However, more interesting to me was the first comment on the article:

Anyone who considers getting into a trading house must understand such a career decision at an early stage of a graduates career would be a CV “Buster”. If one is considering going into an Investment Bank after starting his career at a prop trading house, well you must realise that banks will immediately throw your application into the bin once they see prop trading work experience.

The comments after that argue the case against this, but personally, I’d have to say that the initial comment wasn’t descriptive enough to state anything definitively. Are we talking about entering prop trading divisions? Or are we talking about other IB divisions? If it’s the former, it is hard to see objectively why prop trading house experience is detrimental. After all, trading experience and flair, plus the necessary attitude are certainly the most crucial determinants of a good trader regardless of where you go. The only thing possibly detrimental could be the working culture, where it may be possible that teamwork is less emphasised at prop houses compared to investment banks.

But well, it’s just my opinion.

Thank god for Qtstalker then, as this open-source TA package packs a mean punch (and development is back on track too!). A whole pot of options is available, all the way from custom indicators to backtesting and a paper trading mode (haven’t tried this yet but it seems like a good idea for beginners in the art ).

A Windows equivalent would probably be Quotetracker, though there are certainly differences in terms of power and their user interfaces. In my opinion, Quotetracker’s UI is a level above Qtstalker, and that’s probably the key benefit from having a large user base. But while Quotetracker comes packed with a fixed set of indicators (more are added in every release or so though), Qtstalker has a scripting facility to create your own custom indicators. Backtesting is also another advantage Qtstalker has over Quotetracker.

More importantly, Qtstalker is absolutely free. No registration/subscription necessary to unlock longer backfills and historical charts unlike Quotetracker. But in terms of real-time feed and trading account support, Quotetracker definitely has the edge. Nevertheless, both easily draw upon end-of-day data from Yahoo and CSV files.

Overall, I would say that Qtstalker is pretty good if you’re looking for a pure analysis package. It’s also ideal for beginners given that it draws free EOD data from Yahoo and has a paper trading mode. So, if you’re on Linux or dual-boot a distribution or two, give it a look.

• BullBearings: Allows you to trade equities, CFDs, and FX. Also allows you to spreadbet virtually. While aimed at the UK market, anyone from anywhere can participate (though you might be ineligible for prizes). Competitions occur from regularly from time to time, but you can still use it to practice anytime.
• Merrill Lynch Investment Challenge: This is for European university students only, but you can practice trading both equities and futures in this competition. Runs from Jan 7 to Jan 31, with a first prize of 4000 euros (after winning at the final round) and a 1-week spring internship with Merrill Lynch.

CFDs

• marketindex 2007 Trading Championship: Runs from Nov 29 to Dec 18 with a 5000 pound first prize. Only UK and Swiss residents can win prizes, but anyone can participate.

• optionsXpress Virtual Trading: Allows you to virtual trade options. But this is just a practice account, so no prizes for doing well!

£17 billion of lost productivity every year due to this seems a bit big, but heck, bad eating habits are certainly worth the overexaggeration to highlight in my book.

More interestingly, they say that only “…a total of 92 percent of employees have lunch…”, and one wonders how many of the remaining 8% are traders at financial institutions…

Both Reuters and Wikipedia have done the hard work for us. I’ll just add a bit at the end on this month’s news.

• Reuters: Timeline - A crisis in credit. More visual than Wikipedia’s version, but not as detailed.
• Wikipedia: Subprime crisis impact timeline. Includes a breakdown by week for 2007, and a review of the crisis’ impact so far on major firms.

Okay, so what has happened since the articles above were written?

1. Nov 24: Small-town municipality in Norway suffers significant losses from credit-linked financial products.
2. Nov 23: CIFG becomes the first specialist insurer to need a bail out.
3. Nov 7: Morgan Stanley takes a USD3.7 billion hit due to its mortgage-related exposures, which could obviously still get worse.

None of the above seem terribly exciting, but then, that’s only in comparison with what has already happened thus far.

P.S.: A rather detailed .pdf timeline from December 2006 onwards by the US Joint Economic Committee might also be of interest.

Also, mergers and acquisitions (M&A) can fall under CorpFin (and indeed does under the textbook corporate finance definition), but banks usually separate out M&A into a group of its own, with CorpFin being the umbrella group for the remaining corporate finance activites. In both groups, there is usually subdivision into industry subgroups (e.g. healthcare, IT, etc.) and product subgroups (e.g. debt capital markets, equity capital markets, etc.) given the importance of sector or product knowledge.

So, all this means that among the things done by the corporate finance group are:

• Advising companies on their financial needs
• Advising companies on their capital structure and working capital management
• Advising, distributing and underwriting equity offerings, e.g. Initial Public Offerings (IPOs), private placements, etc.
• Advising, distributing and underwriting debt (or more generally, fixed income) offerings

Okay, so what do these banks do? Among others, they:

• Take deposits from individuals and institutions, and pay interest on them.
• Lend money, whether in the form of overdrafts (short-term) or longer-term loans (e.g. mortages on houses).
• As an extension to the previous point, these banks also provide credit card services.
• Provide trade finance and other services to companies.

It is important to note that commercial banks serve both individuals and companies/organisations/governments. The former is called retail banking, while the latter is called wholesale banking.

If you want to be in the shoes of the former interviewee, then make sure you check out the various IB interview resources below. More will be added as they are discovered and evaluated.

General Resources

• Vault: Intro to Investment Banking Interviews
• Vault: The Skinny on Analyst Interviewing Questions
• eFinancialCareers: Interview Insiders - Do Not Make These Mistakes

Specialist Resources

• eFinancialCareers: How to Face Interview Curve Balls
• Vault: Interview Questions: Brainteasers

Books

• Vault Guide to Finance Interviews

Knowledge/Research

• Cornell University: Investment Banking Interview FAQ
• Vault: A Week in the Life of an Investment Banking Analyst

• October 2006: Facilitated by a fixed income quant (who joined Barclays Capital from a 10-year engineering background) and a 3rd-year PhD student.
• April 2006: A relatively short discussion with the Head of Convertible Bond Research at BarCap facilitating.
• May 2005: A couple of final stage PhD students answer questions.

All you need to know about the City describes the people and institutions working in one of the world’s most renowned financial districts - London - as well as what and why they do what they do. It is a book suitable for both newcomers to the industry, and industry veterans who simply want to review areas they rarely touch. It’s particularly useful for those going for interviews, meetings or networking events and need to sound informed!

In only 224-pages, the book weaves a connected and coherent explanation of why the industry exists, to its key activities, its players and later, to the slightly more complex area of the financial markets and the various instruments involved. Need to know what an M&A bid timetable looks like? Or maybe you really just need to know what the hell an investment bank actually is and does?

All this is done in the 3C, i.e. concise, clear and conversational writing, with jargon always explained, and supported with relevant and recent case studies (from the financial meltdown of the 1980s to manager incentives).

If you think you could benefit from understanding the intricate web of activity that is the City, then give it a look at your local bookstore or at Amazon.