Archive for the ‘Economy’ Category

Firestorm on Wall Street

Monday, May 24th, 2010

“Firestorm on Wall Street” was the title of the second program in the “More than Money:  An Interview Series with Myron Kandel.”  Since the founding financial editor and economic commentator for over 25 years at CNN had stellar guests previously—Steve Forbes, Editor in Chief of Forbes Magazine; and Joseph Stiglitz, an economist, professor at Columbia University, and winner of the Nobel Memorial Prize in Economics (2001)—I knew that I didn’t want to miss this event.

After a brief overview of his program, Kandel introduced William D. Cohan, author of House of Cards:  A Tale of Hubris and Wretched Excess on Wall Street and a contributing writer for Fortune magazine; and Gregory Zukerman,  The Wall Street Journal reporter who writes the paper’s column “Heard on the Street” and author of The Greatest Trade Ever:  The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History.

Offering the background to the headlines, Kandel’s guests shared stories of the executives who individually and collectively ignored the indicators of a financial crisis.  According to his publisher Random House, Cohan’s book on Bear Stearns is “A blistering narrative account of the negligence and greed that pushed all of Wall Street into chaos and the country into a financial crisis.”  Zuckerman described in some detail how the risk-taking Paulson sought out and then earned billions by betting on the housing collapse others—including mortgage, real estate, and investing experts—had missed.  Since Paulson had created a market for his product by using Goldman Sachs as a salesman, the two brilliant business writers weighed in on the government investigation of Goldman.

Wikipedia’s definition of a firestorm “is a conflagration which attains such intensity that it creates and sustains its own wind system.  It is most commonly a natural phenomenon, created during some of the largest bushfires, forest fires, and wildfires….Firestorms can also be deliberate effects of targeted explosives.”  A conflagration is defined as “an uncontrolled burning that threatens human life, health, property or ecology.  A conflagration can be accidentally or intentionally created (arson).”  Kandel’s choice of the word firestorm for his event seems very appropriate.

The reason I attended the program was to further my education on the culture of Wall Street, and especially, to hear Cohan speak.  His previous book, The Last Tycoons: the Secret History of Lazard Frères & Co., spins “A tale of restrained ambition, billion-dollar fortunes, Byzantine power struggles, and hidden scandal.”  Cohan’s employment as a vice president at one of the world’s preeminent financial advisory and asset management firms coincided with mine.  However, he was involved in the business transactions while I was on the sidelines watching the action from my position as a temporary secretary.  In my over five years at the firm, I worked with a majority of partners, numerous vice presidents, and many other bankers.

When Zuckerman mentioned that Paulson’s analyst in creating his deals was Paolo Pellegrini, my ears perked up since he, too, was a former Lazard banker.  However, unlike Cohan who moved from Lazard to be a managing director of telecom mergers and acquisitions at JPMorgan Chase, Pellegrini according to Zuckerman in an article (“Profiting from the Crash,” WSJ, 10/31/09) had “a career of disappointments” and that “Paulson & Co. likely was his last stop on Wall Street.”  The disappointed analyst earned an estimated $45 million in his first year at his “last stop.”

What I took away from hearing the stories and learning more about Wall Street’s demeanor and greed was nothing new.  It was the same old story:  the behavior on Wall Street won’t change.

Specifically, words that I recorded in my notebook in the darkened auditorium include these thoughts from Cohan on proposed government regulation of Wall Street: “Wall Street buys the sort of regulation they want” … “Their actions are just smart enough not to go over the edge” … “We haven’t changed how Wall Street behaves not even in a small way” … “Goldman people don’t feel comfortable voicing dissent.” … “Nobody is blowing the whistle.”

Cohan made a very interesting statement: “There is no memory on Wall St.”  The younger people on Wall Street make decisions not knowing the history of the previous crisis—like the Internet IPOs in the late 90’s or the housing downturn in the early 90’s—and don’t take time to reflect on the consequences of their behaviors.  Instead, it seems clear, Wall Street moves from one crisis to another, like an addict who seems incapable of staying away from drink, drugs, or other substances to get a high, all the while knowing but not accepting that a big downer follows.  Rather, the user, when he needs it, seeks out another source to get high.

Zuckerman stated that, “We need the best and the brightest to be in financial services.”  To me, that seemed to affirm that what was going on within Wall Street firms was okay.  And that the results, although possibly catastrophic for the majority of America and a good part of the globe, are what matters.  It matters to those who profit from the results.  Do bankers stop to think about those who are negatively impacted by the results?

Last year, I wrote a special report entitled, “Temping with Tycoons:  Lessons from My Leadership Reinvention” —an account of what I learned at Lazard about the firm’s culture, group behavior, and individual actions. Documenting what I observed and reading about the firm, I used Lazard as the business school I could afford.  And it was during those years experiencing the hubris of bankers, the carelessness of analysts, and their overall ignorance of the real world that inspired me to teach future leaders about the human side of business.  “Temping with Tycoons” is required reading at the beginning of “A Management Approach to Organizational Behavior,” a course I teach to undergraduates at the Zicklin School of Business within Baruch College, the nation’s most ethnically diverse campus.  Primarily working class and first generation, the students are able to learn about some behaviors on Wall Street. They are also often aghast and angry at what they read.

