Jul 032005

Dear Resentful Intellectual,

Some time ago a few of you complained about the filthy lucre that “Chet” was raking in. “Chet” is supposed to be the prototypical Wall Street guy — tall, handsome, personable, eerily well-adjusted, everything but clever. Of course what you really want to know is not why Chet makes so much money, but why he makes so much more money than you do.

Chet does exist. I’ve worked in finance (the software end), and I’ve met Chet. But I’ve also met any number of brilliant people, as intellectual as you please, and Chet usually works for them instead of the other way around. Of the dozen most intelligent people I have ever known, half of them have spent some time on Wall Street. Is George Soros a Chet? Is Taleb? Is Derman? Brad DeLong, after supplying several more examples of non-Chets on Wall Street, explains matters politely:

Part of the answer is that [Chets] are sitting at a nexus: a huge amount of money blows past Wall Street, and if you can sit in the right place with a large net, unbelievable quantities of money will be trapped by it.

A bigger part of this answer is that there are four relevant human capabilities here: the ability to master details, the ability to quickly grasp what the salient issues are and follow them through to their conclusion, the ability to work like a dog, and the ability to size up people — figure out quickly who will actually produce something useful and who will not, who will hang tough and who will easily bid more, who will soften if wooed and who will stay hard-nosed. Next to nobody has all four or even three of these capabilities in world-class measure. Fewer people than you think have even two. And for someone who has one of the other three — mastery of detail or skill at analysis or the ability to work like a dog for ungodly periods of time — mastery of Chet-hood is a very valuable and lucrative skill.

I will put it less politely: Chet makes a lot more money than you because Chet is worth a lot more money than you. Chet the i-banker regularly spends his weekends drafting prospectuses; Chet the bond salesman often arrives at his office at 3 or 4 AM to trade the foreign markets. What time do you start work? Chet can probably do bond math and explain Black-Scholes. Can you? You have opinions on Wittgenstein, which Chet lacks; are you quite sure the opinions are worth having? Chet is not brilliant, to be sure; neither are you. Brilliant people produce brilliant work. Where’s yours?

The kernel of truth in your complaints is that the regulatory-cash complex protects the incomes of Wall Street, and Chet profits from this. But Chet decided early on that he wanted to trap money with a large net. He majored in economics and went to business school while you were dicking around with philosophy and Russian literature. While you sneered at all of your classmates who wanted to be doctors, lawyers, or investment bankers, Chet signed up for his interview with Morgan Stanley. He may be a welfare queen, and it is irritating that he will rarely recognize the fact; on the other hand, you likely work in academia, which is no stranger to tax dollars. You also, unlike Chet, frequently agitate for still larger subsidies, which annoys Chet as much as he annoys you, although he, unlike you, is probably too tactful to say so.

Yes, the world is full of rank injustices. No, your modest salary is not among them.


  16 Responses to “Where’s My Fucking Bonus?”

  1. Aaron,

    What is missing, or at best tacitly argued, is that Chet is somehow inauthentic, and that there is something wrong with that, and therefore by extension, Chetdom.

    It is sadly, all too common, to confuse the merits of authenticity in one’s personal life, with the value of it in one’s professional life.

    Authenticity, fairness, compassion, humility, and love, all have the potential to make us feel good about ourselves, but are not always adaptive or even necessary for success (read, survival in a system).

    Rather, charm, guile, tenacity, and even ruthlessness are the kinds of adaptive skills and behaviors needed for the acquisition and maximization of scarce or coveted resources.

    And as the comments there point out, Chet is highly networked within the resource-rich Chet community.

    Chet and Chetdom are emblematic of a succesful emergent system and complexity.

    And yes, Chet makes a lot of money because that is what he is there to do. Gone is the ambivalence and all other inertia or limiting force which would limit Chet’s ability to do so.

    Chet gets paid money because he makes money for Chetdom.

    Chet is because Chet begets Chet.

    Per Waldrop, He who has gets.

    Or in this case, He who has Chets.

    I understand this now.

    More so, than ever.

  2. To those who choose to denigrate the accomplishments of "Chet’ you need to get another way to keep score.

    This is analogous to those who besmirched the accomplishments of Barry Crane because he won all his points at match points.

    Somehow by lessening the accomplishments of others there are those who feel fulfilled.

