The breeze is brisk, the Starbucks cups are red, and the sidewalks of New York City are crowded body-to-body with packs of overweight tourists and kids on leashes. With football season in full swing and the winter doldrums looming large, summer days spent slamming beers at The Standard beer garden are but a distant memory.

The holiday season is upon us, and while investment banking analysts across Wall Street are girding for a fiscal cliff-induced Christmas deal staffing special, a hint of holiday cheer hangs around the bullpen. That’s because around this time of year, junior investment bankers celebrate a Wall Street tradition as hallowed as the almighty 100-page Strategic Alternatives pitch. Monkeys rejoice – it’s Holiday Party season.

See if you can recognize any of these characters at your firm’s mid-December soiree:

The Craft Beer

Sam Adams Winter Ale? None of that for this guy. Craft Beer guy is probably the closest thing to a hipster banker. While everyone else is greedily slurping down Jack & Cokes and ripping tequila shots, Craft Beer guy is asking the bartender if they’ve got any Delirium Tremens in the back fridge. Craft beer guy loves drinking Belgian Trappist from a goblet, and sneers at the simple sacks who drink pale American swill. When Bud Light Guy calls him out for being an obnoxious fartsniffer, he comes back with something along the lines of “I’m drinking 8% ABV abbey ale, you are drinking hog piss.” In a way, he’s right – but who cares?

The Vodka Soda

Ever see that Ketel One commercial where all the dudes in suits are drinking vodka-rocks like it’s Johnnie Blue? That is not this guy. Hiding behind the curtain of flavorlessness is a problem binge drinker. It’s snowing outside and you go with a frosty, alcoholic Perrier. Is it because the squeeze of lime is just so refreshing on a late November evening? No. It’s because, like water, one can chug vodka soda by the gallon. One sure indication that it’s no longer summertime? People are drinking vodka soda sans straw. If you see Vodka Soda guy, give him some encouragement, then order him a double – he’s trying to catch up.

The Old Fashioned

With the exploding popularity of mixology bars, bartenders at regular-ass bars are seeing more and more of Mister Old Fashioned. While there’s certainly nothing wrong with this fantastic whiskey libation, ordering an Old Fashioned at your average open bar is like ordering seafood at a fast-food joint. You want Four Roses? You’re getting Early Times. You want seared ahi? You’re getting a f*cking Filet-O-Fish. There’s a time and a place for specialty cocktails, and unless your holiday party is at Please Don’t Tell, you should probably stick to the basics. Look out for Mister Old Fashioned bitching to the bartender about using a shaker instead of a swizzle stick.

For Egg Nog Guy and Scotch On The Rocks head to Wall Street Oasis>

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Back in September, for journalistic purposes, I purchased an 8-hour introductory course to day trading equities on LivingSocial for $99.  

The offer was described as an 8-hour introductory course with a pro, alongside 1-month free access to a trader chat.

I finally tried it out last week at Equity Trading Capital's day trading school located on Wall Street.

I went into the course with this idea that I somehow might kill it as a day trader and discover that I had an unknown talent, and possible future career.

At least based on my one-day performance... not so much.

The good news is that one of the things that Equity Trading Capital emphasizes in the course is that 90% of day traders fail. So they're realistic.

While I learned plenty of new things during the course, let's just say I'll be sticking to my day job for now. 

Here we are walking into Equity Trading Capital's trading floor.

Equity Trading Capital (Educate. Trade. Conquer) is located on at 40 Wall Street on the 5th floor.  

That's the instructor there talking to his fellow traders he mentors before the market open last Monday. 

My instructor, David Green, was a retired NYSE specialist who did not go to college.

David Green, who was rocking a pair of bit loafers and a slick back hairstyle, was extremely animated and passionate about day trading.  So for eight hours, he was definitely able to keep our attention.

Green told us that he did not go to college.  In fact, he began his career at the New York Stock Exchange in 1985 as a runner and worked his way up to a specialist/broker.  In 1999, he retired from the Big Board after his firm was bought by Goldman Sachs.

I did a little digging and found this great AP photo of Green (pictured left in the gray suit) from June 1999 when he was a specialist with Speer, Leeds & Kellogg on the floor of the NYSE.

We spent most of our time in a classroom. The students came from a bunch of different professional backgrounds.

My ten classmates came from a variety of different backgrounds including, a physics PhD, a college professor, a healthcare consultant and a college student.  

Some people said they were there to learn how to make some extra income and another was looking to transition into day trading while in retirement.  

One student said he bought apple at $525 and watched his stock rise to $700 and then spectacularly fall back to the $525 range again.  

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Because I'm nerdy like that, I tend to write down the more bizarre or tougher interview questions I get just to throw them at my friends and see how they'd react. As I'm traveling today and tend to incorporate at least one psychoactive substance into my flight routine, I figured sharing this list would be better than trying to write something that required actual thought.

If you've heard any of these before (or something similar), or have any idea of how you'd want to answer them, feel free to share in the comments.

1. If one song describes your life, what would it be?

2. Who do you think makes a better manager... a man or a woman? [You have to pick one, no "it depends" answer was allowed!]

3. Imagine you're a rabbit at the bottom of a flight of 7 stairs. You can either jump up 1 step or 2 steps at a time. How many different combinations of ways can you get up the stairs? [Example: jump 2, jump 1, jump 1, jump 1, jump 2]

4. How many people are born in the United States every year?

5. You own an insurance company with only one type of policy. The policy is for homeowner's insurance and 5 households own it. They pay you a monthly premium for coverage. The special thing about the policy is that the second one of the policyholders' homes is damaged, the entire policy lapses for everyone and only that person gets paid. Would you prefer the houses be in separate states or all in the same state, and why?

6. Explain a time you bought something cheap. [What the f**?]

For a few more questions, head to Wall Street Oasis>

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Mary Schapiro will step down from her post as Chair of the SEC, Dealbook reports.

Schapiro, who has headed the regulator since the financial crisis, informed the Treasury and the Obama Administration that she may be stepping down earlier this month.

This comes after a turbulent tenure at the agency that saw it's share of failures. Critics have accused the agency of not being hard enough on Wall Street, and letting big-time Ponzi schemers like Bernie Madoff and Allen Stanford carry on for years without getting caught.

And then there's then sex and corruption scandal that's rocking the SEC right now. A whistleblower is accusing the agency of allegedly retaliating against him for trying to expose major negligence.

Whoever succeeds Schapiro will have to deal with that and more. Last week, the word was that the Treasury's Mary J. Miller was being considered. Former Wall Street exec Sallie Krawcheck is also in the running, according to Dealbook.

Here's the SEC release:

Washington, D.C., Nov. 26, 2012 – After nearly four years in office, SEC Chairman Mary L. Schapiro today announced that she will step down on Dec. 14, 2012.

Chairman Schapiro, who became chairman in the wake of the financial crisis in January 2009, strengthened, reformed, and revitalized the agency.  She oversaw a more rigorous enforcement and examination program, and shaped new rules by which Wall Street must play.

“It has been an incredibly rewarding experience to work with so many dedicated SEC staff who strive every day to protect investors and ensure our markets operate with integrity,” said Chairman Schapiro.  “Over the past four years we have brought a record number of enforcement actions, engaged in one of the busiest rulemaking periods, and gained greater authority from Congress to better fulfill our mission.”

Chairman Schapiro is one of the longest-serving SEC chairmen, having served longer than 24 of the previous 28.   She was appointed by President Barack Obama on Jan. 20, 2009, and unanimously confirmed by the Senate. 

During her tenure, Chairman Schapiro worked to bolster the SEC’s enforcement and examination programs, among others.   As a result of a series of reforms, the agency is more adept at pursing tips and complaints provided by outsiders, better able to identify wrongdoers through vastly upgraded market intelligence capabilities, and more strategic, innovative and risk-focused in the way it inspects financial firms.

