Abandon Wall Street dreams? Not just yet.

With the recent collapse of major banking firms, recruiters disappearing from the Yale campus and the threat of more bankruptcies looming on the horizon, job prospects are looking grim for those Elis planning to enter finance.

But it could be worse. All of this could have happened a few weeks from now.

Students once bound for Wall Street are now considering business school, increasing SOM applications.
Daniel Carvalho
Students once bound for Wall Street are now considering business school, increasing SOM applications.

Instead, Yalies are taking advantage of the timing of the collapse — still early in the recruiting season — to seek out post-graduation alternatives, including professional school. At the same time, an unlikely undercurrent of optimism among administrators, students and employers is inspiring hope that banking may still be a viable option.

A detour from Wall Street

In the face of an uncertain economic future, some Yalies said they are seeking alternatives to the finance jobs they once coveted. One Pierson senior, who interned at the investment bank Lehman Brothers this past summer, said students may now be more open to applying to law school and business school. He asked to remain anonymous so he could speak freely about the job market.

“We are very lucky this happened now and not two weeks or a month from now,” he said. “We can now react and move to a new position.”

Lehman filed for bankruptcy early Monday morning, closely following Bank of America’s purchase of Merrill Lynch. And yesterday, AIG was saved from a similar fate when the Federal Reserve bailed out the company with an $85 billion loan.

Despite the current crisis, though, the senior said he was relieved to avoid a repeat of last March, when the investment bank Bear Stearns was sold to JP Morgan Chase to avoid collapse, leaving the Yalies who planned to work there suddenly jobless. As most other investment firms had already ended their admissions process by that time, the unexpectedly unemployed looked to alternative post-graduation plans, including jobs with the Yale Admissions Office or seats in law schools.

Director of Admissions at the Yale School of Management Bruce DelMonico said last year he saw a continuation of the recent trend of a steady increase in applications. The admission rate this past year was 14 percent, compared to 28 percent just three years ago.

“We have also seen an increase in the overall quality of the applicant pool,” he wrote in an e-mail.

The economy, DelMonico said, is partly a factor in driving application numbers.

“I don’t think it’s so much that people are applying after they are laid off as that young professionals, in looking down the road at their next steps, see diminished opportunities for advancement where they are and look at professional school as a way to ride out the economic downturn while they burnish their resumes,” he said.

He also noted that the majority of the application increases over the past couple of years have been from international rather than domestic applicants, which suggests that the state of the U.S. economy may not be as relevant to these applicants as some other factors that are driving them to business school, like the new integrated MBA curriculum at SOM and the growing currency of an MBA in one’s professional development.

Given the unsteady economy, Ivan Dremov ’07 SOM ’10, who is one of the handful of students chosen for the Silver Scholars Program, said he will be glad to return to school next year instead of entering the tumultuous business world. As part of the program, Dremov spent his first year at SOM and now works for an executive search firm on a full-time internship. He will return to campus in his third year to complete the Silver Scholars Program, which is well-known for accepting undergraduates fresh out of college.

Looking back at his years living in Pierson College, Dremov said he made the right decision opting out of the job application process in October and November of his senior year.

“It’s a super-competitive process, and I think it’s only going to get worse.”

The light at the end of the tunnel

Yale administrators said Tuesday it is too early to say what fate will befall this year’s crop of graduates.

“In years when the economy is a bit shaky and in flux, we’ve had companies unclear about what the situation is,” Director of Undergraduate Career Services Philip Jones said in an interview with the News last week. As of last week, only a handful of companies had cancelled their appointments, which Jones said is not an anomaly. But several cancellations since Monday — including information sessions for Women on Wall Street, as well as Goldman Sachs and equity group Sanford C. Bernstein — sparked concerns among students that the repercussions from the crisis could be severe.

Jones could not be reached for further comment about the cancellations.

Retired Managing Director of JP Morgan Chase Tracy Williams ’79 said Monday that some banks are still hiring, although the incoming numbers fluctuate from year to year. He said the turmoil is sending senior analysts packing, and companies are ready to replace them with younger employees. He noted, however, that companies recruit most heavily among students who had interned with them the previous summer — so the outlook may actually be brighter for current juniors.

“If you’re a first-year analyst in the midst of turmoil and the market turns, you’re in the right place in the right time,” Tracy Williams said. “You’re there where all the talent will start to come in.”

And many Elis said they remain optimistic about their prospects in finance.

“I’m definitely sold on staying in the industry from my summer experience,” Bradford Williams ’10, who interned this past summer at Lehman, said. “Because I had one of the best times in one of the worst times.”

Bradford Williams said he will consider applying to Goldman Sachs and Morgan Stanley, two of the Wall Street powerhouses that are still holding on. While the financial crisis is bad timing for seniors, he said, he hopes the markets will be better in two years. Ideally, he said, juniors will enter a bull market — a period in which investment prices rise — upon graduation.

Even in the bear market, the interest in economics among Yale students is holding strong. Department of Economics Registrar Qazi Azam said the number of students enrolled in economics courses from other departments has fluctuated in recent semesters, with 1,629 in the fall of 2006, 1,766 in the fall of 2007, and 1,511 in the spring of 2008. But this year, he said, he anticipates more than 2,300 students — although, he added, that number may decrease before course schedules are finalized.

“It is an incentive to take economics courses, because more jobs are available to economics students than students in any other field,” he said.

Azam offered a borrowed analogy to explain the current situation: If a monitor next to a hospital patient beeps up and down the patient is alive, and if the line is straight the patient is dead. But if the market is going up and down, it is a sign that it is alive.

“Nobody has shown me hesitation about entering finance positions,” he said. “Who doesn’t want to be involved in money? People will always be interested in money and how can you make more of it.”

—Catherine Cheney contributed reporting

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