Tuesday, September 16, 2008

Lehman: Going, going, gone

There will be no more bright eyed IIM grads flying to London and New York to do their summers with Lehman Bros.

It's the death of a Dream.
The end of the Formula.

Sure, in time, i-banking may bounce back but right here, right now the idea that clearing one entrance test, followed by two semi-educative years on campus lead you straight into the 'global league' (in terms of greenbucks).

That, for the next couple of batches, is over.
And honestly, I think it's actually a very good thing.

I don't hate i banks or i bankers. But I do have a problem with the fact that these jobs offered so much more money than ANY other sector that even the thinking bschool grad could not help being dazzled. It was like a thousand watt bulb shining in your face -blinding you to all else.

2007 was actually the peak year for the global i-banks, in 2008, they remained strong but consulting and private equity were seen as 'hotter'. One 2008 grad from IIMA who had offers from a global i bank in New York as well as McKinsey chose the latter. Two reasons: I banking he felt was more 'risky' and secondly, he wanted to stay in India.

Here's the sector-wise break up of who got placed where @ IIMA in 2008

That will change because Lehman & ML apart, there are just very few jobs now on offer in the financial sector. Global or otherwise. The regulars will come and pick up a couple of students, just to keep the relationship with the institute. But that will be a light drizzle, not a downpour.

We won't be seeing (I think) any new records being set in terms of dollar-converted-to-rupee salaries (last year's record: Rs 1.44 crores).

We also won't be seeing (I hope) the crazy one-upmanship among the top three IIMS about which one bagged the most PPOs and global ibanking offers.

What will happen? No IIM grad will be wanting for a good job, but there will be no auto-pilot choice. Students will think and choose more carefully.

The traditional recruiters like FMCG marketing (HLL, P & G), Indian companies (TAS, Aditya Birla group) and emerging sectors like retail and telecom will attract more attention and interest.

Consulting and PE of course will be red-hot.

An interesting phenomenon (pointed out by a former i banker friend) is that in the US, whenever there is a slowdown, applications to MBA programs surge. If you're out of a well paid job you may as well go back to school. By the time you graduate, the economy would also have recovered.

In India though, I wonder if all this news may not have the opposite effect. I don't think the aam junta will STOP wanting to do an MBA but we may see the numbers taking the CAT stabilise. Instead of the year on year surge.

Also watch for the hot new trend of i bankers returning home. And when asked "What are your plans"? the response I'm hearing a lot of is "Starting up".

That could be a respectable way of remaining unemployed until the markets correct themselves. Or a case of i bankers who've 'made enough money' deciding to hang up their ties for good.

In which case - welcome to the club!


  1. Don't think that will happen. Retail banks having investment banking divisions like JP Morgan, Barclays, HSBC will become more coveted. Thats about it.

    The number of banking jobs will change but I doubt the focus will change. It is about the Indian mentality, lure for money and probably going outside India. If you have to change something then change that.

    And think about the 1000s of people who got unemployed. Tons of IIM and IIT grads in that. It is a big loss and a very big loss for IIMs.

  2. This comment has been removed by the author.

  3. You have got every fact right in this post - hit the nail on the head.

    I already see the shift in thinking on the IIMA campus already. A lot of people are going to think long and hard about their careers.

    A pre-bankruptcy take on Lehman

  4. The scare is definitely there. The ex-prospective-I bankers at the B schools are definitely going to look at alternative careers.
    My bet is on Consulting being back in flavour big time.
    However, I believe the number of applications could go up here as well. I myself have been asked by some people - "Does it make sense to leave job and do an MBA now, Markets to waise bhi kharaab hain".
    The numbers that could go down is the number of students who wanted to do an International MBA. The cost benefit analysis is surely going to show other pictures now. Already, the average salaries have shown significant impact in international B schools(European B Schools included).

  5. I think fot the time being(1-2 yrs),the i-bankers will try other options, but all said and done, if a 158 year i-bank could vanish in a yr or so, then an multi billion dollar i-bank couls be made when the economy is in upswing.
    @shubham: what's wrong with the Indian mentality of earning money,aspiring for cleaner air,better lifestyle.If we can get these things in our country no one would want to go outside.