In each of the past two years, the agency has brought more enforcement actions than ever before, including 735 enforcement actions in fiscal year 2011 and 734 actions in FY 2012. 

In addition, the SEC engaged in one of the busiest rulemaking periods in decades.  Due to new rules now in place, investors can get clear information about the advisers they invest with, vote on the executive compensation packages at companies they invest in, benefit from additional safeguards that protect their assets held by investment advisers, and get access to more meaningful information about company boards and municipal securities.

“I’ve been so amazed by how hard the men and women of the agency work each and every day and by the sacrifices they make to get the job done,” added Chairman Schapiro.  “So often they stay late or come in on weekends to polish a legal brief, review a corporate filing, write new rules, or reconstruct trading events.  And despite the complexity and the intense scrutiny, they always excel at what they do.”

As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the agency has implemented a new whistleblower program, strengthened regulation of asset-backed securities, laid the foundation for an entirely new regulatory regime for the previously-unregulated derivatives market, and required advisers to hedge funds and other private funds to register and be subject to SEC rules.

During Chairman Schapiro’s tenure, the agency worked to improve the structure of the market by approving a series of measures that have helped to strengthen equity market structure and reduce the chance of another Flash Crash.  Among other things, the Commission for the first time has required the exchanges to create a consolidated audit trail that will enable the agency to reconstruct trading across various trading venues.

Chairman Schapiro previously served as a commissioner at the SEC from 1988 to 1994.  She was appointed by President Ronald Reagan, reappointed by President George H.W. Bush in 1989, and named Acting Chairman by President Bill Clinton in 1993.  She left the SEC when President Clinton appointed her as chairman of the Commodity Futures Trading Commission, where she served until 1996.  She is the only person to have ever served as chairman of both the SEC and CFTC.

As SEC chairman, Schapiro also serves on the Financial Stability Oversight Council, the FHFA Oversight Board, the Financial Stability Oversight Board, and the IFRS Foundation Monitoring Board.

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With headhunters likely beginning to reach out in December/January, I thought I'd put out a series of posts on making the transition from IB to HF. This one talks about getting that first interview.

If you're in a decent group, most--if not all--the major headhunters will reach out to you. The smaller ones are more sporadic/random in terms of who they reach out to and you'll need to proactively search for and contact these guys regardless of where you work. Most people who made the IB to HF transition got their first job through a headhunter, but there are also many opportunities available to those that are resourceful and proactively reach out to funds on their own.

Does pedigree matter?

Unfortunately for some, coming from a lesser firm puts you at a disadvantage. Your school also remains important. I was at a top group which collectively received every headhunter-driven interview out there. There were some funds that literally interviewed every one of the HF-pursuing analysts, but others picked only one or a select few. That minority tended to come from Wharton. It was not at all based on who the best analyst was, though our group as a whole didn’t really have any weak analysts as far as I was aware.

The reasoning behind this is relatively simple: hedge funds often hire multiple headhunters to fill a position, as well as reach out through personal and professional networks. Because a headhunter is limited in the number of candidates they can refer, they tend to select the “paper rockstars”—eg, top bb/elite boutique, high GPA, top target school kids.

By no means am I suggesting that only those of highest pedigree can get these jobs. You may have an uphill battle, but it can certainly be circumvented.

Also, note that the pedigree discrimination is most prominent early in the process when headhunters still haven't had an opportunity to assess your interview performance.

What should you be doing?

1. Reach out to all of the headhunters, even the obscure ones that may not have many opportunities for you. Dynamics and SearchOne have the most post-banking HF clients, but there are many others that can help you. Use LinkedIn, Google, fellow analysts, and any other contacts you can for this.

2. Crush the headhunter interview.

Demonstrate an unbridled passion for investing. Talk about the PA you’ve run since early college, even if you’ve never touched a brokerage account in your life. They need to be convinced that you love investing and you are absolutely certain that you want to be a HF analyst. Even better, tell them you felt that way since your early interest in college, and time and experience has only helped solidify that initial gut feeling.

You need to convince them that you are a top analyst, which, as long as you’re decent, will be easy enough to do because rankings at most banks don’t come out until you’ve completed your first full year. At that point, even if you’re second tier, it will be good enough. Do not do this if you think you’re going to be mid-tier or lower, because if you haven’t locked up a job by then, you will have some pissed off headhunters and they’ll have no trouble deciding they don’t want to work with you anymore

When they ask if you’ve considered PE, immediately respond with “no.” There should be no thinking. No hesitance. If you’re uncertain about whether you want to do PE or HF, 95% of the time you will fail the HF process and end up in PE.

Finally, get them to like you as a person. I swear each analyst class gets nerdier by the year, but for those of you that do have reasonable social skills, lay on the charm, be funny, and get them to develop a vested interest in you. This is racist, but if you’re Asian and come in fitting the stereotype, you are likely fucked.

3. You need to go into your first real hedge fund interview way over-prepared (will highlight what you need here in a future post). You need to impress these guys because if a headhunter has taken a leap of faith on you and you bomb on the first opportunity they give you, then you’ll have some difficulty winning their trust back.

4. If the headhunter route is relatively fruitless, networking and cold emails are another option. You’ll get plenty of rejections, but just like going out and approaching girls, you know it’s a numbers game. You will get rejected regularly, but with enough approaches you’ll get enough “yeses” to make it worthwhile.

5. You should also speak with fellow analysts and friends at other banks to try to figure out where they’re interviewing, and then send e-mails to those funds telling them that you’re aware they’re running a search process and you were hoping to be considered for an interview. Reword and include more than just that, attach a resume, and hope for the best.

6. Finally, you can look up to see what funds are launching or have recently launched and reach out to them to see if they have a need for analysts.

7. In securing a job, you absolutely need solid references. Have at least 2 people that will go to bat for you. Funds will sometimes call other random people they know at your firm, but hopefully you have a solid reputation and that’s not an issue. As long as you’re not a bad analyst, you should be fine. Furthermore, hedge funds may reach out to their friends at banks to figure out who they should proactively reach out to for interviews.

What do you need to know for the headhunter interview?

They may act relatively informal, but treat it like a real interview. This is your best and easiest opportunity to get a head start on the process. If they like you, you'll be among the first to hear about new opportunities. Know your story, convince them that you're passionate about the market and have no greater desire than to work at a HF. Also have a brief long and short pitch (this will be discussed in greater detail in another post).

Also have an idea about (1) what kind of investor you want to be (equity vs. credit) and (2) what kind(s) of fund(s) you're interested in.

Equity and credit guys tend to be very different. A credit guy once told me that if he had the same outlook in his personal life as he did on the job, he would never allow anyone in his life, save maybe a dog (under the belief that dogs love you unconditionally). As a credit guy, he sees the glass half empty, and he's expecting that at any moment some clumsy shit from the company will walk by and tip the damn thing over. Expecting that to happen, he tries to figure out exactly how much water will be left post-tippage, and makes bets accordingly.

What I mean to say is: credit guys are very concerned about protecting their downside and try very hard to quantify the risk/return of any investment with what they believe to be reasonable accuracy. After all, they're getting paid a coupon and have a specific maturity date when they're supposed to receive the principal payment. Furthermore, beyond understanding businesses, they get into the nitty gritty of credit docs, bankruptcy law, etc. These guys definitely develop a lot more legal knowledge than the typical equity analyst.

For the rest of this advice, head to Wall Street Oasis>

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Your MD is standing on top of a table downing shots of whiskey.

Meanwhile, your assistant is pole-dancing in front of everyone as the associate you’ve been thinking about murdering the entire year offers you tequila.

The bottles are free and the models are looking even better than usual – most likely due to those free bottles.

