If You Were Me Now, What Would You Do?
A follow-up to this post by Englishman in NJ.
Some posters made some very good points and had some relevant and interesting questions for me. I was actually traveling on business, so I couldn’t reply. I’d like to thank Ben for giving me this opportunity to follow up.
Some were interested/questioning of my role in the ABS/MBS business I alluded to: Fair questions indeed (although DinOR, you make some pretty aggressive assumptions). I’ve been in this business since I came to live in the US in 1992. What I actually do is provide services to support the issuance of MBS/ABS paper. So, we make payments to DTC for investors (or not, as the case may be), send investors reports on the status of their investments, act as the “Trustee” on behalf of the investors to ensure the pool of loans maintains it’s ownership integrity for tax purposes (sometimes called REMICs). I didn’t get into this in my first post because it seems very arcane, but if people would like to know more about how these types of transaction works, including CDO’s, CDO’s Squared and CDO’s cubed (I’m not making this up) let me know.
Anyway, back to DinOR and other commenters about my motivation for posting including my salary. Maybe I shouldn’t have been so granular - I do regret that now, but if you don’t understand how modest $300K is in the financial services business in NYC then you probably shouldn’t feel the need to characterize my motivation to post. The idea that I’m “bragging” about my income is simply laughable. Don’t get me wrong, I’m not complaining about my compensation, far from it, just don’t imagine for one second that I’m impressed by it. By the way, it’s DEFINITELY not MD level, I’m just a Director, a very common corporate title indeed (I have been told it is the second most common corporate title in banking after Vice President)!. Someone asked if that included my bonus, and yes, it does.
I don’t want to get too defensive here simply because I don’t feel defensive anyway. However, let me give you my personal perspective on what I do and how I feel about it:
When I first got into this business it was a very reasonable and respectable business indeed. Some large investors, mainly pension funds and insurance companies, wanted to own real estate assets but didn’t want the hassle of actually owning the properties, so by certificating the ownership though MBS paper could diversify their holdings and not need to build a big infrastructure to support this diversification.
Well, that became completely bastardized over time, didn’t it? So, now we are where we are and how do I feel? To be brutally honest, I feel like I’ve pretty much wasted my career. I wish I could go back in time and do something useful, doctor, vet, some such. I’m not kidding. Many (but absolutely not all) of the investment bankers I work with are tools of the highest order. I knew many IB’ers at Bear and Lehman, and although I felt very sorry for some of the “normal” people working in those shops I certainly didn’t have any sympathy for those pigs. I had a meeting with Goldman, Sachs about re-remics recently and to hear them complaining about government interference in their business made me feel like taking a shower afterwards.
So, where to go from here? I agree, as it turns out I’ve been a part of the problem. But I can’t quit. I have a wife who stays at home with two babies who need medical coverage and someone with a decent income. If I’m laid off I know that it’s very unlikely I’ll ever make anywhere near the money I make here ever again. Yes, it’s taxpayer money. Yes, I’m very lucky how things played out over the past 12 months. Hopefully I’ll continue to be lucky. I take no pleasure in any of this.
What would I like to have seen happen in theory? Institutions that had a failed business model should have been allowed to fail. No taxpayer money should have been given to any company under any circumstances. Many senior officers acted criminally. The CDS debacle at AIG should have been allowed to unwind with complete counterparty default and let the chips fall where they may. Why should a nurse in Peoria give money to Lloyd Blankfein or Vikram Pandit? That is simply inexcusable.
As we know, that is not what happened - and it’s not going to happen. Now we drag this out for decades and my children will suffer enormously for my mistakes. I don’t know all the answers, but if anyone is interested in any stories from the “front lines” of this train wreck, I can contribute.
“rms”, $565K bought me 1,900 square feet. Ranch style built in 1958. About half an acre.
“CentralCoastDude”….. “Even for $300k, I would not live in Jersey.” Nice one, agree really.
Oh, and DinOR, et al, flame away, you can’t make me feel worse than I do. On the other hand, when I get home at night at least I see some kind of personal salvation.
Oh, and one other thing DinOR/DD and others, be constructive….if you were me now, seriously, what would you do?