  6. point well taken, rashmi. speaking as a b-school prof at a top US school, i'd like to add one more point. i think graduating mba students from top indian schools (as well as the newly returning lehman type crowd) should think very hard about phds in business. the numbers of indian applicants to top phd programs has fallen off sharply in the last ten years, and academia, as you allude, is an industry that does very well on the countercycle.

    - long-time lurker who enjoys your blog.

  7. A typical rashmi bansal blog....just flowing with the stream. Why cant you think something of your own

  8. RB, your writing makes light reading and i like it.. however, this article is so superficial (and plainly wrong at many places) that i actually think it doesnt belong to your repertoire (or maybe it belongs to show how you should not analyze :)).. so with that rabid criticism off the way, here are a few core things that you TOTALLY missed..

    1. the model of I Banks vs retail / corporate bank is based on funding type. I Banks are funded by hot money and their leverage ratios are astronomical

    2. I banks have always been way too riskier than retail banks due to the funding model. govt doesnt regulate them like retail banks as millions of consumers are not directly involved

    3. the party went on for last 20 yrs or so because all factors (declining asset value, tightening liquidity, economic slowdown etc) didnt converge at once.. now they did and the whole I banking model is gone (GS, MS have become normal banks accepting federal regulations. others have vanished)

    all of these are well-documented. wonder why you didnt research at all

    so takeaways:

    1. IIM Grad running after the I banks either understood the risk - reward ratio OR they used hope as their strategy (meaning losers)

    2. Best learning is through experience. now the new batches will be careful (and tone down the rhetoric that almost everyone knows is false)

    3. the gruesome filthy propaganda in placement season actually shows that institutes dont have a clue (in general) about global finance work and how their students were exposed..

    overall I banking as you have known is dead.. so your starting sentence (it will be back) is baffling.. hope sanity prevails..

    and i sincerely wish you (as a learned individual) do not add noise in the system with your opinions that evidently are based on limited research.. (sorry again)

  9. People read your blog but only few really understood the purpose behind it.For me,You push for creativeness and entrepreneurship,still mostly disagree,few agree and fewest try to walk down on least walked path.But it is really good blog for regular reading..

  10. I banking attracted some of the best talent from the premier institutes and were paid bags of money to manage somebody else's money.

    And now we see what happens ... so much for being the brightest of the lot.