No, it’s not a lucid dream: it’s the holiday party at your investment bank.

Or at least, it was – before holiday parties were banned.

The Grand Tradition of Holiday Parties

Back in the day, holiday parties at banks were huge– in financial centers like NYC and London thousands of people would show up and get obscenely drunk.

Banks held them at places like the Waldorf Astoria in New York and rented out entire hotels for the night.

Everyone from the CEO and the most senior Managing Directors all the way down to admins and support staff was invited – everyone except for the clients themselves.

And you got unlimited food, drinks, and mayhem as the icing on the cake.

One year Barclays even spent $1.2 million USD on its 3,000-guest party in London.

It fit in perfectly with the banker mindset: work hard, play hard. The holiday party was the one night of the year when you could have fun no matter how many all-nighters you had pulled.

Work slows down around the holidays – unless you get an insane client who just needs to close a deal by December 31 – so taking a break is easier.

In my first year in banking, there were 2-3 week periods where my roommates didn’t see me at all, so they assumed I was locked away in a Siberian prison.

But after I got back from the holiday party that year and told them all the juicy details, they started asking me what’s it like being an investment banker and whether I could write them a recommendation.

(At which point I told them to stop thinking about it and ran away.)

What Do You Mean By “Play Hard?”

Holiday parties are (were) amazing because you could do things that would normally get you fired – but then escape the ax by claiming it was all a drunken shenanigan.

Spending millions on parties happens whenever there’s a bull market and all desire to maintain a good image goes out the window.

You’d see:

• Secretaries and support staff going home with bankers
• 60-year olds dancing hip hop
• People relieving themselves in… places that were not the bathroom
• “Extracurricular activities” afterward like strip clubs (and yes, females tagged along)

Sometimes banks even had traditions at their parties:

• A certain secretary would pick a different analyst to go home with each year
• All the analysts had to perform a skit or sing or doing something else embarrassing
• New hires would have to give speeches

So even if your bank didn’t spend millions on a holiday party like Barclays did, you’d still have a pretty good time there.

Aside from training, it was the most fun you could have as a junior banker.

The Pathetic Shell of Holiday Parties

In a post-bailout world, though, most banks have cut back on or eliminated holiday parties altogether.

When you’ve just accepted a $50 billion bailout from the federal government, the last thing you want to do is rent out the Waldorf Astoria and have drunken people jumping out of windows.

So in times of recession and financial crisis, holiday parties are more likely to be individual groups or teams going out to bars and the MD buying drinks for everyone.

Or maybe a quick trip to the Metropolitan Museum of Art, the cafeteria, or… the public library.

Sometimes there won’t even be an official holiday party at all – in which case you invite friends out and turn it into the best night possible given that you’re worth a few million less than your MD.

What NOT to Do at Holiday Parties

I won’t lie: it would be a miracle if you got to go to a real holiday party in the smoldering remains of the post-bailout financial world.

But in case that happens, you need to know what to do and what not to do – and as with fashion, it’s easier to give advice on the “what not to do” part.

Get So Drunk You Assault Your MD

You can get away with a lot at holiday parties, but you can’t get away with everything – so avoid getting so drunk that you start fighting people or accidentally reveal your secret life as Patrick Bateman.

Comments you make could still be held against you later on – just like every interaction with a banker is an interview, everything you do as an analyst or associate counts toward your ranking and bonus.

Bring Your Significant Other

If everyone else is bringing theirs, sure, go ahead. But otherwise you’ll run into problems as you blurt out things that no one else should hear, or as you start eyeing that cute guy/girl you’ve been interested in since training.

You’ll probably break up with your significant other before you even get to the holiday party– but just in case you defy the odds, watch out.

Hook Up With Co-Workers

This is still a terrible idea, and it’s even worse if you do it in a drunken stupor.

Imagine the awkwardness of dating co-workers in normal times… and now realize that instead of 40 hours per week, you’ll be seeing them 80-100+ hours per week.

Once (not “if”) you break up, you’ll have an awkward situation at work.

So resist the urge and if you really have to satisfy your needs, go for the support staff rather than fellow bankers.

Be Boring

There are 2 big mistakes to avoid here:

1. Not show up in the first place due to “too much work.”
2. Stand around by yourself and not talk to anyone else.

No matter how slammed you are, you can always take 30-60 minutes out of your day and show up to say hi to everyone.

If you don’t show up, it will backfire as senior bankers start to wonder if you’re a loser and whether you’re social enough to get promoted and wine and dine clients one day.

#2 is easier to avoid because everyone else will be moderately to extremely drunk – so unless you go out of your way to hide in the corner, others will approach you.

Yes, you need to burn the midnight oil as a junior banker but you also need to be likable– being boring subtracts from your “likability” points.

But…

If you’re in a more senior position (i.e. not a newly minted 1st year analyst or associate) and you’re making tons of money for the firm, you might still get away with inappropriate antics anyway.

It depends on who likes and defends you – if the head MD of the office worships you, he’ll overlook how you were hitting on the associate’s wife, even if the associate wants you fired.

And if you’re on your way out anyway, you might get away with even more since it won’t matter much.

But take those risks at your own peril – and don’t blame me if you get fired for hooking up with that assistant who used to be your MD’s mistress.

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The Dec Level I CFA candidates take the exam this weekend. Knowing & preparing what you're going to bring can make a lot of difference in your exam - taking the exam when you know you're running out of pencils, or that your calculator is getting iffy unnecessarily piles onto the already-stressful environment.

As the following years and levels piled on, I've added a few must-bring items of my own. Here is my definitive list of things to bring to the exam that you should not miss. Take a shopping trip 1 or 2 days beforehand and try to get all the items on this list.

Things to bring into exam hall

You can put most of this in a plastic baggie and just take everything in it when you're marching into the hall (as proctors will not allow bags of any kind).

1. Wooden pencils - sharpened (required). I know some exam centres allow mechanical pencils as well, but why take the chance. Get a whole pack from your local stationery store and sharpen the whole lot before setting out - that way you won't have to fiddle with sharpeners if you don't want to.
2. Small sharpener (optional). Get a good quality but minimal sharpener - I find that the good ones tend to be cast metal. Costs a few cents.
3. Eraser (required). Take any wrappings off - otherwise the proctors will take them off for you anyway.
4. Two identical calculators (required). Texas Instruments BA II Plus (including BA II Plus Professional), or Hewlett Packard 12C (including the HP 12C Platinum, 12C 25th anniversary edition, and 12C 30th anniversary edition). No others. Additionally, I think the traditional advice of bringing a spare battery is generally not the best, for several reasons. One, you can't change the battery in the Texas Instruments BA II Plus calculator without a suitable Phillips screwdriver, so if you battery really does run out, you'll have a battery replacement with no means to replace it (the HP 12C & the TI BA II Plus Professional however does allow battery changes with just fingers). Second, empty batteries are not the only problem calculators can have - stuck or non-working buttons are a common complaint. Get an identical second calculator from either a charterholder, or an ex-candidate (i.e. one that has given up trying). However if you can't find an identical calculator I would consider batteries - learning how to use a new financial calculator in the middle of an exam isn't fun.
5. Exam ticket (required). Goes without saying. Printed on clean paper, unmarked and to be stayed unmarked throughout the exam. This will let you know where you are supposed to sit and do your thing.
6. International passport (required). CFA Institute only accepts international passports as identifications now. Problems with passports are some of the more frequent issues with candidates every year. They either forget the passport altogether, or they spend the morning of exam day frantically searching for it as a result of not having used it for some time. I know someone who had to convince the proctors to let her take the first exam passportless, had to finish one hour early to drive top speed to where she left it, and started the second session late. Do not let that be you.
7. Watch (optional). A watch will serve 2 purposes - keeping track of time during the exam, and keeping track of time before the exam. The second reason is something that some candidates overlook - a whopping 5% of you will be late into the exam hall and will have to start after the instructions have been read out to the candidates and the exam has started.