One of my students put it very simply, “Why is there such a divide?”

I don’t know exactly.  Future posts will include notes from “M.B.A. Under Siege:  Reimagining Management Education,” an all-day conference held at Fordham University where business school educators from as far away as Kazakhstan in Eurasia listened to presentations from highly regarded business school professors and participated in discussions.  Especially of interest was the role that management—or lack of it—played in the collapse of the global economy.  Watch this space for more information on the culture and management of Wall Street.

It’s Not Over! Ways Older Workers Can Stay Relevant

Wednesday, March 24th, 2010

It is truly an honor to be able to be part of programs targeted to audiences that span the career cycle.  Last week, I moderated a panel during the “Pearls of Wisdom” Women in Business Conference at Baruch College where I teach.  On Tuesday, March 23, I moderated a panel of outstanding women in their fields for the Employee Assistance Professional Association (EAPA)-NYC monthly meeting.  Since March is Women’s History Month, the EAPA-Women’s Issues Committee is invited to develop the program and take center stage.  Lynda Johnson, my Co-Chair of the Committee, and I came up with the topic, “It’s Not Over Yet!  You Still Have a Chance:  Resilience and Reinvention in the Older Worker.”

The panelists addressed how to remain relevant, successful, and satisfied in an evolving career; investments in nips and tucks to stay looking young; and the legal implications of aging in the workplace.  And we had just the right professionals  on our panel to talk about these topics:  Jane Cranston, Managing Director, Executive Coach NY and Great Job in Tough Times; Wendy Lewis, President, Wendy Lewis & Co., a global aesthetics consultant who is popularly known in the media at “The Knife Coach” and is founder of a the popular website called BeautyintheBag.com; and Doris Traub, of Traub & Traub PC, Esquire, who has devoted her thirty-year career as a lawyer to advocating on behalf of employees who have faced workplace discrimination.

Leigh, Wendy Lewis, Jane Cranston, Doris Traub, Lynda Johnson

Leigh, Wendy Lewis, Jane Cranston, Doris Traub, Lynda Johnson

Before asking questions, I offered some background information on the need for this program.  As an Adjunct Lecturer in the Management Department at the Zicklin School of Business and an older worker, I am able to take the pulse of different groups and serve as a bridge to communicate effectively across the ages.   My “Pearls of Wisdom” to the group of around 40—only one woman was in her 20’s and one in her 30’s— served as a good introduction.

1.  Be Precise with Terminology:  This semester, one of my students wrote a paper on “The Elderly in the Workplace.”  Yipes!  Was my first reaction.  Wasn’t he in class the evening I gave “the lecture” that the term to use is “older” not ”elderly.”   The first request I had of Doris was to define the difference between “elderly” and “older.”  She was very definite in stating that the term elderly is not appropriate for any workplace, that the connotations are negative, and that the assumptions that go along with the word elderly are possibly discriminatory.   Jane gave a wonderful example of a woman who sought out her coaching services.  Her client was 80-years-old and wanted help to define her next career.  Some might call this woman “elderly.”  I’d call her resilient and resourceful.

2.  Understand the Statistics:  There has been a 134 percent increase in the number of workers over the age of 55 who are looking for work since December 2007.  Today, about 7% are over 55 and working.  Over 20% of the workforce is expected to be 55 and over by the year 2015.  Older workers want and, in many cases, need to work since many of their retirement investments disappeared during the worst economy since the Great Depression.   Workers 40 and older (even younger ones) are seeking some form of image enhancement to keep a youthful appearance.  Wendy said that though her business slacked off last year, she is doing better in 2010 in part because of the men who were formerly on Wall St.  Now looking for work, they want to look and feel younger to compete for positions that they used to have in the financial services industry.  The most popular enhancement for both women and men is to get rid of crows feet around the eyes.

3.  Performance Perception:  The number one consistent complaint I hear from my 20 something students is that the older worker is resistant to change.  And that they are reluctant and outright refuse to learn how to use computer programs.  In some cultures, older men and women are seen as wise because of their age.  In our culture, wisdom is to be acquired by learning how to navigate a keyboard to help them  send e-mails and manipulate databases.  Wendy is very well connected on LinkedIn, Facebook, etc. and Jane is a great example of someone who knew that technology was part of building her business and has successfully taught herself.

After the program, one of the attendees came up and told me it was an excellent panel.  In fact, she told a lot of people she was so inspired to be, at 69, opened up to growing in new ways.  She wrote on her evaluation that she would no longer refer to herself as “this old gal” and that she would push herself to ask for and get training on the computer. 

Staying relevant and open to growth, it’s definitely not over for those 40…50…60…70…80!