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Job market forcast for 2008: It's not all doom and gloom

Andy Nguyen

Member
Banks limit job cuts for fear of missing rebound

Fri Dec 21, 2007 10:36am GMT
By Olesya Dmitracova
LONDON (Reuters) - Investment banks may have bucked a common trend by learning something from history: despite huge losses on bad home loans, they are at pains to avoid the mass job cuts many made and then regretted in the last market downturn.
Instead, the likes of Morgan Stanley and UBS AG, which have flagged lay-offs since the subprime mortgage crisis escalated in August, are likely to move some staff from worst-hit divisions into healthier areas whenever possible as they wait for hurt businesses to recover, market players say.
"In 2000-2001 banks cut numbers too quickly and when the markets came back people were basically caught short," said one senior London-based investment banker.

This year, the job cutting began in the area closest to the mortgage troubles -- loan origination and servicing -- and later spread, affecting mainly leveraged finance and structured products such as collateralised debt obligations.
But buoyant global markets have fuelled frenetic hiring by U.S. and European banks in recent years and given the underlying staff numbers, the cuts look restrained.

In fact Bear Stearns Co Inc, which posted a much bigger-than-expected quarterly loss on Thursday, said its overall headcount as of November 30 had risen by 500 from a year ago despite the loss of about 1,400 employees in the fourth quarter.

HOW MUCH MORE?
One banking analyst at a global bank forecast more job losses in structured credit over the next few months but added: "The banks don't want to let go of too many people because they feel this market will make a comeback."
Bank of America Corp has taken some of the most drastic measures so far in response to the subprime crisis, slashing 3,000 jobs. But this is still only 1.5 percent of the bank's total headcount.
"The cuts have been smaller than most of us would have expected," the banking analyst said.
The extent of further headcount reductions across the world is difficult to predict because banks are reluctant to be seen as cost-cutters and are postponing job cuts until it is absolutely necessary, recruiters say.
For now, banks prefer redeploying staff and are refraining from making forecasts.
After Morgan Stanley posted a fourth-quarter loss on Wednesday, Chief Financial Officer Colm Kelleher said hiring plans are under review, adding that the bank will reallocate headcount worldwide from businesses that don't need it.
"We'll just see how the dice fall on that one," he said.

CREDIT IS DEAD. LONG LIVE COMMODITIES!
There is more certainly about how investment banks are likely to refocus their activities away from the "fallen angel" of structured credit.
Analysts say commodities, distressed debt and restructuring are among businesses likely to steal the limelight -- and staff -- next year and forecast an overall move towards less complex, "plain vanilla" activities.

Wall Street firms have also started moving expatriate bankers in New York and London back to their home countries such as India and China. Recruitment for emerging markets looks set to remain in rude health as bankers expect them to keep equity issuance and M&A deals flowing next year.
Both Bear Stearns and JPMorgan Chase & Co, which have cut jobs, said they will boost headcount in growth areas.
"There's a lot of interbank movement in equities where people are still hiring," said Sam Dean, global head of equity syndicate at Deutsche Bank AG.

Major investment banks are still hiring in commodities and energy, while demand in emerging economies such as China should help offset any slowdown in the United States. But the true extent of banking layoffs may not become clear until well into next year.
"The early part of the year is always about recruitment, the latter part of the year, indeed Christmas time, is about any cuts that need to be made," said Jonathan Evans, managing director of recruitment firm Sammons Associates.
 

Andy Nguyen

Member
Anyone wants to move up north ? According to this article, the hiring has been pretty robust.
The subprime mortgage disaster is less severe for Canadian financial institutions and hasn't had a major impact on their hiring plans.

