The shortening of economic cycles

The United States has been in a period of growth since the second World War. However, after the dot-com bubble and the subprime mortgage crisis, combined with a vastly globalizing economic world, the United States may soon see its economic cycles shorten, and perhaps disappear altogether.

The emergence of the BRIC countries as world superpowers means that United States investments will be funneling towards those countries, and so well the funding from European and other Asian countries. What this will implies is that the US market cannot possibly grow fundamentally much more than it already has.

Most of its markets are completely saturated. The Internet was a major innovation, but unless another such innovation arises that allows for dramatically increased productivity, the United States economic system is not expected to break through its previous highs by much. (If it does, it will be a bubble, I can assure you of that).

Economically, most figures, especially unemployment, have not yet signified a complete return to a bullish economy, and it is my cynical view that it never will return back to its pre-recession levels. Right now unemployment may seem high, but it will eventually become the new norm. Infrastructural inefficiencies in the economy have grown over the years, as technology and the internet has cut down on many jobs previously performed by humans, and furthermore, increasing numbers of job-seekers are targeting a narrowing group of 'desirable' jobs. Meanwhile, highly technical jobs that require years of training and special degrees, are being consistently unfulfilled.

Furthermore, the Millenium generation grew up in a quite different environment than our predecessors. This generation spends less, views debt with distrust, and is much less likely to buy a home or marry.

What this leads to is fewer consumption, less demand within the market for luxury goods, and a slowing of the flow of money. The Baby Boomer generation was quite possibly the most spendthrift generation ever, due to the incredible rates of US growth, followed by the easing of monetary and fiscal policy, essentially allowing the baby boomers to spend in excess.

Therefore, as the baby boomers retire and younger generations become the dominant consumers of society, it is unlikely that the United States growth can outshoot its previous highs.

However, the good news is, the recessions are likely to become more and more bearable as a result. With conservative spending habits and an unlikeliness to take on too much debt, especially for new houses or cars, the next generation of consumers are unlikely to allow companies to expand aggressively and artificially inflate expectations. This means that the possibility of a such a ridiculous bubble as in the subprime mortgage crisis, will be reduced as well.

Therefore, reverting back to my main point, the US economy's business cycle seems likely to shorten in the future, and the amplitude of its oscillations will also decrease. I would make a very wide hypothesis right now and that is, I expect market fluctuations to reach a small, target range, on the Dow from around 11000 to 13000 by 2025, where the market is unlikely to break out of either range, completely smoothing out any market cycles.

How to get a front-office investment bank job

I've always been a big fan of writing. I personally love writing and recently rediscovered my passion for writing short stories and novels. As a composer by hobby, I also enjoy writing music, but that is another subject altogether.

Majoring in Finance, I've been looking for a finance job, since last year. Too bad I haven't really found a good one yet.

The market is especially harsh on people who don't have their act together. As a college student, you must decide by the end of Sophomore year exactly what you want to do. That is a mandatory deadline. Ignore it at your own peril.

By the second semester of your junior year, you must prepare yourself for the onslaught that is summer internship recruiting. Your one goal: Getting front-office internship at an investment bank. Fail this part, and you just made things ten times harder for yourself.

Once you get your summer internship, of course, you can relax. Do a good job, and the chances of you getting a full-time offer is almost 100% for the next year. Believe me. Of course, this is assuming the market doesn't crash and your division gets shut down or whatever.

If you didn't get a great internship, you can kiss your full-time front-office dreams good-bye. During the first semester of senior year, all the big banks come together in September and scour the year's graduating class for full-time analysts.

If your GPA is above a 3.6 and you have some kind of investment bank front office internship experience on your resume, expect to get a LOT of calls. You're going to get interviews left and right, and by the end, you'll have your pick of offers to accept.

On the other hand, if you did not fulfill those requirements, expect to have a long, lonely, and troublesome job-hunting process. You will have to send out 40, 50, 60 applications, before you even get one response. You will have to network like crazy and even then, you'll get shut down left and right.

Believe me when I say, it's not pretty.