  11. 明星代言 明星经纪公司
    制动单元 铝壳电阻
    modern abstract art sofa manufacturer
    净水器 开水器 净水机 净水 软水机 软水 直饮机 家用净水 家用净水器 家用净水机 中央净水 中央净水器 水家装 水家电 水卫士 混合机
    过滤机 DHL快递 俄罗斯签证 回转支承 Laser marking
    保险箱 法兰 法兰标准
    polycarbonate sheet 回流焊 波峰焊
    压球机 注册上海公司 儿童摄影
    牛皮癣 皮肤病 制氮机
    食堂售餐机 校园一卡通
    学校一卡通 ic卡售饭机
    食堂售饭机 深圳一卡通
    广东售饭机 机电设备安装
    北京发票 代开发票
    餐饮发票 住宿发票
    网络电话 免费网络电话
    假发 补发
    织发 植发
    压滤机 板框压滤机
    蒸馏水机 纯蒸气发生器
    上海搬家公司 上海搬场公司
    大众搬家 大众搬场
    张家界旅游 香港旅游
    深圳旅行社 打包机
    收缩机 对讲机 电源模块
    售饭机 水控机 水控器
    萎缩性胃炎 neoprene laptop bags
    SEO优化 计量泵
    胃炎 胃病
    冷水机 冰水机
    北京特价机票 北京打折计票 北京国际机票
    北京机票预定 北京飞机票
    北京订机票 北京机票查询 饮料机械
    银杏 水培花卉 企业宣传片 空分设备
    化工泵 离心机
    电话交换机 程控交换机 集团电话 集装袋
    混合机 混合机
    混合机捏合机 捏合机
    捏合机导热油炉 导热油炉
    导热油炉 反应釜 反应釜
    反应釜 spherical roller bearing
    搬运车 搬运车 电动搬运车 油桶搬运车 堆高车 电动堆高车 半电动堆高车 堆垛车
    高空作业平台车 电动叉车 平衡重叉车 前移叉车 电瓶叉车
    韩国饰品批发 模块电源
    X架 超薄灯箱> 易拉宝 展柜制作
    代理服务器 游戏加速器 网络加速器
    网通加速器 电信加速器 电信网通转换器
    电信网通加速器 网通电信互转
    网通电信互通 网络游戏加速器
    美国VPN代理 美国独享VPN 美国独享IP
    pvc ceiling panel Spherical roller bearings
    安全鞋 劳保鞋 防砸鞋 电绝缘鞋 上海安全鞋 上海劳保鞋 江苏劳保鞋
    服装软件 服装管理软件 进销存软件
    进销存管理软件 服装管理系统 服装进销存软件
    进销存系统 进销存管理系统 免费进销存软件
    吉林中医 东北特产
    阳痿 阴茎短小 阴茎增大
    早泄 前列腺炎 阴茎增粗 阴茎延长
    国际机票 上海国际机票
    国际特价机票 国际打折机票
    砂磨机 砂磨机
    砂磨机 卧式砂磨机
    卧式砂磨机 卧式砂磨机
    三辊研磨机 三辊研磨机
    三辊研磨机 混合机 混合机
    混合机 锥形混合机 锥形混合机 锥形混合机 行星动力混合机 行星动力混合机 行星动力混合机 无重力混合机 无重力混合机 无重力混合机
    干粉砂浆设备 干粉砂浆设备
    干粉砂浆设备 捏合机 捏合机 捏合机 导热油炉 导热油炉 导热油炉 反应釜 反应釜 反应釜 搪玻璃反应釜 搪玻璃反应釜 搪玻璃反应釜
    乳化机 涂料设备 干混砂浆设备 无重力混合机 胶体磨 涂料成套设备 双螺旋混合机
    北京婚庆 北京婚庆公司
    办证 呼吸机 制氧机
    亚都 亚都加湿器 亚都净化器
    饰品批发 小饰品批发 韩国饰品 韩国饰品批发 premature ejaculation penis enlargement
    安利产品 马来西亚留学
    网站优化 网站推广
    论文代写 代写论文
    拖链 防护罩 排屑机 塑料拖链 钢铝拖链
    深圳装饰 深圳装饰公司 深圳装修公司
    特价机票 打折机票 国际机票
    新风换气机 换气机 立式新风换气机 风机箱 新风系统 能量回收机
    搅拌机 混合机 乳化机
    毛刷 毛刷辊 工业毛刷 刷子 钢丝刷
    涂层测厚仪 硬度计
    兆欧表 激光测距仪
    测振仪 转速表
    温湿度计 风速仪
    噪音计 红外测温仪
    硬度计 万用表
    美容院 美容加盟
    澳洲留学 澳大利亚留学
    酒店预定 北京酒店预定 北京酒店
    nail equipment nail products nail product nail uv lamp nail uv lamp nail uv lamps uv nail lamp nail brush
    nail file nail tool nail tip nail gel curing uv lamps lights
    万用表 风速仪
    红外测温仪 噪音计
    苗木价格 苗木信息 标牌制作 深圳标牌 北京儿童摄影 防静电鞋 淘宝刷信誉
    威海凤凰湖 威海海景房 大庆密封件
    打标机 淘宝刷信誉 TESOL/TEFL国际英语教师证书 英语教师进修及培训 北京快递公司 北京国际快递

  12. 导热油炉吴桥县导热油炉锅有限责任公司是全国最大的生产导热油炉生产基地之一,公司主要生产各种导热油炉锅,熔盐炉, 转盘轴承,管式加热炉,蒸汽发生器,一二类压力容器.徐州回转支承 公司提供转盘轴承 --slewing ring slewing bearing slewing bearings服务. automation-industrial-industrial automation-slewing bearingslewing bearings

  13. A片,A片,成人網站,成人漫畫,色情,情色網,情色,AV,AV女優,成人影城,成人,色情A片,日本AV,免費成人影片,成人影片,SEX,免費A片,A片下載,免費A片下載,做愛,情色A片,色情影片,H漫,A漫,18成人







Disqus for Youth Curry - Insight on Indian Youth