For more must-takes and a handy infographic, head to Wall Street Oasis>

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A new study shows something bizarre happened to financial sector salaries after 1987: they began skyrocketing.

Writing in the Quarterly Journal of Economics, professors Thomas Philippon and Ariell Reshef say that until that year, workers in finance earned the same education-adjusted wages as other workers.

But by 2005 executives in finance earned 250% more than executives elsewhere, and there was a 300% premium for workers in finance in the Tri-State Area, they write.

What happened?

Basically, pay got started going haywire once deregulation kicked in. 

The authors use a special deregulation index that takes into account credit intermediation, insurance and other factors and come up with the following graph:

In particular, they identify the relaxing of the Glass-Steagall act in 1987 as the catalyst to the wage explosion.

Relaxing the law, they write, "changed both the organization of investment banking and competition within the sector and therefore should have a bigger impact." 

They conclude by saying Dodd-Frank could close the gap substantially:

Changes in financial regulation are an important determinant of all these patterns. The ultimate test of this hypothesis may be the evolution of wages in the next 5–10 years. If new regulations (Basel 3, the Dodd–Frank Act, etc.) are effectively implemented and if we are correct, then we expect both wages and skill intensity to converge and excess wages to disappear.

SEE MORE: We Visited A Day Trading Class — And Got Hosed >

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Everyone on Wall Street is buzzing about Sallie Krawcheck.

It's been over a year since Krawcheck, the former head of global wealth management at Bank of America, left the North Carolina-based bank. 

Now, according to Dealbook's Ben Protess and Susanne Craig, she's seen as a potential front-runner for the top spot at the Securities and Exchange Commission. 

After current SEC chairperson Mary Schapiro said she's resigning, President Obama designated Elisse Walter for the position.  However, Walter has indicated she will only stay on for a short time period, Dealbook reports.

That means another successor for the top SEC post will likely be picked next year.

Those who are also seen as contenders for the post include Robert Khuzami, the SEC's enforcement director, and Richard Ketchum, the head of FINRA. Mary Miller, a top Treasury official, has removed herself from consideration, according to Dealbook.

Of course, the search for the next SEC chair is still in the beginning stages.   

Krawcheck has the Wall Street experience and since leaving the Street she has written extensively about key regulatory issues including money market funds, ways to fix the banks and individual investor protections.  She has also spent time advising elected officials in Washington, D.C.

That being said, let's still take a tour of Krawcheck's life and career. 

Sallie Krawcheck grew up in Charleston, South Carolina.

Sallie Krawcheck was born in New Orleans, while her father Leonard Krawcheck was in law school at Tulane. 

She grew up in Charleston, South Carolina. 

Her father was a former member of the South Carolina House of Representatives.

She was crowned homecoming queen in high school.

"[In middle school] I had the glasses, the braces, the corrective shoes. I was half-Jewish, half-WASPy. I couldn't have been further outcast," Krawcheck told Fortune magazine.

"There was nothing they could do to me at Salomon Brothers in the '80s that was worse than the seventh grade," she added.

OK so Krawcheck wasn't always awkward looking like she suggests.

While attending the exclusive Porter-Gaud School, she was crowned homecoming queen. She was also a cheerleader and a track star in high school.

Source:  Fortune Magazine

Source: CityFile

She received the prestigious Morehead Scholarship to the University of North Carolina. She majored in journalism there.

Krawcheck received the prestigious Morehead Scholarship to the University of North Carolina at Chapel Hill.

She she graduated with a degree in journalism and mass communication in 1987.

She never worked as a journalist though.

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This is a guest post from Roger (HBS, 2010) and Jennifer Chen (MIT Sloan, 2010). Roger and Jennifer are authors of “The HBS Blueprint: A Proprietary Step-by-Step Action Plan,” which teaches you how to get into HBS and or any other top business school.

If you’re an investment banker interested in going to a top business school someday, I’ve got good news and bad news for you.

First, the good news: Most MBA classes at the top programs over-index in students from investment banking. Experience in investment banking shows a strong work ethic, quant skills, and ambition, and Adcoms love that.

But here’s the bad news: The number of investment banking applicants is also disproportionately high (yes, everyone wants that elusive “2-year vacation”), which means that there’s a lot of competition… and that you might just look the same as everyone else– not ideal for winning admission to the top programs.

But there are clear ways to stand out from the crowd of current and former bankers – even if you haven’t climbed mountains in Japan or starred in a reality TV show before.

1. Show Integrity and Authenticity

The stereotype is that investment bankers are very money-driven.

And, let’s be honest: you probably did join the field because you like money and want to make a lot of it. No one works on pitch books until 4 AM because it’s their passion.

But in your application, it’s all about perception rather than reality.

You have to write in a genuine voice and give a thoughtful rationale for why you went into investment banking and, perhaps more importantly, what you plan to do with it.

The most common mistake here is to assume that the reasons why you went into investment banking are self-explanatory - you don’t even need an explanation, right?

Wrong.

Yes, Adcoms are very familiar with banking… but if you don’t define your own reasons for why you went into it, they’ll do that for you.

So you need to re-think your approach here and focus on 3 key points:

1. Why did you go into it in the first place? Were you interested in M&A deals? Did a family member in real estate or brokerage get you interested? Had you always had a passion for investing?
2. What did you learn during your time in banking and how did it shape your career goals? For example, did you discover that you really like finance but are interested in making it more accessible to people? Or that you are more passionate about a specific area in the industry?
3. How will you leverage this experience in the future? We go into more details on this below, but it’s important NOT to come across as a “Yeah, I did my 2-3 years of banking and now I want to forget all about it” type of candidate.

A good rule of thumb is to ask someone you know to read your application, and ask if the voice that comes through is someone you’d respect and trust. If it is, you’ve done your job.

If it isn’t, you need to rethink what you’ve written and make sure that your answers to those 3 questions above are unique to you and NOT generic.

2. It’s Not What You Did, But Who You Are

One of the biggest mistakes you can make in your application is assuming that since you came from a top bank, like Goldman Sachs, you have a golden ticket to admission at any of the top programs.

Think again.

Yes, a top-tier firm will give you an edge, all else being equal… but the specific firm you worked at is only a small part of Adcom’s evaluation of you as a candidate.

Going back to the point above: a lot of people applying to the top schools have worked at these top firms.

Sure, you might stand out if you’re applying to 2nd tier programs, but there’s really no point in going to those anyway, at least if your goal is to advance within the finance industry.

Another common mistake is to develop a laundry list of accomplishments and make those the focus of your application. This is not your private equity resume where all they care about is deals and deal experience – the Adcoms want to know who you are as a person.

To be clear, here’s what they DON’T care about:

• How many deals you completed or what types of deals they were
• The dollar values of those deals, the relevant EBITDA multiples and what the valuation ranges were
• The super-advanced revenue model you built that incorporated 100 different business divisions across 2,000 separate worksheets

Adcoms want to see leadership– how did you influence the outcome of a deal or client engagement? What barriers did you overcome? What did you learn from those experiences, and how did you develop as a result?

Examples of what they DO care about:

• Did you influence a client CEO to avoid taking an unethical action just to make his company look better?
• Did you come up with an idea that could save employees or create new jobs, despite “cost-cutting” measures post-acquisition?
• Did you convince the Managing Director of your group to start looking at deals in emerging markets, or to move into other new and unexplored territory?

Look at the experiences you’ve had and use them to build a story about how you’ve grown and who you are.

3. Extracurriculars Matter – Even If You Have No Time for Them

Getting involved in extracurricular activities – whether inside or outside your firm – is a great way to show awareness, involvement, and concern beyond what directly impacts you.