  3. Soros, Taleb, et.al. are traders; Chet is an investment banker, a different breed entirely.

    I knew a good many traders in my dozen years on Wall St., some of whom made more than ten times my own considerable compensation, and I wouldnt have traded places with any of them. I would have loved the money, but the risk would have killed me. I started with Morgan Stanley as a programmer in a thirty-person black box equities trading group. Six years later the only ones left were three of us programmers and one trader who was allowed to cop out to human resources. All the rest, including the managing director in charge, had been fired for losing money. Although entire investment banking departments have been eliminated, the individual bankers usually face no such risk. I havent known many investment bankers well, so I cant comment on the accuracy of the Chet stereotype, but dont confuse them with traders.

  4. What happened to Tommy-boy comment? Did he sobered up, washed his face and erased his brilliant thoughts re: nothing in particular?

  5. My comments were distracting. I was reacting to his point of "where are your brilliant works". But I always do something inadequate in one way or another re:

    Aaron, write a blog about Bush and Soros please! I’ll send you fifty dollars in the mail sprayed in the musk of the world’s last remaning Unicorn I have stapled to my shed where I keep it wrapped in the shredded skin of Hu Toxotol, the Olmec Panther Snake God of the Earth.

    Or not.

  6. Jack Whelch of GE had a lot to say about investment bankers. Also, the guys who skim off the profits in a merger, you know, and then get even more when the merger fails and companies start selling off. What are they called again?

    I am almost certain they are not called musicians.

  7. I work in finance, myself, and I see lots of these "Chets," as you call them. They’re generally bland guys who are pretty personable, and probably don’t have any PhDs in Russian literature or comparative philology. Chances are they’re up on who’s who in the business world and know a naked option from a covered put. And yes, they’re usually loaded.

    Me, I’m a smart guy. I’m an artist. And I’m smart enough to be able to do what these guys do. I work on the marketing end of finance, at a brokerage, and talk to brokers every day, and I’m sure I’m smart enough to do their jobs and pull down all that scratch.

    So why don’t I? Yeah, I’d hate to have a job like theirs, sure, but the deeper reason is that it takes stones to be a broker; it takes a cast-iron stomach, which I don’t have. These people typically have millions of other people’s dollars in their hands, and they make decisions every day that could make or break these people’s livelihoodsnot to mention their own.

    It takes a certain kind of person to make a fortune, and it takes another certain kind of person to manage one. I may yet prove to be a fortune-maker, but a fortune-manager I am not. These guys, these "Chets," are just doing what they’re really good at, and it just happens to pay off big. I hope to find myself in a similar situation, but the fact is that doing what I’m good at isn’t too likely to make a person rich. Despite my money troubles, I’m not going to begrudge those who happen to be able to have found their own centers and who happen to have gotten rich finding them.

    That said, there are clods and parasites among these rich folks. Talk is that full-service brokerages are planning on tacking on supplemental fees to their credit cards for currency conversion on international transactions. The rationale? "Well, everyone else is planning on doing it, and it’s going to increase our revenue." The cost of conversion is borne of the credit card companies and not the brokerages (and, soon to follow, the investment banks.) This is just a parasitic fee, and they’ve got no damn business charging it. I had nothing to do with this course of action, but I did put this to the person who came up with a proposal in favor of it at a meeting this morning, and… well, it’s just about time to find a new job, anyway. (I don’t believe in usuary. So sue me.)

    If you’re an impoverished comparative literature professor, be happy with that. Learn to live within your means, or figure out how to write a trashy best-seller and get rich. Otherwise, you’re already doing what you’re really good at and following your own bliss, so don’t screw it up for something as uninteresting as money. The point of the Adam and Eve parable wasn’t to explain how the world got created, but rather to tell us that if you’re in a situation that suits you already, don’t screw it up. This is the word of the Lord. Or a bunch of ancient Akkadian nomads. Whatever.

    Don’t get me wrong: I still believe in progressive taxation and well-funded social programs. No point in punishing the poor for being poor, nor is there a point to eroding the middle class. And I’m not going to use your term "Chet," because my dad’s name is Chet, and he really doesn’t fit the mold of any kind of finance guy at all. Pardon my petulence.

