Internship jungle for MSCF '08

Now that January is over, I wrote to my friend Hannah at CMU (she is MSCF '08) and asked her how the internship scene has been for MSCF'08ers and from what I could gather, things are roughly the same as they were last year (the subprime crisis had not not revealed itself fully by Jan-end '07). Roughly the same proportion of the '08 class has internship offers at the end of Jan'08 as the the '07 class did at the end of Jan'07. So, it does not look like internships have been too adversely affected. Yet.
A positive sign has been the robust hiring from Lehman Brothers Asia and DB London, though DB NY has cut back a bit. Also, this time around, State Street and and RBS have dipped their toes in the water, for the first time. And so has Goldman Sachs. So, going forward, the following questions present themselves.

• Going forward, will the softness in the markets do in those who are still without offers?
• And what about internship to full-time job offer conversion percentages? Will the yield fall for this batch?
• And, of course, how are things at the other top-tier US programs? (UCB, NYU, Columbia and Stanford)
• What about the second-tier programs like Chicago, IIT, GaTech, Rutgers et al?

Perhaps some readers can shed some light into this.

Hard Times in Computational Finance

OK, so the shit really has really hit the fan. I graduated from CMU's MS in Computational Finance in Dec. 2007 and unlike the previous graduating class, few of us in the class of '07, had multiple offers. I was lucky to have had a good internship with Merrill Lynch commodities and they extended an offer to me and I lapped that up. Others in my class did the same, tho' I believe I am the only commodities guy from my class (the rest of the class ended up in fixed income, the traditional stronghold of financial engineers; equities and the buy side). However, when I graduated, about 20% of the class had not yet received any offers. Things have not been this bad since 9/11 KOed the economy last time. The only difference: no investment bank has withdrawn offers this time because once you go down that path, your job offer becomes the job offer of last resort. That's a black eye that takes a bank years to overcome and they get only the shittiest of candidates accepting their offers.

We have 3 categories of people here.

1. Got the job they wanted
2. Got a job but far from ideal
3. Got no job or did not accept the offers that came their way

Let us dwell into each category

1. Got the job they wanted: Pretty uninteresting. Let's move on.
   
2. Got a job but far from ideal: I know plenty of these guys. I know someone who got a buy-side job when he really wanted a sell-side job; someone who got neither his dream job nor a signing bonus; those from China who wanted to work in the US but were forced to look for opportunities in Tokyo, Singapore or Hong Kong.
3. Got no job or did not accept the offers that came their way: Obviously most in the class of 2007 landed jobs but the class of 2006 had a near 100% placement record with many people with multiple offers, but I digress. I know of a couple of PhDs who did not have job offers by graduation time (I don't know if things have changed since then).

CMU MSCF is not alone in these hard times. One look at the posts in the global derivatives forum (especially this thread) shows that the Stanford program (which I personally view as a kludged program into Stanford's PhD program), NYU Mathematics of Finance (an excellent program), Berkeley MFE (another excellent program) have all been affected.

Does this mean the party is over? I have no reason to believe so (except for those in MBS-backed CDOs, these jobs are gone for a good 5-years or so). There still remains the rest of fixed-income, foreign exchange, commodities (which is still primitive compared to FI and FX and hence there is a lot of room for innovation) still have good growth potential.