging” his assistant, would be wise enough to the ways of the world to avoid putting himself in a position where he could be blackmailed. That he lacked such wisdom–or ignored it–shows a reckless disregard for the responsibilities of the high office to which the people of New York elected him.
That reckless disregard is coupled in Spitzer’s character with a steadfast self-regard. Even in his brief apology, he focused mostly on how he had violated his own standards of conduct rather than those of the public’s mores and statutes. It is as if, in the kingdom of Spitzer, there is no crime worse than violating the standards of Spitzer.
Where did this sense of self-regard come from? Spitzer is the scion of a family made wealthy by real estate investments. He went to Horace Mann High School, graduated from Princeton and Harvard Law School. Like Barack Obama, he was an editor of the Harvard Law Review. Many others have emerged from similarly privileged backgrounds without experiencing the ego inflation that fueled Spitzer’s reckless self-regard. Even now, the origins of this deformation of characters remain illegible to the public.
If Spitzer were open to the standards set by those residing beyond the bounds of his own mind, he might take a page from one of the earliest targets of his crusade against Wall Street. In 2002, Spitzer went after Merrill Lynch’s investment banking and research practices. After he described Merrill’s conduct as “a shocking betrayal of trust by one of Wall Street’s most trusted names,” Merrill Lynch stock sank, and the company lost $5 billion in market value in a few days. Reading the writing on the wall, Merrill recognized that the good of its shareholders lay in a quick settlement rather than a protracted defense.
The writing is all over the wall, Mr. Governor. If you really want to do what is best for New York State, it might be time to start reading it.
Off the top of our heads, we can’t name one woman in a prominent position at a quant shop. Maybe this is why.
Math 55 is advertised in the Harvard catalog as “probably the most difficult undergraduate math class in the country.” It is legendary among high school math prodigies, who hear terrifying stories about it in their computer camps and at the Math Olympiads. Some go to Harvard just to have the opportunity to enroll in it. Its formal title is “Honors Advanced Calculus and Linear Algebra,” but it is also known as “math boot camp” and “a cult.” The two-semester freshman course meets for three hours a week, but, as the catalog says, homework for the class takes between 24 and 60 hours a week.
Math 55 does not look like America. Each year as many as 50 students sign up, but at least half drop out within a few weeks. As one former student told The Crimson newspaper in 2006, “We had 51 students the first day, 31 students the second day, 24 for the next four days, 23 for two more weeks, and then 21 for the rest of the first semester.” Said another student, “I guess you can say it’s an episode of ‘Survivor’ with people voting themselves off.” The final class roster, according to The Crimson: “45 percent Jewish, 18 percent Asian, 100 percent male.”
Why Can’t a Woman Be More Like a Man? [The American]