No, you won’t have much free time as a banker… which is why activities inside your firm can also be an excellent way to “do work” and also appear more interesting at the same time.

Coming from an investment banking background, it’s especially critical to show empathy– and the examples you provide of how you did this are JUST AS important as what you did in your investment banking role.

Here are a few examples of things you can do within the firm to demonstrate leadership and involvement:

• Lead recruiting efforts
• Influence a compliance or HR policy
• Help shape and implement your firm’s mission statement
• Start a diversity program or women’s leadership group
• Develop a mentorship program
• Start a career development workshop series

If you’d prefer to be involved outside of work, choose activities that you can link to your career vision and that support the greater aspirations you’ve shared in your application.

Don’t simply join as a passive member to check off a box.

As with university admissions, it’s far better to be deeply involved with 1-2 activities where you actually made real contributions as opposed to creating a laundry list of 10-15 activities where you did almost nothing.

4. Communicate a Clear Career Vision

When crafting your vision, aim big, be specific, and tie it back to how XYZ MBA program is critical to helping you get there.

If you worked with companies in a particular industry, talk about how that experience shaped your aspiration to make an impact in that vertical.

For example, let’s say you worked in healthcare investment banking– you want to write about a “big career vision” such as:

• You want to change the way that healthcare is administered
• You believe the healthcare insurance industry is broken (actually, I think everyone believes that it’s broken…) and that it needs to be disrupted– and you have the plan to do it
• You want to use mobile phones to assist in tracking and improving healthcare by focusing more on preventative care and flipping the current paradigm on its head

None of these goals is “easy,” and that’s the point. Each one is big, scary and exceptionally difficult to achieve – but that’s what top business schools want to see.

They want visionaries that will become world-renowned and famous – and they’d rather admit an “Icarus” who flies too close to the sun and falls rather than someone who never dares to fly.

If you wanted to stay in the world of finance instead of focusing on a new industry, you can tell a number of stories about your career vision:

• Make consumer personal finance education more accessible by starting a new video content network on personal finance topics
• Create a tech startup that brings the insights of hedge funds to the general retail investor to democratize investing
• Create a better business model for retail banking that doesn’t rely on gouging consumers with fees
• Develop a better model for peer-to-peer lending that allows both institutional investors and individuals to participate
• Develop financial products to serve the “under-banked”
• Change the way small businesses gain access to capital
• Create an online membership site where anyone can learn about deals and financial modeling and get answers to their questions from the community and the instructors… whoops, Brian already did this one – pick a new vision!

Talk about a career vision that is both ambitious and a logical extension of the experiences you’ve already had, and don’t worry if you’re not sure if that’s what you REALLY want to do.

The key is to develop a logical story that will inspire them to believe in you and help you achieve your vision.

5. Build Senior Advocates

Developing close relationships with senior-level people in your firm is one of the most important things you can do to stand out from the crowd.

Getting a recommendation from someone at a high level demonstrates that you have the confidence to reach out to and engage with senior people; it also says a lot about your performance and results, since senior-level people tend to only notice and endorse people they perceive to be stars.

You’ll get big bonus points if they are able to talk about you and your accomplishments at a detailed level in their recommendation.

Senior-level people also often graduated from the top MBA programs, and frequently maintain connections to influential people at these programs. An informal word-of-mouth endorsement could be just enough to tip you into the “accept” pile.

Here are a few tips based on personal experience of how best to develop these relationships:

• Find out what projects they are working on, and ask to join the team (do your homework first so that it’s obvious that you bring value to the table).
• Proactively run an analysis and or put together a model that could benefit a project they are working on.
• Start a task force for something you believe in, and ask if they would be willing to sponsor it.
• Send out an invite for lunch, and ask about their career path and any advice that they might have for you. Senior-level people love talking about themselves and distilling advice to anyone who will listen.

More Tips?

All the tips above assume that you’re starting well in advance and have plenty of time to plan out your application – which is how it should be.

Knowing these tips ahead of time will help you stand out over all the other financiers applying and make sure you come out ahead– not only in the minds of the Adcoms, but also when acceptance letters are issued.

And to Learn Even More…

Sign up for the full HBS Blueprint at masterofbusinessadmissions.com.

Note from Brian: I have read A LOT of business school admissions guides because I actually thought about applying to business school at one point back in ancient times.

If you’ve read my emails and newsletters for some time, you know that I rarely promote 3rd party products and services, because most of them suck and don’t deliver what you’re looking for.

This business school admissions guide is the complete opposite of the other junk out there on the market because it tells it like it is.

There is no politically correct BS or generic fluff about “coming across as a well-rounded applicant” and other such nonsense here.

Instead, Roger and Jennifer explain clearly, starting from the first few pages, what the ONLY goal of your applications should be:

“The one and only goal of your application should be to convince the admissions committee that you could potentially become the next Jack Welch.”

That’s the truth.

Top schools don’t give a crap how “interesting” you are or how much community service you’ve done… they care about whether by “investing” in you, they’ll improve their own image and prestige and produce an industry titan in the future.

In essence, they’re just venture capital firms that invest in people: they expect most of their investments to be “failures” or at least produce “mediocre” outcomes (regional director of a biotech company)…

But they’re looking for the next Google or Facebook to offset all those “under-performing portfolio companies” (alumni who get “normal” jobs).

Here’s my favorite quote from this guide:

“If your end goal is just to become an Associate Director at a CPG company or a Managing Director at an Investment Bank, why would any school take a chance and invest in you? It’s like buying a $4 stock that you know only has the potential to increase to $5 per share.”

And it’s absolutely true.

I love his approach because it’s the same approach I’ve always used here: if you have no chance at getting into finance, I tell you that and recommend alternatives… if your interview skills suck, I tell you that and explain what to do.

If I were a doctor (shudder), I’d have horrible “bedside manner”… but you read this site because I tell you what you don’t want to hear.

After this introductory section, the rest of the guide is a detailed blueprint for how to create a vision that excites the Adcoms and then tell your story in a way that convinces them that you can actually achieve it.

This is why the guide kicks ass: it acknowledges that business school admissions, like finance interviews, are all about your story and how well you tell it more than anything else.

And that’s why you need to sign up for it right away and follow the blueprint it gives you for winning admission to all the top schools.

Unless, of course, you have no interest in getting into the top MBA programs worldwide – in that case, roll the dice and good luck to you!

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The research firm Gartner Inc. found that worldwide, the number of global organizations that restrict access to social media is going down by 10 percent every year.

However, Wall Street’s largest financial institutions continue to buck the trend.

The New York Timesreports that JPMorgan Chase, Bank of AmericaMerrill Lynch, and Goldman Sachs are among the firms that block employees from social media sites like Facebook and Twitter.

Financial institutions cite increased regulation on communications as their rationale for the firewalls. Dealbook’s Michael Kaplan quotes Goldman Sachs spokesman Richard Siewert Jr., who says “You have to be able to monitor what people are saying in real time.”

One thing’s for sure: analysts don’t like this policy one bit.

From Kaplan:

Working on Wall Street is “a full life commitment, and without access to social media or personal e-mail it can often feel like nothing exists outside of work,” said one JPMorgan Chase analyst…"It’s draconian…"

“YouTube is the biggest obstacle,” agreed an analyst at Bank of AmericaMerrill Lynch who also spoke anonymously.

Analysts often have a fair amount of downtime on the job while waiting for their superiors to review and return assignments, and they’ve found some ways around their companies’ firewalls.

According to the article, analysts use Rutube (Russian YouTube) to watch soccer highlights, use less popular video sites like Vimeo, and bring personal mobile devices that enable them to access their social media accounts.

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I’ve noticed a disturbing trend lately: many readers have the wrong idea of what will help them with investment banking recruiting.