Indeed, the University of Toronto's Rotman School of Management hasn't noticed any slowdown in recruiting activity on campus, according to Jeff Muzzerall, the school's director of business development.
"All of the companies that recruited last year continue to recruit, including the Ontario Teachers Pension Plan, The CPP (Canadian Pension Plan) Investment Board, Goldman Sachs and the Hospital of Ontario Pension Plan," Muzzerall told us.
Hedge funds also are hiring. "You are always on the lookout for people who can drive Alpha on a sustainable basis," says Phil Schmitt, chairman of the Canadian Alternative Investment Management Association and chief executive of Summerwood Group Inc., a hedge fund based in Toronto. "It's an industry that thrives on ideas that aren't in the mainstream," he observes. "We’re trying to find return sources that aren't available to traditional portfolios."

Talent Heading North
In previous years, Canadian firms worried about the brain drain of talent to the U.S. That's less an issue now, given the favorable exchange rates of the Canadian dollar and the desire of some Canadians living in the U.S. to return home in hopes of finding a less stressful lifestyle lifestyle.
MBA graduates at Rotman are getting salaries averaging (Canadian) $83,000 with signing bonuses of between $15,000 and $25,000.
Increasing numbers of U.S. residents are seeking jobs in Canada. "Students from top U.S. business schools are hedging their bets by applying to Canadian investment banks, strategy consulting firms and packaged good companies," Muzzerall says. "Rotman graduates' main competition this year is as likely to come from Harvard, Wharton and Columbia as it from our great Canadian colleagues."
Muzzerall describes employers as seeking a minimum of three years experience with a top-flight firm. Having a CFA or CA designation also helps along with "excellent social skills and the ability to communicate what the numbers mean to clients and colleagues."

Competitive Recruiting
The hiring process now includes meet and greets with potential colleagues so they can get to know applicants in less formal settings, such as over dinner or even a hockey game. "The recruiters are coming early in the process and trying more innovative ways to target their top candidates by hosting educational events, career development workshops and social networking and entertainment events," says Muzzerall.
Both Schmitt and Muzzerall say competition for top talent remains intense. "Talent remains a scare resource," Schmitt explains, while Muzzerall describes the competition for top students at his campus as "vicious."
Part of the dynamic is the renewed competition hedge funds are facing from traditional investment players entering their business because of its high margins, Schmitt says. "They have now realized that to get into the game, you have to hire expertise."
Job migration remains common. For instance, Toronto-based Sprott Asset Management recently hired away Charles Oliver and James Horvatt from AGF Funds. Oliver, who has 21 years experience in the investment business and Horvat, who has more than nine years experience, joined Sprott as investment strategists.
Though Canadian firms do not have nearly the exposure to the U.S. subprime mortgage market as their U.S. counterparts, they aren't breathing easy. "They're concerned about their bonus structure this year should the slowdown in the United States carry forward north of the border," Muzzerall says. "It's not yet affecting headcount for recent graduates."
 

Nahed

Nahed
If you like the cold weather, the snow and dresssing like an astronaut (just kidding :D) !!! Why not... ! It is the case for Montreal don't know much about Toronto.
We did hear about some job cuts here in Montreal from Canadian and non-Canadian banks, but not as important as in US banks(Canadian Banks are smaller). Another thing is that bonuses are decreasing this year and some banks did a freeze on 2007 bonuses ...That means no BONUS at all. I would wait for 3 or 4 months to see the full impact of the subprime crisis on Candian Banks.
 