Three front-office positions are really the only ones going for - they are Investment Banking, Sales & Trading, and to a lesser extent, Wealth Management. Within each are a variety of analyst positions, related to sales, trading, research, etc.

Choose carefully because you won't get another chance. Banks will shut you down like a nerd on prom night, if you don't know at least which division you want to choose.

Attend as many networking sessions as you can, of course. Be open, be unafraid, be confident, and put yourself out there as much as possible. Develop a thick-skin, barricade yourself with a wall of mental steel, and charge out into the battlefield as if the entire animal kingdom suddenly decided that you were dinner tonight.

Read as many job hunting books as you can and talk to as many people as you can. Ask anyone and everyone you know if they know someone who can refer you to a job. Job-hunting for the hottest entry-level jobs is cutthroat. Either you have it, or you don't.

Even if after all of this, you can't seem to get that job you want, lower your standards. Settle for less. Don't worry, it's not the end of the world. Sure, you're not going to be making 100k on the get-go, but having any job is better than no job.

But if you want to ignore the pain and the shame of this process, stop fooling around and start studying, no matter what position you are. Job-hunting is a lifelong process, and your job-hunt begins the minute you step into this world.

Power Hour

So I have designed a new time management technique - the Power Hour. Here's the deal:

Instead of doing one thing at a time, I break all the things I need to do into many small pieces. So for example, instead of saying, read 50 pages tonight in my textbook, I'll say, read 10 pages this HOUR.

Then I include a bunch of other stuff that I need to get done. For example, the first power hour I had today, I applied to 1 job, studied 2 pages of review for my class, wrote 4 measures of music, sent out sheet music, looked at research on currencies, read a chinese article, and sent a friend a message. True, each individual task was quite easy, but in the end I felt like I got more done during that 1 hour than I sometimes do in one entire day.

So essentially, the whole point of the Power Hour is that it makes you really motivated. You see a list of 7-10 EASY tasks to finish (that you basically told yourself, just do this little, and you'll be good). Note: this time management technique won't exactly help you when you're in the deadline for something big, like a midterm, where you need to really bog down and study for 3-4 hours. But if you instead do a bunch of power hours that include a little bit of studying during the times when you have a lot of free time - they can really add up.

So Power Hours are not just a time-management tool - they're a life-management tool. Instead of trying to fix yourself up with an insane schedule, instead, plan a couple of power-hours per day, and see how that works.

How to keep working

Goodness gracious. First of all - I quit playing games. Forever. I still get tempted everyday, every minute. I watch some game videos online. But no, I'm never letting myself sucked into those games again.

I'm at Maryland right now. Woot. I'm so happy to be seeing my family again, to be in the peaceful state that is Suburban America. Being at home is a fantastic feeling. I never want to go outside again.

So now I have really thought about a few things, but I still have trouble motivating myself, overcoming that laziness. It seems that every time I think of a new thing to do, I have a habit of immediately thinking to myself, I can't do it. Is it a habit?

If so, I need to overcome it. I've always wondered why, after all these years, it was so much easier for me to do those "jobs" on those games, than it was for me to do them in real life. Maybe it's because those jobs are easier. Maybe it's also because using your brain is hard. Maybe it's also because the rewards that you get in those games are much better than just doing a task in real life and seeing no reward (in the short period).

So how do I motivate myself? I know that, this has always been my problem. I feel that if I can motivate myself to do anything at any time that I want to, I will be able to achieve ANYTHING. So why haven't I done this yet? Am I too scared of failure, of using my brain, I mean come on...

Here's to hoping I can overcome this newfound laziness. I feel like it has been something that has contaminated me for all these years, and its aftereffects will be felt long after. In order to fight... I have to really put my mind into it. It's going to be hard.

I wish I had a personal trainer... but I don't. I have to do this myself, I have to overcome all of my fears, by myself.

Let's go.

American soft power?

Yesterday was my performance at the Chinese Students & Scholars Association Lunar Splendor at Skirball Center at NYU. The show went very well. However, I had very long periods of downtime, in which I was able to finish this fascinating book.

