Friends Don't Let Geek Friends Work In Finance 732
theodp writes "If Vivek Wadhwa remade Pinocchio, instead of The Coachman luring naughty boys to Pleasure Island to engage in mischievous behavior and be transformed into donkeys, you might find Goldman Sachs CEO Lloyd C. Blankfein luring bright engineering grads to Wall Street to engage in mischievous behavior and be transformed into, well, asses. While the practice of poaching engineering talent slowed after the economy tanked in 2008, Wadhwa is dismayed to report that thanks to hundred-billion-dollar taxpayer bailouts, investment banks have recovered and gone back to their old, greedy ways, snagging engineering grads who might otherwise solve the world's problems, making them financial offers they can't refuse, and morphing them into quants, investment bankers and management consultants. 'Not only are the investment banks siphoning off hundreds of billions of dollars from our economy with financial gimmicks like CDOs,' writes Wadhwa, 'they are using our best engineering graduates [25% of MIT grads in '06] to help them do it. This is the talent that our country has invested so much resource in producing.' He concludes: 'Let's save the world by keeping our engineers out of finance. We need them to, instead, develop new types of medical devices, renewable energy sources, and ways for sustaining the environment and purifying water, and to start companies that help America keep its innovative edge.' Amen, but how 'ya gonna keep 'em down on the Engineering farm after they've seen Wall Street?"
Re:Mama don't..... (Score:5, Informative)
Investment banking is less and less about investment which is good for the economy, and more and more about arbitrage and pumping transactions to make a fee, which siphons capitol off from actual investments.
Awh, you poor little guy (Score:4, Informative)
Upset people hate your guts for ruining the world economy with your greed and stupidity?
And exactly what has goldman sachs financed recently except themselves? VC funding has nothing to do with the likes of you. You are a leech not a true banker.
Re:Two outstanding explanations of what happened: (Score:4, Informative)
One loan application that he acknowledges filling out had true income information from a recent year. For another, in which the income was clearly exaggerated, he claims he did not fill out the application and handwriting evidence may support him.
Moreover the jury found him not guilty of providing false information to the bank, but guilty of mortgage fraud. Huh?
The guy doesn't come off as clean, but it's not clear he should be in jail. It's an astonishing story and worth a read.
Re:Recent financial meltdown. (Score:4, Informative)
Perhaps you speak a different dialect of English to me. From said act, emphasis added: ...encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions. [wikisource.org]
Also: http://en.wikipedia.org/wiki/Community_Reinvestment_Act#Relation_to_2008_financial_crisis [wikipedia.org]
See particularly the mention of commercial real estate, which was never within the scope of the act. I guess all those sources that basically conclude that you, Ron Paul and all your ilk are full of shit are all part of some [insert bogeyman here] conspiracy.
Re:Mama don't..... (Score:5, Informative)
Explain then why it wasn't the "well intentioned" loans that blew up, but the $300K McMansions.
the overwhelming majority of bad, risky loans made during the real estate boom were originated by non-bank mortgage companies. That's right students. Entities not subject in any way, shape or form, to the requirements of the CRA. The problem loans, and the securities attached to them, that fueled the housing crisis. [activerain.com]