Confessions of a Cat-holic (198)

The way Vic Garber said it with a cunning grin on his face induced some bad feelings within me. I had a feeling that this internship would be tough as hell. I kind of knew what was coming so I dropped my courseworks to minimum workload, in a way to spare time for Eddie, as well as to prepare for the interviews and the internship. I packed all my least favorite courses in my junior year and I did quite poorly because I didn't know anything about coding. I had no idea how to do a Monte Carlo simulation; I took macroeconomics and financial engineering with Emanuel Derman though. He gave me an A+ but I passed/failed it so the grade was covered in my transcript and therefore would not affect my GPA. By the time I was a junior, I had very sound understanding about how the financial markets worked, with product knowledge in fixed income across a spectrum of derivatives and securities. I was no longer the girl needing to break into the financial industry hoping to get experience in a bank. I had what it took to start a career in sales and trading.

I was curious about my placement at Morgan Stanley. I was put into fixed income sales working with one of the best teams in Hong Kong, thanks to SEO. I had always wanted to work in marketing, so sales experience in a bank would be desirable and transferrable for my future career in advertising and PR. I was not sure if I could still be handed a sales job in New York, given that I was not American. I was also rejected by all the PR openings in New York, I could not even get a Victoria's Secret credit card because I was a foreign citizen with no credit scores. I knew that by agreeing to work in the states, I might have to compromise for a position in a department that might not fit my skills and liking.

Talking to my competitors from Goldman, I knew that my position working with Eric Tsang must have been a plum job. Oh how strategic, Goldman Sachs. They tried really hard to talk me into working in structured products. Derivative products had higher commissions and profit margins for the sales people, but central banks were where the money was. I knew it because I booked all the trades in the sales department. Central banks' trade volumes were around 50-100 million per trade, and each central bank executed around 3-5 trades a week at least. My China sales team had all the contacts with the Asian central banks: Central Bank of Korea, SAFE (China's foreign exchange funds), HKMA, Philippine's Central Bank, and Thailand's Central Bank, etc.

Structured products came in size of around 100k and only private banking clients were interested in accumulators, interest rate swaps, CDS, CDOs, or mini bonds which started the entire local community to protest against my department's malpractice after Lehman's bankruptcy. Yeah, I was in charge of all the selling and buying back of mini bonds so my sales job had almost got me on all the newspaper headlines for dumping junk products to the non-institutional investors in Hong Kong. If you asked me what impact I had made on this world, I would say that would be it.

Another summer project at Lehman, which was the final project handed by my immediate boss Eric, was a research presentation on mortgage-backed securities market outlook. It was an area I was interested in, as it involved real estate. Plus, the CDOs stuff was very complex, and I majored in financial engineering, so naturally I had an inclination to study these ABS, CDS, CDO, MBS, CLN, CLO, ABL, synthetic CDO...

I predicted the crash of the MBS market with very bearish and pessimistic cautions, adding onto a research report printed internally for the sales people by the fixed income research analysts in New York. In particular, I was shedding light on the balloon mortgage rates for many of the subprime mortgages, which could lead to bundled prepayments or delinquencies that could default the entire MBS market. I also commented that when real estate market collapsed, mortgages would collectively default regardless of credit ratings so even the AAA tranches would plummet. Even the CDS could not hedge this risk, I added.