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How Will Greg Smith Affect Wall Street Recruiting?

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Last November, I wrote about the ongoing backlash -- mainly on Op-Ed pages, at that point -- against Wall Street recruiters at several elite feeder schools. Suddenly, finance’s position as the industry of choice in the Ivy League looked shaky, at best.

As most people are probably aware at this point, earlier this week Wall Street took a hit on the Op-Ed pages of a paper slightly larger than the Stanford Daily. The complete fallout from former Goldman Sachs (GS) exec Greg Smith’s letter is unclear, but it stands as another in a long line of PR nightmares for the finance industry.

Let’s, for fun, compare a line from Smith’s Op-Ed to one from a university columnist. Here’s Smith’s now famous: “I can honestly say that the environment now is as toxic and destructive as I have ever seen it.” And here, from a Dartmouth columnist: “Should this be the goal of the valedictorians of Ivy League institutions? No matter how hard I try, I cannot think of more pathetic ambitions.”

Take out identifying nouns like Ivy League and the two could almost come from the same piece. At the very least, there seems to be a similar sort of distrust and contempt for finance in a college student as there is in a twelve year, possibly “disgruntled” employee.

Yesterday, the Times Dealbook ran a piece covering ongoing recruiting issues for Wall Street. The percent of graduates from elite schools headed to finance -- though still very high -- has been down for a while (from 28% in 2008 to 17% last year at Harvard, for example).

This year, students at Yale, Princeton and Harvard protested finance recruiters on campus and pressured their peers to look elsewhere for employment. At my alma mater (which, coincidentally, just beat Harvard by nine in the tournament, go ‘Dores) students plan to hold their own Occupy protest starting this Monday.

The Times points out that the tech industry has stepped in as many students career of choice. Google (GOOG), Apple (AAPL) and Facebook are now the first pick among post-college employers, the highest ranked bank JP Morgan Chase (JPM), sits at number 41.

A look at university headlines today revealed no mention of Greg Smith, even at Stanford, where he was once, briefly, a columnist. Then again, Wall Street’s recruitment issues existed before Smith’s Op-Ed. He may have just made them slightly worse.
POSITION:  No positions in stocks mentioned.