I'm not sure how to interpret the record bonuses paid out to investment bankers these weeks. Most journalists, and also quite a few investment bankers I've talked to, take the way things are going well now as proof that things will go badly very soon. I don't know if this is a realistic assessment though. What I observe is that most financial journalists are embarassed they didn't see the tech bubble bust coming in 2000, and now they are predicting a crash just in case one happens - this time they will have predicted it! The only indication I have so far from the ground that things might not go so well is that Bear Stearns has decided not to recruit Summer Associates next summer and has canceled their career presentation at London Business School on short notice. I don't know what the reasons are. I know Goldman plans to hire ~40 summer associates for their London office (IBD and FICC) next summer, so those numbers look good.
So I actually think so many people predict a crash right now mainly to insure themselves against embarassment should a crash occur. In fact, I think we might have plateaued a bit but soon things are going to rise even faster. I think the record bonuses may be a symptom of something very different, not a bubble, but a symptom of how the spread between the stars and the "underperformers" is getting bigger. I'm not talking about investment bankers strictly, it is a common phenomenon that the highest earners in most countries see their income growing disproportionately, while the bottom earners are losing purchasing power as time goes by. Capital is getting more and more concentrated in fewer hands. So in essence, if this is true, it is a great time to become an investment banker. If the world is more and more split into the lucky and the unlucky ones, it matters more and more which side you join.
These are just some thoughts I'm going through, I'm still alert that many insiders are telling me this is not a good time to enter, but in the end I notice among all courses at the MBA and in general my strongest interest lies in finance and economics, so I want to go into that field. As I mentioned in my last post, I have to take some serious career decisions right now. Luckily since classes are over I had a lot of time to think and reflect. The funny thing is, after 4 months of going here and there mentally, I am back to where I started: I definitely want to leave consulting, and the only field that excites me is Global Markets/ Sales & Trading. It is funny how you can get confused and end up at square 1 again, but I guess at least now the decision is more thought through than in the beginning. So milkround is coming up and my plan is to focus only one 4 or 5 banks that have a great programme in markets. January will be busy!