Thinking that they need to do “something” at the last minute to boost their chances of getting into the industry, they come up with all sorts of “creative” – yet marginally effective – ideas.

Read on to see exactly what not to do to get noticed in recruiting.

1. The CFA

I must get more comments about the CFA than any other topic (yes, even you, models and bottles).

There are hundreds of reasons the CFA (any level) is a waste of time for getting into investment banking (note those highlighted words carefully, and read to the end of these points before leaving an angry comment), but here are the top 3:

a. It’s not necessary for advancement and the majority of investment bankers don’t even have it.

If you want to be a portfolio manager, go ahead… but for the rest of us it’s marginally helpful at best.

b. Studying for the exam requires an obscene amount of time – almost 1,000 hours according to the website.

Think about how much networking you could do in that same amount of time: let’s assume 900 hours of study time for the CFA (300 hours per level).

Assuming you can plan and conduct 1 informational interview in 1 hour total, that’s nine hundred new contacts.

Which do you think will be more useful: a single line at the bottom of your resume, or almost 1,000 people who can help you get interviews?

c. There’s almost no correlation between the CFA and what you actually do as an investment banking or private equity Analyst / Associate.

Last time I checked, the CFA curriculum did not cover administrative work, due diligence, pitch books, and the financial modeling specific to banking.

Please, no more email or comments on the CFA. Use those 900 hours and do some networking, learn another language, or go on a trip around the world – any of those would be more helpful for getting into finance.

Clarifications to the Statements Above: In some situations and geographies the CFA can be useful – for a full discussion, please read this newsletter article on the pros and cons and when you should think about the CFA.

The reason why I made such strong statements above is this: most comments and questions I get on the CFA are coming from people with low grades at lesser-known schools with no experience who think that the CFA will magically get them into Goldman Sachs investment banking.

It won’t.

It may help, and it is certainly more useful in other fields such as equity research, portfolio management, and (some) hedge funds, but it will not “replace” low grades or limited work experience.

Here’s more on degrees and certifications in investment banking.

2. Your Activities

“But wait,” you say, “I thought it was really important to be ‘interesting’ in interviews?”

It is – but bankers pick resumes mostly based on work experience and whether or not they know you.

Now if you’ve done something truly impressive – like starting a non-profit that built 1,000 schools in Southeast Asia – that can actually help you.

But let’s be honest: many activities are just resume padders, and having 1 name or 50 names won’t make a difference if that’s the case.

If you have absolutely NO finance experience and nothing even related to business on your resume, then you can play up your activities – but otherwise avoid it.

3. That Investment Club You Started

If you can’t get a real internship, start an investment club or student-managed fund instead, right?

Actually, this logic is not terrible: it’s certainly more helpful than the CFA, and in the absence of real business experience, it looks better than being a lifeguard or working at a restaurant.

But no student-run investment club is going to put you on par with the guy who did 2 summers at Morgan Stanley.

You should only do this if you can’t find a part-time, school-year, or summer business-related internship of any kind.

4. Your “Internship” Waiting Tables

Truthfully, being an investment banking analyst is much more similar to being a waiter than it is to most “real” internships.

You need to multi-task, you’re always running around, you have to deal with annoying clients all day, and you have to do a ton of grunt work.

But bankers themselves don’t see it that way and won’t acknowledge this type of work experience as equal to a “real” internship.

You don’t want to write about any of this unless you have nothing else to point to.

5. Bloomberg / FRM / CPA / Other Meaningless Certifications

Similar to the CFA, most other certifications are also useless – although on the up-side they don’t waste nearly as many hours as the CFA.

Some of these certifications – like the FRM and CPA – have nothing to do with investment banking, while others – like Bloomberg – are somewhat relevant but useless compared to, say, calling 5 alumni.

Remember, the only part at the bottom of your resume that most people even read is what’s in the “Interests” section.

Bored office workers always want to meet interesting people, but no one wants to meet well-certified people.

6. The GMAT

While getting a decent GMAT score is important for business school admissions, it’s less relevant for getting into investment banking at the MBA-level. And it’s even less relevant at the undergraduate level.

If you had to take it for business school anyway and earned a good score, you can list it if you want – but if you don’t have room, cut it.

But if you haven’t had to take it for any reason yet, don’t do it in hopes of getting a good score and using that to propel your way into finance: your time is better spent elsewhere.

7. Non-Native-Speaker-Level Language Skills

Ok, this one is not 100% true.

It helps to have some language ability, even if you’re not native speaker-level – something is better than nothing.

But unless you’re at an extremely high level (i.e. you could watch a university-level lecture on economics, understand everything, and then write a brilliant 10-page paper about it in that language), you can’t leverage language abilities to move to offices in other countries – there’s too much reading and writing required.

There are some roles – like trading and certain back and middle-office positions – that don’t necessarily require language mastery. But if you’re reading this site, you’re probably more interested in areas like investment banking and private equity, both of which require a lot of communication and reading/writing.

8. Your Ph.D.

After the CFA, this might be my #2 question received via email:

“Will a Ph.D. help me get in? Do banks care about my quantum physics skills? What if I’m the next Isaac Newton?”

First off, if you’re smart enough to write the next Principia, you should not be in investment banking because you’re going to get a lot dumber. Go write a book about your discoveries and win a Nobel Prize.

The math required in finance is VERY simple. Addition, subtraction, multiplication, and division if you get really fancy.

Most of what you do in M&A is administrative: sending emails, keeping track of different buyers, and updating Word documents.

So the only reason to get a higher degree is if you want better access to recruiting channels at a more prestigious school – and even then, stop at the Master’s level rather than doing unnecessary work.

9. Financial Modeling Courses

“Wait a minute, you just RELEASED your own financial modeling course, and now you’re saying that banks don’t care whether or not we’ve gone through them? Are you crazy?”

No, I’m just being honest.

The *knowledge* you gain from these courses is very helpful, especially if you don’t have a finance background or you want to prepare before you start working.

But listing the course itself on your resume – no matter which one it is, or whether you invest $100 or $10,000 – doesn’t guarantee you anything.

The bottom-line is that if you want to prepare for interviews and for work itself, these can be a good option – but they fail as mere resume padders.

Wait, So What DO They Care About?

Easy:

1. Work Experience
2. Educational Background (more applicable if you’re a student)
3. How many people you know at their firm and how much they like you (networking)

But there’s a problem if you’re trying to use any of these to boost your chances at the last minute: each one takes years or months of effort – you can’t do it overnight.

But It’s the Last Minute and I Really Need Something!

It’s pretty much impossible to add anything substantial if you only have a week left before interviews begin – but if you have a few months, here are 2 quick examples of how you can make some impressive-sounding last-minute additions:

1. Study abroad program / some kind of international experience. (doesn’t need to be 3-4 months – something shorter is fine)
2. Summer, night, or part-time program at a well-known school.

Any type of study abroad program is also great to talk about in interviews, especially if it’s to a completely random country or region. Going on a trek to Antarctica stands out more than going to Paris.

Doing some type part-time or summer program at a brand-name school is more helpful if you’re not going to a well-known school right now – anyone scanning your resume quickly will say, “Aha, I recognize that name.”

Last-Minute Standout?

Of course, none of these tactics will make up for a lack of solid work experience or lack of contacts in the industry.

But if you’re struggling to stand out with only a few months left, you don’t have much of a choice – you have to take what you can get.

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We've all been there before.

An Analyst buddy sends a group-wide email. Something about a relevant deal and he wants to be sure that all the MDs know about it. Not to mention, it's almost bonus time and he wants them to know that he knows about it.

"Is he serious with this shit?" you think to yourself. Why not give him a little grief?

So, you shoot off a quick reply. "Way to make me look bad, d*ckhead. Get back to spreading comps."