Andy Nguyen

Member
Quantitative Analytics Hiring Strong in Chicago

Apr 24 2008
Suzanna de Baca
While many financial professionals are concerned about job security and plummeting compensation, at least one segment remains healthy: quantitative analytics.
Mid- to high-level professionals with advanced degrees in quantitative fields and work experience are a hot commodity in Chicago, says Jim Geiger, vice president at Analytic Recruiting, a New York-based firm with a strong presence in the lake-front city. "Someone with a Ph.D. in a quant science is very attractive in the Chicago market right now," he says.
Prop Shops Hiring
"Firms with strongest demand are trading firms," according to Kevin Krumm, partner at Objective Paradigm, a Chicago-based recruiting firm. The need for quantitative talent is particularly robust among proprietary trading shops in Chicago, he adds.
Ilya Talman of Roy Talman & Associates, Inc., a locally based recruitment firm, says there is "unending demand for quant traders" in Chicago. While a person who has a strong general quant background can be successful, Talman sees prop shops in the market specifically for "someone who has come up with a strategy, programmed it, run it and fine tuned it."
Need in Options and Derivatives
"Demand is high, especially in options and derivatives areas," adds Ryan Pollock, Krumm's partner at Objective Paradigm.
Geiger agrees. The need for quantitative analysis has evolved from changes in the equity business over the last ten years, he notes, especially in Chicago, where financial markets have traditionally been even more quant-driven than other regions because of the emphasis given to these areas by local educational institutions.
Geiger also notes a growing trend to incorporate the use of algorithmic modeling in various types of trading as firms work to take advantage of inequities in the market. Most firms, including long-only shops, "Don't execute stock trades anymore without running them through some sort of analytics," he says.
From Mid- to Senior-Level
According to recruiters and insiders, demand exists at all levels, from C-level and managing directors to experienced programmers. "Different trading firms have different needs: Some are looking for department heads and other need individual contributors," Ryan notes.
An ideal candidate at any level must possess a strong educational background. A Ph.D. in a mathematical or scientific field is a must, say recruiters. Degrees in mathematics, statistics and physics are attractive, as is advanced study in financial engineering, a more recently offered degree.
Experience is also key, with three years in industry a baseline minimum. With some firms laying off seasoned quants, employers are likely to be more selective in evaluating candidates.
“Still," says Talman, "talent is the driver behind hiring.” He and other recruiters say it's tough to find candidates who have the perfect combination of quantitative skills, experience and the ability to communicate.
Ideal candidates possess strength in math and analytics, but also understand the trading community, Krumm says. Individuals "who can talk to the tech people and understand the limits of technology" have a strong point of differentiation. That, he notes, can drive compensation.
Adds Geiger: "Those who also possess good communication skills can write their own tickets."
 

joe_bradley

Active Member
I can vouch firsthand that at least from my POV, things seem to be quite a bit stronger in Chicago than here. A lot of the openings I came across seem to be there. I will say though, that they are looking for more experienced people. One headhunter I talked to expressed that a lot of the firms are hoping to cash in on instability in the job market by peeling off some good quants from investment banks that are shrinking. That doesn't help those of us that are just entering finance, but it could mean opportunities for someone with just a little experience who is willing to job-hop.
 

Bridgett

Well-Known Member
I wonder how often luck plays a part in things like landing a job...There are always winners and losers in both good and bad situations... I do wonder sometimes what makes the differences at times... Any wise man out there?:cry:
 

pardasani

Well-Known Member
there is a saying from where I come from which goes like "girls and job you get only on luck; if you have your day there is no one who can stop you; and when it's not your day there is nothing anyone can do" (it sounds more poetic in sindhi)


and my personal experience says yeah that's true.... luck luck pure luck....
 

Andy Nguyen

Member
Part of my Asian culture believes in luck. There is a saying "better be lucky than good"
Part of my American lifestyle says luck is superstition. There is a saying "you make your own luck"

So I have a mixed feeling about this. When things are going my way, I want to think because I'm good. When things are going against me, I rather suspect it's just my luck.
As far as job is concerned, I can't really say if it's luck or not but I would rather have all the luck and superstition on my side.
As for my own job searching, I would contribute it to many factors and I wouldn't debate (or complain) if people say luck is a part of it. Meeting the right people, being at the right place the right time do not hurt at all. And most importantly, having the right skills is key.
 

dstefan

Baruch MFE Director
"girls and job you get only on luck; if you have your day there is no one who can stop you; and when it's not your day there is nothing anyone can do"

I would change this slightly: if you have your day there is no one who can stop you; and when it's not your day, then you make it your day and you are back to the first case :)
 

bigbadwolf

Well-Known Member
Part of my Asian culture believes in luck. There is a saying "better be lucky than good"
Part of my American lifestyle says luck is superstition. There is a saying "you make your own luck"

There's an old book out there in the used-book market titled, "How to Attract Good Luck," by A.H.Z. Carr. I have a copy somewhere in my stacks. As I recall, it gives five rules.

