CNBC: Saving the World and Wall Street – a discussion with MacAskill and Allen

CNBC interviewOxford graduate student, William MacAskill, wrote a piece in Quartz: To save the world, don’t get a job at a charity; go work on Wall Street. He makes the point that you might be more effective making a ton on money on Wall Street and giving a large chunk of it away rather than becoming just one more person working for a non-profit because charities are labor rich but money poor.Click to turn non annotations with hypothes.isI responded with Don’t come to Wall Street for the money, even if you plan on giving it away, in which I say it is more easily said than done because it is possible to do more harm than all the good you can do if you give it all away.

CNBC called and soon William and I were on the show for one of those 60 second spots with a 30 second commercial in the middle. You can watch it here, although to get a better sense of what we’re trying to say it is better to read the original articles.


To save the world come to Wall Street and save the world from Wall Street

Do you want to be like these people? (Don’t answer that; we’re afraid of your answer.)

(originally published in Quartz on February 28, 2013)

I am a 60-year-old child of the 60’s who never gave up on the idea that I can save the world—even after three decades on Wall Street.

That is why I enjoyed the piece by William MacAskill, To save the world, don’t get a job at a charity; go work on Wall Street.

The problem is that this is more easily said than done. Most people working on Wall Street can make ends meet while a small few can make vastly more money than they need. The trick is to make sure that the process of making money does no harm.

Click to turn non annotations with hypothes.isQuestion: How much money would all the participants in the mortgage securitization industry have to give to charity to undo the harm they have caused?

Answer: More than they have ever made.

The real opportunity to do good on Wall Street is to reform it from within. But to do the right thing you have to be able to recognize the difference between right and wrong, and then you must be able to say “no” when ordered to do the wrong thing.

Here is my advice if you want to come to Wall Street and do good: Continue reading To save the world come to Wall Street and save the world from Wall Street

How to hire good people instead of nice people

Nelson Mandela might have always been a good person, but when he was young there were a lot of white people who didn’t think he was very nice.

(Originally published in Quartz on May 27, 2013)

Usually, employers rapidly scan the resume of each job applicant looking for relevant education, skills, and work experience. They select 10 candidates for telephone calls, invite three in for interviews, and hire the one they like the best.

This is a bad way to hire because at best it gets you nice people.

You don’t need nice people.

You need good people.

Good and nice are not the same thing. The opposite of good is bad. The opposite of nice is unlikable.

Nice people care if you like them; good people care about you. Nice people stretch the truth; good people don’t. If you tell a nice person to do something evil, they might do it because they do not want to upset you; a good person will refuse to do it.

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You might think you are a good person, but you are fallible, so if you want to avoid inadvertently doing something evil you must surround yourself with good people, not nice people.

How do you separate the good from the nice? If you do what I do, it will be a piece of cake. Continue reading How to hire good people instead of nice people

Someone’s gonna get spanked: teaching ethics

gettingspanked(by John Beck, author of Good vs. Good)

When I was in my early 30s with three young kids at home, I renounced my childhood religion—Mormonism. My father tried to talk me out of it by asking how else my children would learn moral behavior. “How will you reinforce what is right and wrong without going to church? I don’t know how I’d have raised you kids without Sunday school and the youth programs.”

I pointed out to him that we both knew good church-going Mormons with a lot of variation in their moral compasses. I particularly focused on a relative of ours who always held top church positions, but who we knew had swindled and cheated his way through life.

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I also told my dad that I believe people learn ethics and how to live their values by example—more so than through any instruction they get in Sunday school or church sermons. What I didn’t say to him, though I was thinking it, was that I had always respected him for his natural honesty. I don’t remember getting a lecture from him on the topic, but I’ve tried to be really truthful my whole life—to be like him.

So when the topic of teaching ethics in business schools arises, I have always demurred Continue reading Someone’s gonna get spanked: teaching ethics

Should caring be part of every job description?

nurse-748186_1280(Originally published in No Shortage of Work)

About a decade ago someone in accounting, or personnel, or wherever, asked me for job titles.

I said, “We don’t have job titles in our group.”

She went away.

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Soon she was back saying that a new policy required that we have job titles, and that I had to give them some.

I said, “I can’t think of any.”

She said, “Make something up.”

I said, “OK, we’re all Senior Executive Vice Presidents.”

She went away.

She was back the following day saying, “Those titles won’t do. Nobody in your group is a vice president, senior, executive, or otherwise. Besides, we need functional titles.”

“As opposed to bullshit ones?” I asked. Continue reading Should caring be part of every job description?

What Not to Do With Your Physics Education

BrownianMotion(originally published in Science on August 3, 2012)

My son went to a good school, studied physics, and did well. Then, after his junior year, he got a glimpse of the life physicists lead and decided it wasn’t for him. He graduated with a physics degree and then asked himself, “Where do I go now?” I was relieved when he informed me he had no interest in going into my field, quantitative finance.

His physics education alone has not equipped him for what he will find in my field. Although he might have had a successful career as measured by income alone, I don’t want him to come home from work conflicted. Because much of modern economics and finance reads like physics, he will be able to read literature that many others cannot—perhaps not his boss, nor his clients. I would be afraid that he might someday build a financial model that blows up his firm or costs a client loads of money. I know he is a good kid, but I think the environment on Wall Street for people like him is bad.