It's called Confessions of an Economic Hitman, and it's by John Perkins, a quasi engineering consultant who worked covertly for the NSA (National Security Administration). His job was to go to countries like Ecuador, Indonesia, Saudi Arabia, Panama, Iran, and others, and convince them to take on loans that they could not afford in order to speed up their "modernization"process. The United States and the World Bank would provide these countries with those loans, at first, and then they would feel obligated to return the favor with political benefits (oil grants, trade exclusivity, democratic politics, etc)

Perkins makes the argument that yes, while a lot of these economic deals were struck to keep these countries from communism, they were also done to promote the opportunities of America's "military-industrial" complex, a loose term that refers to the many engineering, construction, and military companies in the US that focus on essentially taking over a country and making them reliant on America.

As a forecaster, Perkins was told to make as optimistic of forecasts as he could, so that the US Treasury would approve, and so that after the two governments met, they would hash out a deal that would often bequeath Perkins' company a lucrative contract. But by doing this, he simultaneously subverted the native population into "modern slavery," which he compares is just as horrifying as the more historical versions.

Why? Because these people have no other options. I was talking to my friend yesterday and she mentioned how these countries, while poor, and knowing that they were getting themselves into a debt that they could not repay, had no other alternative. They HAD to do this in order to get themselves out of poverty. If you try to fight against America, you get labeled a communist, a fascist, a drug dealer, a renegade, etc, etc - and you will be ostracized by the rest of the world at every attempt, suffering from trade embargoes and the threat of potential invasion.

And there are no other economic opportunities for these countries to modernize. But they do it with the understanding that, despite all of America's promises, they will still have large levels of poverty, unrest, a widening rich-poor income gap, and tremendous amounts of debt. They know that in this world if you're against America, you're going to get screwed.

Subway's improving

Over a period of time (within the past 2 years) I had this dislike for Subway and its sandwiches. Maybe it was because of the perceived low quality for it, or because the servers are so rude when giving you food. They will toss food onto your sandwich as if it was the trash pile, and then ask you caustically, "want chips and soda with that?" To which I say no, just a cup for water (cuz I'm cheap) and they would just stay there and glare at me.

But today I went and wow I was impressed. The service was as terrible as usual, but I ordered something I've never ordered before - a footlong Seafood Sensation on their new Flatbread. After adding lettuce, tomato, banana peppers (I'm obsessed with these things), olives, onions, and Chipotle Southwest Sauce (a MUST have for any subway sandwich) I soon bit down into one of the most delicious sandwiches I've ever tasted. The flatbread is an amazing complement to their sandwiches, much better than the other ones. And putting the Seafood Sensation on the 5-dollar footlong is definitely a huge bonus.

Funny enough, there's also a "free lunch" Entourage promotion going on right outside our building. I was tempted to wait there at first (they have some Italian Street Food) but honestly the wait - about 35 people, and the slow service, made it a half-hour wait for some free food that would cost around 5$. Now for someone like me, 5$ is a lot because I don't earn any money. But I still thought, ok, I'm at work, I should focus ON work. Not try and wait for free food.

When I get a real job, of course, I won't care about what I spend on food. I know I won't indulge myself too much, always being frugal, but I will relish the ability to not care if I spend 5 or 7$ on lunch.

Unfortunately, that time does not seem to be coming anytime soon.

Chilling with KTV

I'm at my trading internship right now, and it's pretty funny - our head boss, who's Korean, brought some of his Korean television friends in, and is apparently doing a segment on his company. While I think it's a wonderful idea for publicity, I think it's quite funny that they are doing this segment in the middle of the workday. (Then again, it IS a Friday).

I never imagined that this hedge fund may one day become big, but I sincerely hope it does. The CEO of this company is very nice and has helped me personally many times with my trading. I somehow hope that I can continue trading but unfortunately a series of setbacks have caused me to be less confident than before.

Furthermore, almost everyone from the first class of interns, have left. I'm one of the few left. That makes me kind of depressed - seeing all this new blood, while interesting, also makes me feel old. And a failure, since I didn't really get anywhere except to lose more money.

But what I've decided to do lately was start a new spreadsheet that documents my analysis of each currency, so that I don't forget about it later. Hopefully this will work and help me become more entrenched.