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GUEST COMMENT: Either it’s the end of capitalism…or it’s August

Now, I know the current “situation” isn’t good but I think the gloom might have got a smidge out of hand. It would seem that if the Fourth Estate is to be believed we are all losing our job in the next sixty seconds and everything except gold, shotgun cartridges and tinned food is going to zero.

Or answer B: it’s August and everyone except a few disgruntled hacks with a paper to get out is on holiday.

That isn’t to make light of what’s been happening. [I won’t call it a crisis as I seem to have lived through enough crises, hundred year floods and black swans to understand how degraded that particular term is…]

Yes, we have structural economic problems. The man at S&P did show “some spine” by finally telling the world that even a economic superpower has to live within its means (or at least not have a built in default mechanism which they need to politically reset every three years). So the USA isn’t AAA; wow, you do surprise me…do we really think it matters a jot?

Europe needs to bite a most unsavoury bullet (especially if you are German) and understand that in a tribe the strongest will need to defend the weakest, if they don’t want them to be picked off by the wolves, thus weakening the whole. Bring on a United States of Europe bond…short that at your peril you Soros wannabes…

On the employment front (this is a careers website after all) do we really believe that even if 50,000 people are lost to financial services in the next five years that they will never find paid employment again? The press would have you believe so, because it makes great copy, but in reality I can’t think of anyone I know who has been fired in the past five years who has been unable to find something either back in the City or (usually at their choice) outside.

The grim reality is that anyone who has survived the rigors of City-life for any period of time will make mincemeat of the average “real-world” job candidate. Jobs come and jobs go but realistically everyone who was “good” enough to get and hold down a City job in the first place will find something to do, albeit not necessarily at the same level as before.

[I’m sure there are tragic exceptions to the above, but as I say, this is my experience]

Are we really surprised to see thin liquidity and crashing markets? Is it the end of capitalism, or is it just August and most of the risk takers are on the beach catching rays?

I suspect the latter. The seasonal effects on markets are well documented (Bouman and Jacobsen 2002) and can be seen as far back as the 17th Century, so why are we surprised when markets have big moves in the summer months?

My suspicion is that things will look a lot better in a few weeks/months. Yes, we may be in a mini-recession and prices (gulp) might go down, but is it the end of the world? I doubt it.

One last prediction. People will lose jobs in 2011; 2012 will be a tough year for the global economy and thus for employees (for that read jobs and bonuses). 2013 will see another hiring boom like we saw in late 09 and 2010 as financial institutions start the whole merry-go-round all over again…just as they ever did.

The writer works in the City and has been watching business cycles and market manias for 25+ years.

Comments (11)

  1. Pretty much spot on…

  2. Good article. Here we go again…

    Product of Linebacker U Reply
  3. ‘Mincemeat out of real world candidates.’

    Demonstrates a lack of intellect as well as a lack of charm.

  4. It is not the city jobs I am worry about but the economy as a whole. Half our youngsters are undereducated yet their expectations are high. Technology is advancing at a tremendous speed and even though there are jobs available, they only goes to the educated foreigners. Any one has any solution to the problems we faces ?

  5. Better education?

    (OK I know that’s a trite answer but actually, is there any alternative in a globally competitive world?)

  6. pls dont panic.

    if worse come to worse pack your bag and off travelling the World… You may even discover that there is an entire universe out there, where people are friendly, girls dont talk about options pricing and you can plan your day as you wish

  7. I’m a 27 year old prop trader from Merrills (BoA), who performed brilliantly throughout my career. I became a prop trader in FICC 3 years ago. Then i got fired along with half the traders on my floor (well, redundant)

    Sure enough I had a tough year last year, breaking even. So i dont expect to be seduced with dollar bills into the highest paying jobs right now.

    BUT. its now been 6 months, and i havent got so much as a call back, let alone an interview.

    my CV is excellent. my interview skills are brilliant (have been offered jobs in ~90% of the jobs ive interviewed for).

    There just havent been any jobs.

    i’ve eaten some humble pie and applied to jobs that are nowhere near trading, at companies that are mediocre at best.

    and still not a single reply, callback, acknowledgement of receiving my email !!!!

    1. there’s hardly any hiring
    2. all the good jobs will be very unlikely to be filled by someone who stinks of redundancy
    3. all the “bad” jobs refuse me because they smell the desperation and think that i will leave in 3 months when i find a “proper” job. which, no matter how i lie about it, of course i would.

    What to do..

    what TO DO

  8. got to be joking. I’ve been looking for 16 months. Ex startup hedge fund analyst, doesn’t come much tougher than that! very little hiring, sell-side want juniors or people who can bring volumes. New career bodes despite fact that my job was harder, and I was better, than the majority of sell-side analysts I spoke to. Its about selling, not about how good you are! that said, most people I spoke to outside the city are impressed by my experience so fairly hopeful. Not some IT gimp job either.

  9. Its all about the sales process in this life. How and to who you sell yourself.

  10. Been made redundant from JPM 10 months ago. I’ve invested most of my time -and energy- in finding a new job, but still no luck at all. One serious interview since then, but as Monkey says, stinking of redundancy doesn’t look great. Savings are coming to an end and desperation is getting close…

    hire me, please Reply
  11. Sorry the ups and downs are so pronounced. People dont know what to do or where to put their money. Its like a chess game of max 1 mil moves and I feel we might be at 999,something

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