Financial Crisis: As seen from the eye of undergraduate

Everyone is fed up of all this. There are thousands of blogs on the current turmoil, but this post will have the perspective of student looking for a job in finance. So lets see how a student will describe this global recession( ooh i forgot to ask – has it arrived?????)

“Finance” is too scary a word for me now.

Every since I saw an investment banker, I wanted to be like him. Million dollars, sexy cars, girls, beer…. it has everything. I also wanted all this luxury. I didn’t know what banking was all about. All I cared was a penthouse, porsche, best gadget and unlimited credit limit. Frankly, speaking this is all one want. So I thought why not banking. But what is banking? I didn’t know. So what. I can get all the information from Vault, WetFeet.. My seniors got through interviews reading those guides. I got GPA of 3.8. I know I can easily get through.

With all the dreams in my eyes, I enrolled myself into the finance program. Why finance? Because if liberal arts guys can get into banks, I can definitely get in one of the top firm on Wall Street. I still don’t understand why the hell people hire history major in Wall Street.  I recently met a Managing Director of top investment bank whose major is Chinese histroy. He is smart(So am I). He has experience(that I will get with time). It seems to me that I will be better qualified than him after graduation. Wow!!! I can definitely join IB. But what is IB?? I didn’t know.

Things are going on pretty well…. Suddenly, I heard of some weird names- MBS, CDO… What the hell is this? Why do I care about it? I have to goto Investment Bank. I should not be bothered by this ABCD. I want to do Merger & Acquisition. It sounds pretty cool. Yeah…. its very sexy.

In the meantime things started getting bad. Lead by Freddie and Fannie, came the mortgage crisis. It started hurting companies involved in mortgage securities. Billions of dollars flowing out of the market. Investors going crazy. Then came credit crunch – Reduction in availability of loans. US tumbling. Companies writing down millions of dollars. Low profit in Quarterly report. Next quarter prediction of huge losses. Then came the biggest downfall. Bear Stern fallout. Things started worsening even more. Reduction on fed rate posing inflation threat. Fed trying everything to calm the market. Bailout plans within Fed. At the same time many regional banks getting bankrupt. Seeking mercy. IndiMac fallout. Then came one of the biggest shock – government bailout of freddie and fannie. At the same time Lehman bankruptcy. End of wall street. AIG – the biggest insurer fails. Fed takes over. Infuses $80billion. Government planning for $700bn bailout plan. Tax payer money at risk. Fallout of Investment Banking model. Firms running crazy, begging for help. Can it get any worse? Yes. Every bank started falling like a pack of card. Merrly Lynch, Wachovia.. merging with other weak firms. Then came question of recession,Inflation. In the meantime – oil price went above $140 in july to come back at $67 in October. Fear spreads all over. Major indexes dropping. Foreign banks falling, looking for help from government. Fortis bailout. Iceland bankruptcy. Dow Jones dropping 22% in a week; worst performance ever. Technology sector started affecting after hard hit auto sector.

In all this I missed job reduction. At every point- companies reducing their headcount. As of now 110,000 people displaced from their job since last september in finance firm. Particularly in Wall street 10,000 people shown the pink slip.

My dream shattered. No more M&A. No more hot job. I am helpless. I am clueless. I am jobless