You chuckle to yourself. Proud of your pithy, yet topical, comment, when suddenly it hits you...

"Oh my God. What I have I done."You hit 'Reply All'

During my three year stint in banking, there were two things that I feared above everything else.

1. Getting staffed on a "Strategic Alternatives" pitch on a Friday afternoon
2. Accidentally hitting 'Reply All' on a snarky email to a fellow Analyst

Unfortunately, I had to face Fear #1 on more than one occasion. There's little worse than knowing that you'll have to cancel plans so you can put together a 120 page pitchbook explaining to Boeing why they need to sell a subsidiary, and hire us of course, knowing that there is no chance in hell that it'll ever happen. Literally nothing in banking worse than spending your weekend turning draft after draft of a useless pitchbook.

Hitting 'Reply All' is a close second, and it's something I managed to avoid throughout my entire three years. Looking back, I'm honestly kind of baffled that I never did it. With the sheer amount of email you get every day (make that every hour), you start to fire them off on auto pilot. I had a couple of close calls, but I always managed to check to make sure I didn't hit the dreaded Reply All button when it would've come back to haunt me.

An article last week in Businessweek addresses the 'Reply All' problem. Apparently, email client makers are starting to offer fixes. Microsoft recently released a plugin for Outlook called NoReplyAll, which allows a sender to prevent recipients from responding via 'Reply All'.

A company was founded on the premise that 'Reply All' is a nuisance. Sperry Software, not to be confused with the boat shoe business, sells a simple program that assaults users with an alert every time they hit Reply All to any email. It acts as a failsafe mechanism to prevent any foolish mistakes. And get this, it sells for $14.95 and has allegedly sold hundreds of thousands of copies, making the anti-'Reply All' business a big business to be in.

For the rest of this post head to Wall Street Oasis>

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The New York Post's Page Six reports that Justin Bieber was playing ping-pong in a private room at Susanne Sarandon's SPiN last week. 

The pop star and his crew were told that they'd have to leave at 6:30 p.m. because that room was reserved for a JPMorgan private party. 

When their time was up, Bieber reportedly responded with, "Why does he get the room and not us?" 

Brilliant. 

[Hat Tip: NYMag's Kevin Roose]

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Citigroup is going to cut 11,000 jobs, the bank said in a release.

As a result of the job cuts, the bank expects to take a fourth-quarter pre-tax charge of $1 billion and $100 million in related charges in the first half of 2013.

Glancing over the release, it looks like most of these cuts will hit the bank's foreign operations, especially the operations and technology departments.

The bank identified these as areas that do not provide "for meaningful returns," the CEO said in a statement.

Citigroup has a new CEO, Michael Corbat, who took over the helm back in October after Virkam Pandit resigned suddenly.  This is his first real big move as CEO. 

Shares of Citi were last trading up more than 3% in the pre-market.

Here's the release:

Citigroup today announced a series of repositioning actions that will further reduce expenses and improve efficiency across the company while maintaining Citi’s unique capabilities to serve clients, especially in the emerging markets. These actions will result in increased business efficiency, streamlined operations and an optimized consumer footprint across geographies.

Michael Corbat, Citi’s Chief Executive Officer, said, “These actions are logical next steps in Citi's transformation. While we are committed to-- and our strategy continues to leverage-- our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns. And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations.”

Due to this repositioning, Citi expects to record pre-tax charges of approximately $1 billion in the fourth quarter of 2012 and approximately $100 million of related charges in the first half of 2013. Citi currently expects that the repositioning will generate $900 million of expense savings benefitting 2013 results and that the annual expense savings will exceed $1.1 billion annually beginning in 2014. Citi also expects the repositioning actions to have a negative impact on annual revenues of less than $300 million. These actions will result in a reduction of more than 11,000 positions.

Citi expects the repositioning activity to affect the following businesses and functions:

Institutional Clients Group (ICG): Approximately 25% of the announced fourth quarter repositioning charges are expected in Securities & Banking with another 10% in Transaction Services. The repositioning actions are expected to result in a reduction of approximately 1,900 positions, of which more than half are in the Operations & Technology functions that support the business. The actions are designed to streamline our client coverage model in Banking and improve overall productivity in our Markets business, especially in areas experiencing continued low profitability such as cash equities.

Global Consumer Banking (GCB): Approximately 35% of the fourth quarter repositioning charges are expected to be incurred in Global Consumer Banking, resulting in a reduction of approximately 6,200 positions, of which approximately 40% are in the Operations & Technology functions that support the business. As a result of the repositioning actions, Citi expects to either sell or significantly scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay.

Consistent with Citi’s strategy of focusing on the 150 cities that have the highest growth potential in consumer banking, Citi will optimize its branch footprint and further concentrate its presence in major metropolitan areas. The markets affected by the reductions include Brazil (14 branches), Hong Kong (7), Hungary (4), Korea (15), and the United States (44).

Citi will continue to invest in its franchises in these countries to serve its targeted consumer segments. After this repositioning, Citi will have more than 4,000 retail branches around the world and all of the aforementioned countries will continue to be served by our institutional businesses.

Citi Holdings: Citi Holdings is expected to eliminate approximately 350 positions and incur approximately 5% of the repositioning charges. Most of the repositioning charges are related to branch rationalization in Greece and Spain.

Corporate/Other: About 25% of the announced repositioning charges are expected to be incurred in Corporate/Other.

• Operations & Technology: Citi’s Operations & Technology function is expected to achieve greater efficiency through increasing standardization and the use of automated processes; streamlining the organizational structure; and consolidating functions and moving certain positions to lower-cost locations. In addition, there will be a consolidation of certain locations in Citi’s real estate portfolio. In addition to the reductions in Operations & Technology positions that support the ICG and GCB businesses, these actions will result in the reduction of approximately 2,300 positions that support corporate services, real estate, and Citi Holdings.
• Global Functions: Roughly 300 Global Functions positions will be eliminated as a result of efficiency savings.

"Citi has come a long way over the past several years. We have been consistently profitable; our capital strength is among the highest in the industry; and we have shed hundreds of billions in assets and businesses that are not core to our strategy. We will continue to seek ways to optimize the execution of our strategy to better serve our clients and deliver results for all of our stakeholders," concluded Mr. Corbat.

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Citigroup, the third biggest U.S. bank, said in a press release today that it's axing more than 11,000 jobs and expects to take a $1 billion pre-tax charge in the fourth quarter. 

Of course, the bank doesn't call these layoffs or cuts, but refers to them as "repositioning actions" to "improve efficiency." 

But the release goes beyond that. It's not just that the bank uses jargon, but that it talks about branch counts in key areas as being representative of optimism and growth.

Take this section for instance where the bank talks about these countries and cities as areas of growth potential yet is cutting thousands of positions there. (Emphasis ours)  

Global Consumer Banking (GCB): Approximately 35% of the fourth quarter repositioning charges are expected to be incurred in Global Consumer Banking, resulting in a reduction of approximately 6,200 positions, of which approximately 40% are in the Operations & Technology functions that support the business. As a result of the repositioning actions, Citi expects to either sell or significantly scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay.

Consistent with Citi’s strategy of focusing on the 150 cities that have the highest growth potential in consumer banking, Citi will optimize its branch footprint and further concentrate its presence in major metropolitan areas. The markets affected by the reductions include Brazil (14 branches), Hong Kong (7), Hungary (4), Korea (15), and the United States (44).

Citi will continue to invest in its franchises in these countries to serve its targeted consumer segments. After this repositioning, Citi will have more than 4,000 retail branches around the world and all of the aforementioned countries will continue to be served by our institutional businesses.

Get that? In the cities that have the highest growth potential, it's "focusing" by reducing branches.