I think few will dispute that the well-prepared are in a better situation to exploit the pieces of luck that drift their way -- just like skilled poker players knows how to maximise the value of their good hands and minimise the losses from their bad ones (and how to judiciously bluff). Even in a game of ostensibly pure skill such as chess, luck plays a part. Your tournament result may depend on who you are paired against, how you are feeling, an inadvertent mistake on the part of you opponent, and so on. But a good player knows how to exploit this. More generally, a skilled player of the game of life develops a knack for being in the right place at the right time, knowing the right people, learning the right things. To those less skilled, his success smacks of blind luck -- but they ignore his preparation in allowing him to better exploit random and uncontrollable circumstances.
 

QUANTster

New Member
Developer Jobs in Automated Trading

The job market in US equities and equity derivatives is tight right now. The hotter market is C++ developer jobs in process driven/automated trading.
 

joe_bradley

Active Member
Quanster just confirmed what everyone else has been telling me. Unfortunately, I get the idea that most MFEs (like myself) are less schooled in econometrics, market microstructure and the stuff most automated trading houses care about. One wonders if that particular market would be equally tight if all MFE programs were pumping out graduates that did work in that area.

As far as point Andy made about thinking of his successes as to skill and failures as due to luck, I've also run across the opposite: people also have the tendency to assign the success of others due to luck and failures as entirely due to that person's lack of skill. This attitude is a bit grating if broadcast. I ran across it working in technology. I have worked with three dot-coms; these have paid my bills but none of these have made me a millionaire. I'm completely ok with that, but I've run the odd person here and there who has wondered to me what the issue is, as if this is something I should be embarrassed about. :wall Not a good way to make friends.
 

LTCM

Member
Canadian Banks Are Smaller?

If you like the cold weather, the snow and dresssing like an astronaut (just kidding :D) !!! Why not... ! It is the case for Montreal don't know much about Toronto.
We did hear about some job cuts here in Montreal from Canadian and non-Canadian banks, but not as important as in US banks(Canadian Banks are smaller). Another thing is that bonuses are decreasing this year and some banks did a freeze on 2007 bonuses ...That means no BONUS at all. I would wait for 3 or 4 months to see the full impact of the subprime crisis on Candian Banks.

I don't know where you get your info on Canadian banks being smaller. Maybe you could clarify: smaller than what? And by what measure?

I'd say that opposite is actually true. Because the big 5 Canadian banks are protected by charter legislation they don't face as much competition as they otherwise would and are actually massive.

For example, the market cap of the big 5 (in billions): Royal Bank $64, TD $48, Bank of Nova Scotia $47, CIBC $27, Bank of Montreal $24.

Comparatively, (again in billions): Goldman $70, Lehman $21, Merrill $44, Morgan Stanley $42, UBS $29, Credit Suisse $52, JP Morgan and Chase $42.

As you can see, Royal Bank is bigger than all the big americans except for Goldman, while TD and BNS are each bigger (by market cap) than Lehman, Merrill, MS, and JP
 

doug reich

Some guy
Comparatively, (again in billions): Goldman $70, Lehman $21, Merrill $44, Morgan Stanley $42, UBS $29, Credit Suisse $52, JP Morgan and Chase $42.

As you can see, Royal Bank is bigger than all the big americans except for Goldman, while TD and BNS are each bigger (by market cap) than Lehman, Merrill, MS, and JP

That doesn't sound quite right... I see JPM as $144B. C is $110B.

Point taken, however.
 
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