    But those brokersman, they do work I and lots of other smart, competent people will never have the cojones to.

  8. I’ve worked in a few trading rooms between 1990 and 2000, in both London and Berlin. Many of the people I have met who might be labelled with the "Chet" soubriquet are ambitious, young and bright. For a while, I was one of them. Banking was for me however, ultimately tedious, regardless of how much money there was for the taking. What is missing in the World of the average Chet is intellectual stimulation and variety : on the other hand, turmoil and stress are de rigeur. Some people thrive on this, and are rewarded well for it. Myself, I enjoy stress and turmoil : it was the boredom which got me in the end.

  9. I have always been fascinated by finance and can certainly explain Black-Scholes but I’m not really interested in Wall Street for the simple reason that nothing is produced.

    Investment is a good thing, particularly at the private-equity level and allows new businesses to start. However, the secondary markets are a big gambling arena.

    The only reason Wall Street players are not in a zero-sum game is that there is an entire industry devoted to convincing you that stocks always go up and you’re an idiot to not be in the stockmarket. And also, you’d better use a full-service broker for their "great advice" or whatever it is you’re supposed to get.

    Chet is wealthy because he keeps convincing you to give his product-less industry money. Same as Vegas. And as long as the people keep buying it, he deserves it. Mine is not to question the invisible hand, but to at least make sure my contribution is minimal by only paying $1 per trade 🙂

  10. All I’m sayin’ is one day the T.V.’s gonna wear off and these obscene affluents had better sweat. (If I have to hear one more rich guy talk about his plane…) Sure, Ike coulda had it, but he chose to redeem his soul, and left that pesky devil at the old crossroads.

    As I like to tell the kids, there are two kinds of Republicans: those that need to euthanized, and those that need to be dragged from their mansions and shot.

    Republicans are not inhuman, its just that they just confuse their values for actual morals. -Ike

  11. Assuming that Republicans do in fact confuse their values for morals, how does that differentiate them from Democrats, or for that matter from human beings? When you "redeemed your soul" through poverty, what did you use for morals, if not your own values?

    If we’re going to shoot everyone who attempts to generalize his own values, I volunteer to be the first up against the wall.

  12. Well, I can’t say I’d advocate lining the Republicans up against the wall and shooting them. Sure, they’re as morally bankrupt as the Democrats are organizationally bankrupt, but I wouldn’t say this is forever.

    The Republican Party lost its soul in Watergate. If Nixon hadn’t utterly wrecked the party’s credibility, they would never have had to reach out so strongly to the lowest common denominator, paving the way for dangerously simplistic leaders like Reagan, Lott, Santorum, Gingrich, Hastert and Bush Junior. Before Watergate, the Republican Party had the confidence of plenty of moderate Americans. After Watergate, they connected with the previously disenfranchised evangelicals and John Birch types. It was either that or death for the party.

    The Democratic Party has never had a similar option. There’s no nutjob left in the way that there’s a nutjob right. The passions of America’s left don’t run as high as those of the right, and the numbers of America’s left certainly aren’t as high as those of the right. This is something that those who like to pretend to be above America’s political discourse don’t like to acknowledge; it’s easier to say you’re better than all that if the two sides are equally powerful and completely deadlocked. Anyone who picks up a newspaper now and then and reads more than the sports, comics, gossip and the Michael Jackson trial knows that this is not the case.

    As a Democrat, my values are fair taxes, freedom of expression, freedom of (and from) religion, secular education, affordable health care and reasonable environmental regulation, to name just a few. And considering my values are founded on my belief that we need to keep this country and this planet a nice place to live for those who currently occupy it and those who will occupy it in the future, which is a moral position, then I’d say my values and morals are pretty much the same thing.

  13. David –

    You do realize how your message comes across, don’t you?


  14. Um… it comes across in the Verdana font, just like every other message on this page, doesn’t it?

    What on earth are you talking about, Red? Complete sentences and fully formed thoughts only, please.

  15. David,

    With all due respect, WTF?

    John Birch?

    You’re joking, right?

    Anyway, here is something that goes a long way, I think, in explaining some of the principles of simpletons like Reagan.

    You know, before all the shooting begins.


  16. […] three years ago, Aaron Haspel presented a spirited defense of the “prototypical Wall Street guy,” to whom he affixed the name […]

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