I recently heard this term and don’t know what it is.
I’ve been noticing a lot of your posts and I’m just going to be honest here, if you really want to get into the asset management industry (as your username implies) you are going to need to work on your independent research skills. I understand this forum is a great resource for learning about the industry, but seriously googling the term “structured credit” yields about 500,000 hits. If you want to have even the slightest hope of breaking into this business you should be voraciously reading as much as you can through the internet, the press, textbooks, etc. When you come across something you don’t understand, work as hard as you can on your own to figure it out before asking others for input. Then you come to the table with proper basis for a discussion and intelligent questions. Ultimately independent research and intense intellectual curiosity are what this business is all about and your posts don’t really convey that to me, asking such a broad, basic question like this is just lazy. I think you need to think about that because it will come across in an interview.
They are evil instruments of mass destruction. As the posters said, there is plenty of information out there about it.
That is what brough down financial firms to their knees.
sha-na-na-na-na-na-na-na-na-na-na-na-na-na-na-na knees! kneeeeeeeeees!!!
Is there any difference between Structured Credit and Structured Finance?
Bond+derivatives -among other uses allows money managers to bypass restrictions.
Big Nodge Wrote: ------------------------------------------------------- > I’ve been noticing a lot of your posts and I’m > just going to be honest here, if you really want > to get into the asset management industry (as your > username implies) you are going to need to work on > your independent research skills. I understand > this forum is a great resource for learning about > the industry, but seriously googling the term > “structured credit” yields about 500,000 hits. If > you want to have even the slightest hope of > breaking into this business you should be > voraciously reading as much as you can through the > internet, the press, textbooks, etc. When you come > across something you don’t understand, work as > hard as you can on your own to figure it out > before asking others for input. Then you come to > the table with proper basis for a discussion and > intelligent questions. Ultimately independent > research and intense intellectual curiosity are > what this business is all about and your posts > don’t really convey that to me, asking such a > broad, basic question like this is just lazy. I > think you need to think about that because it will > come across in an interview. QFT.
Do you work at Bear Stearns?
I apologize if my question is too broad. Actually what i intend to ask is: is the job prospect for structured credit is very bad as many people told me to run from it. However, isn’t that job going to be hot when the market picks up as so many run away from it now.
AssetMgrWannabe Wrote: ------------------------------------------------------- > I apologize if my question is too broad. Actually > what i intend to ask is: is the job prospect for > structured credit is very bad as many people told > me to run from it. However, isn’t that job going > to be hot when the market picks up as so many run > away from it now. Well…the market is so bad that there was talk of there not BEING a Structured Credit market. That won’t happen as it makes sense the securitization of assets. CDOs are likely done. Stay away from it.
thepinkman, I am a bit confused with your response. You mean the whole structured credit market is going to be gone – no jobs or just CDO is a goner?
That is a much more reasonable question. I agree with the pinkman, the structured products market won’t go away completely becaue securitization is a beneficial piece of the financial markets, when done correctly and with some amount of disicipline. However, it will look drastically different than it did in 2006, with lower volumes and much more vanilla structures. That generally means less fees and less money to be made, and therefore fewer jobs. This will be an area that is shrinking at most banks on the street, so probably not the ideal time to join.
My guess is that structured credit/finance will continue to exist, since there are situations where it may make sense to do, but it got massively overdone without appropriate risk controls in recent years so people are shying away from it. When the overall market recovers, though, there will be tons of structured finance people who are/were laid off and have experience. It doesn’t make a whole lot of sense to try to compete with that crowd in a recovering market - about the only benefit you’d have is the ability to say “I didn’t screw up because I wasn’t there”, but the other guys will be able to say what they did and how they would avoid messing up again. Seems to me that it would be better for a newbie to compete elsewhere in the industry.
Structured Finance: Get the collateral. Issue the debt. Earn the fees. Sleep well because the underlying is triple A. Repeat.
2nd tt! Big Nodge Wrote: ------------------------------------------------------- > I’ve been noticing a lot of your posts and I’m > just going to be honest here, if you really want > to get into the asset management industry (as your > username implies) you are going to need to work on > your independent research skills. I understand > this forum is a great resource for learning about > the industry, but seriously googling the term > “structured credit” yields about 500,000 hits. If > you want to have even the slightest hope of > breaking into this business you should be > voraciously reading as much as you can through the > internet, the press, textbooks, etc. When you come > across something you don’t understand, work as > hard as you can on your own to figure it out > before asking others for input. Then you come to > the table with proper basis for a discussion and > intelligent questions. Ultimately independent > research and intense intellectual curiosity are > what this business is all about and your posts > don’t really convey that to me, asking such a > broad, basic question like this is just lazy. I > think you need to think about that because it will > come across in an interview.
bchadwick Wrote: ------------------------------------------------------- > My guess is that structured credit/finance will > continue to exist, since there are situations > where it may make sense to do, but it got > massively overdone without appropriate risk > controls in recent years so people are shying away > from it. > > When the overall market recovers, though, there > will be tons of structured finance people who > are/were laid off and have experience. It doesn’t > make a whole lot of sense to try to compete with > that crowd in a recovering market - about the only > benefit you’d have is the ability to say “I didn’t > screw up because I wasn’t there”, but the other > guys will be able to say what they did and how > they would avoid messing up again. > > Seems to me that it would be better for a newbie > to compete elsewhere in the industry. Not so sure I agree with this. Although these things sound fancy, the actual work is fairly cut and dry and anyone with a moderate financial background is well qualified for an entry-level position. Having had experience specific to structured product will not come close to trumping experience with the collateral. In other words, if you have a background in commercial real estate trumps a background in structured products for a CMBS job. I’d imagine in trading, having a background in FI trading trumps a non-trading background in structured products… In terms of the market coming back, I agree with Spierce in that it may return, but it will not be as big as it was getting. On one hand, banks made good money on these things while the market was doing well; however, when the market tanked, they were stuck with all the loans that they couldn’t sell and were, therefore, forced to write them down. Furthermore, these things sat on the books, which placed huge limits on originations, which inevitably led to borrowers flocking to portfolio lenders over securitization shops. In the end, banks realized that the business isn’t as low-risk as they thought it was, so it should play a proportionally smaller role.
I’d bark up a different tree if I were you, AssetMgrWannabe. It seems you barely even know what structured credit is, and there are plenty of very seasoned professionals who are out of work right now. Basically, the industry is a sea of unemployment now, and this includes very smart and knowledgeable people (albeit some of the folks who got us into this mess in the first place). With the exception of some wannabe opportunity funds (some of which have already folded!), there isn’t much hiring going on, and there’s tons of competition. The questions you’ve asked thus far don’t lead me to believe you’d be one of the “lucky” few to get an entry-level job in this area right now.
I guess my point is ignore the term “structured finance” when it comes to viewing a job posting. Servicing residential mortgages would suck whether you’re working for someone who sells their loans or holds them. In other words, the same type of analysis is done whether the lender is selling loans or not, so it shouldn’t be your main concern when applying for a job…