That's not all.  Check out new CEO Michael Corbat's statement in the release. (Again, emphasis ours): 

"These actions are logical next steps in Citi's transformation. While we are committed to-- and our strategy continues to leverage-- our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns. And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations."

The market seems to be reacting well, though. Shares of Citi were last trading up more than 3.8%. 

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Over the past few weeks, the heads of Wall Street and Corporate America have been going to Washington to advise on fiscal cliff talks.

But the talks draw on, with Republicans and Democrats muddling through a confusing negotiation process that, to many, seems like it's going nowhere. The question is, then, why aren't all these big names and great minds capable of coming together to find a solution?

More than that (for about the millionth time) why can't they even seem to understand each other?

Hedge fund manager Mark Lasry was just in Washington, and he purposely or not, answered that question for us.

"The problem in DC is that nobody wants to appear weak," said Lasry.

He went on to explain that the difference between Washington and Wall Street, is that D.C. plays a perception game and Wall Street plays a results game. Wall Street wants its results yesterday, Washington wants to play the perception game (and win) until it's absolutely necessary to get results.

In the fiscal cliff's case, that means Lasry expects a deal to get done, but not until the last moment. That's why his hedge fund, Avenue Capital, is holding 20-25% cash (as opposed to 15%) to buy some assets at the end of the year. He expects markets to go down as the talks draw on.

Bottom line: Wall Street and Washington are playing totally different games with different rules and a different way of winning. Makes sense.

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This is the second bit of compensation news we've gotten today, and it's not good for JP Morgan bankers.

Bloomberg reports that JP Morgan's bonus pool for corporate and investment bankers will drop as much as 2% this year.

From Bloomberg:

The amount in the pool won’t be set until after the company closes out 2012 and the decline could narrow, said the people, who requested anonymity because the talks are private. Year-end bonuses at New York-based JPMorgan, the biggest U.S. bank by assets, are determined primarily by the performance of the company, followed by the division and individual employees, the executives said.

An executive also told Bloomberg that this shrinkage is an attempt avoid layoffs.

The first bit of compensation news we heard was not as grim. Morgan Stanley announced that it would be restructuring the way it pays brokers to reward them for growing assets and loans rather than for bringing in revenue.

The idea, says Reuters, is to "to grow fee-based accounts and increase loans to its advisory clients."

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This just breaking over the Bloomberg, legendary businessman Saul Steinberg has died.

Steinberg is best known for using his computer leasing company, Leasco, to take over the much larger Reliance Insurance Corporation in 1968. His son Jonathan is married to CNBC reporter Maria Bartiromo. His daughter Laura was once married to Jonathan Tisch.

Steinberg founded Leasco in 1961 after graduating from the University of Pennsylvania, Wharton. The company went public in 1965.

The takeover of Reliance Insurance cemented Steinberg's status as a corporate takeover legend, though he did have setbacks. He failed to take over Chemical Bank in the 1960s and Disney in the 1980s.

Another success — Steinberg was involved in the creation of Spanish language station, Telemundo in the 1980s.

But the 90s were rough on Steinberg. His company suffered with the collapse of the junk bond market, and he suffered a stroke in 1995.

His ex-wife (the 2nd of three and mother of Saul's children) Laura, told NY Magazine:

"Saul before and Saul now -- it's two different people," says Laura Steinberg. "The first few days, his doctors didn't know whether he would die. It took him three days to stabilize."

Says a Steinberg acquaintance: "Saul Steinberg's massive stroke was the most underplayed bit of news in the world. Nobody really wanted anybody to know how ill he was. It would be bad for business."

Indeed the news was unknown until it was leaked to CNBC.

Reliance when bankrupt in 2001, and Steinburg was forced to sell 740 Park Avenue duplex (which he bought from the Rockefellers) to Blackstone's Steve Schwarzman for $37 million (the highest price paid for an apartment in NYC at the time). He also sold 61 Old Masters and 293 lots of furniture at Sotheby's.

From NY Mag:

On April 4, Saul Steinberg and his wife, Gayfryd, threw open the mahogany doors of their 17,000-square-foot Park Avenue aerie for the very last time. At noon, 200 students from the New York School of Interior Design began trooping through the cavernous salons and sitting rooms to gape at the Old Master paintings and elaborate antiques -- the British rococo chairs and ormolu tables, the Chinese armorial porcelain -- that were all soon to be sold.

Later that evening, once the students had dispersed, the Steinbergs descended from their bedroom to host a cocktail party for 150, a tribute to their late friend and decorator Mark Hampton. By Steinberg standards, it was a rather spartan affair, featuring just canapés and cocktails. Saul, 61, shuffled from room to room before retiring early, while Gayfryd -- wearing an Indian-inspired Oscar de la Renta jacket over a T-shirt -- lingered downstairs, chatting up Blaine Trump and Mica Ertegun.

"They tried to make it cheerful and upbeat," says Duane Hampton, the decorator's widow, "rather than a sad we're leaving kind of thing."

Our condolences to Steinberg's family.

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This article has been edited for foul language.

So last weekend, I decided to get drunk because I had a rough week. The typical…lack of sleep, lack of social life, and lack of sex. I wanted to have fun tonight, regardless of my state of mind. I could have easily went back home and fell asleep in 5 minutes, but fuck it. It’s Friday night, and once the night starts, your sleep always goes away. Pull phone out, let the fun begin.

11:00pm – Text my college friends who work at a local tech/mobile app start-up. “Let’s drink.” 2 minutes later, I get a text – "F**k yeah.”

11:15pm – MD tells me to research about a company who makes some weird semiconductor. Looks really ...really boring. Can’t believe they make over $10mm net each year. I do this for about 25-30 minutes, knowing that the deal probably won’t go through. Just a minor distraction…not phased...

12:05am – I realize that I’m retarded. I can save time by mass texting like 30 people. I wait. Half of them can’t go. Screw them.

12:45am – Oh s**t. I forgot to send out an important e-mail. Should I send it out now, or not? It’s over 3 hours later, which is an eternity in banking. I decide to send it out now. If the seniors ask about it…I’ll just say I forgot to add them to the e-mail. No big deal.

1:00am – Looks like there’s not much work to do. People are packing up and leaving. Most of the seniors have already gone out, probably also started drinking. I check my phone. About 10 people message me back. Three of them are already at the local club/lounge.

2:00am – Finish up some more s**t, and just leave. Wow this is early. Hell yeah.

2:20am – Show up at the bar and say “Sup” to a bunch of the people at the table. There’s a few people I don’t know. They’re girls. They’re hot. Yes.

2:25am – The hell. I spot my MD at the table across the room, with two other guys. There’s a s***load of drinks there. Probably want to avoid saying hi because it’s just awkward.

3:00am – Drink 3 shots in a row of Grey Goose. Not enough...

3:30am – Damn, my MD has spotted me. And he has shots poured. Not one, not two. There’s 3 people at the table. And me. They’re really...drunk. Have to drink three more shots of some nasty s***....Some form of old rum that basically kills my throat.

Don’t know the time. Next thing I know, we’re at my friend’s apartment and there’s a party. Beer pong, Kendrick Lamar on the radio, and random people. Where... am I? I only remember 5 things at this point.

1. Two girls were making out and the corner group was cheering them on. They are ugly, but beer goggles....nope still a 6/10 and I'm being really generous.

2. A few of my friends are playing beer pong. They’re good. I’ve never seen them lose playing together.

3. Where are my co-workers? One of the girls is taking shots with two super creepy looking guys...

4. My other co-worker, we’ll call him Adam. He apparently cut his lip while shotgunning a beer...Still, I feel bad for him. Can’t do s***t though. He leaves with a few guys to get more beer and a bandaid across the street to the local store. You can’t even buy liquor at this hour…

For the rest of this story head to Wall Street Oasis>

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