Monday, September 15, 2008

I used to work for Lehman

For a little over a decade, I worked on Wall Street, three of those years at Lehman Brothers. It was by far my favorite job, favorite firm, and the most challenging and rewarding portion of my career. Lehman had the best people and the best culture of any firm I worked for or with. We could pretty much hire and fire at will. You were rewarded based on merit rather than under some formula that shared with others. At Lehman it was possible to get a large bonus while another in your group got very little. When I was with Chase Securities (part of Chase Manhattan) the annual refrain was always: "Well bonuses would be larger but we need to pay those guys over there who performed poorly or we will lose them." The irony of the speech apparently lost on the speaker. And if a complete lay-a-bout worked for you, it was almost impossible to fire him.... Jeebus!

I was wooed away by JP Morgan with the promise of a bigger job, a reduction in travel (which I was burning out over, being out of the country more than half the time and living in hotels everwhere from Moscow to Sao Paulo to Tokyo), and (if I took a one-off pay cut) a chance at more money. In spite of strong performance, the money never materialized, the bigger job included some of the most tedious management functions you could ever dream of and while the travel was reduced, I was still on the road a quarter of the time. And I worked for assholes and incompetants. I went from working with some of the best to a hodge-podge of some very good, most quite mediocre, and quite a number of people who should have been thrown out the window.

I missed Lehman and should have taken them up on their offer to come back -- which happened six months after I left and they discovered that I was the one running the team I was on and not my boss, whose managerial skills were worse than an eggplant's. But I had committed to the JP Morgan gig and was still enamored of the big title and the big promises. C'est la vie.

So here's the thing: I am sad about the passing of my old firm, but I am a firm believer in competition, creative destruction, and that our financial system is fundamentally flawed. Only a serious economic and financial crisis will make space for reform or revolution. But that won't happen. The government will merely tighten regulation -- stifling freedom and innovtion -- and will print money to get us out of the problem. There are many ways that could take place and I will write on some of them anon.

But as long as the government does let the markets clear and allows firm to fail, there is hope that we will head in the right direction. I for one doubt they have the stomache for it.

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