Click to turn non annotations with Continue reading What Not to Do With Your Physics Education

How to raise a child to be an ethical financier (or anything else for that matter)

boy-695825_1280 (1)I think the majority of problems in finance stem not from poorly designed regulations or lax enforcement but rather from bad parenting. I have never been saved from doing the wrong thing because of a regulator or a regulation or a manager or a compliance officer or a lawyer. I have been saved by the imagined voice of my father saying, “I’m ashamed of you.” (And once he was gone, now I imagine my children saying the same thing.)

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What my father said to me, which is the same as what I say to my children

In 1970 before sending me to college, my father said to me: Continue reading How to raise a child to be an ethical financier (or anything else for that matter)

Is “giving back” evidence you took too much in the first place?

X-5SMy father told me to judge people not on how much money they have but on how they make it and what they do with it. My dad was a sculptor who believed in truth and beauty; art was about uncovering the truth and creating beauty.

That is also what scientists do; they uncover the truth and find the most elegant way of expressing it. You can think of Occam’s Razor as an aesthetic litmus test for scientific theories.

But what about business?

Although my dad only ever had formal training as a sculptor, he  had a very successful career arc that took him from fine art to commercial art to advertising to marketing to management consulting.

You can attribute his business success to his belief that business is just another art form, and by that he did not mean that making money was an art. He meant that business was about finding the truth (What do people truly need? What is the state of the art?) and creating beauty (How do we best meet people’s true needs?).

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Running a profitable business simply means that revenues exceed expenses, and that is another way of saying that the art is economically sustainable.

But to manufacture desire where there is no real need; to exploit workers just because you Continue reading Is “giving back” evidence you took too much in the first place?

To save Wall Street, start with better parenting.

From: published in Quartz on April 27, 2014)

This past February, I retired from finance. Although I intend to continue to study the markets and write about them, I have no intention of ever working in the securities industry again. This makes it easy for me to talk to you about what I think is going on and what needs to be done.

I worked at Merrill Lynch as a computer consultant in the mid-1980s, and from 1986 through 1992 I was an employee—first doing research and later creating and running trading desks in New York and Japan. After a brief stint at Credit Suisse First Boston in Tokyo, I returned to the US in 1993 to work as a consultant to a couple of large Wall Street firms. In 1995, I built and ran a statistical arbitrage trading desk for the US branch of a medium-sized Canadian securities firm.

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This February, at the age of 61, I retired from that job of 18 years. I can honestly say my time at that Canadian firm was the best of my entire working career and unlike anything I experienced at any other Wall Street firm. At first I could not put my finger on the difference, but at a Christmas party an elderly co-worker from South America I’ll call Eduardo told me he’d been wondering about the same thing. “I have figured it out,” he said, “The word is ‘decent’ and my theory is that in Canada they raise their children to believe that it is more important to be decent than to be rich.” Continue reading To save Wall Street, start with better parenting.

People who deal with large sums of money should be called “financiers” whether they like it or not.


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Reputation managers, public relations agents, and spinmeisters working their magic on a clueless press and a forgetful populace have re-defined words so frequently that they have lost their meaning.

“Financial engineers” used to be the “rocket scientists on Wall Street” who concocted esoteric “derivatives” but when these products went south they became “innovators” working on “alternative investments” – which were presumably alternatives to the stuff they came up with previously. Eventually the International Association of Financial Engineers changed its name to the International Association of Quantitative Finance with the goal of “advancing the field of quantitative finance.” Presumably, their members who once called themselves “financial engineers” are now “quantitative financiers.” After their next blow-up I wonder what term they will advance the art by calling themselves something else.

“Banker” used to mean someone who took deposits and made loans. There were variants: Retail Bankers, Commercial Bankers, Investment Bankers, Mortgage Bankers, and even Personal Bankers. But there are also speculators and hedge funds operating as banks, and some “bankers” are best described as “bank robbers.”

My favorite is “hedge fund manager.” The reason is that I used to be one, and I got a kick out of how many definitions people could come up with. The only one I’ve found that made any sense was, “A payout schedule in search of a strategy.”

I think everyone who deals with large sums of money be called “financiers” first and foremost. The reason is that it has the broadest possible definition. Continue reading People who deal with large sums of money should be called “financiers” whether they like it or not.

Passion requires that something makes you angry; and what makes me angry is unethical financiers

WomanWithHairAnger is an acid that can do more harm to the vessel in which it is stored than to anything on which it is poured.
– Mark Twain

Whenever I speak at colleges I begin by asking, “Why are you here?”

This catches the students off guard and after batting the question around for a bit someone says, “To find my passion.” The rest agree and they imagine they are done with the topic.

But I am not done with them.

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I ask them to define “passion” because if you cannot say what a word means then you are shooting the shit rather than answering a question.

So they discuss that for a while longer and eventually settle on some variant of, “I don’t know what passion is but I’ll know when I have passion for my work because I won’t have to motivate myself to do it.”

“Really?” I say, “Where I come from we have a word for that, and it is ‘like’ as in ‘I like my job.’ But I know I am passionate when I do something even though I hate every second.”

“Why would anyone do a job they hate?” someone asks. Continue reading Passion requires that something makes you angry; and what makes me angry is unethical financiers