Volume 4 Issue 1- Final

BRUIN BUSINESS REVIEW

DEAR
READERS








3




4




5

Welcome
to
a
new
year
of
Bruin
 Business
Review.
‐
A
le2er
from
the editor.

CALENDAR
 





Jump
start
your
career
by
checking out
these
events
all
month
long.

NEWS
OF
THE
WEEK
 Obama
announces
yet
another housing
bailout

NEWS
BRIEFS





INVESTMENT
BANKING


6 8







An
overview
of
the
investment banking.

CONSULTING























10

















12

An
overview
of
consul?ng.

ACCOUNTING


An
overview
of
accoun?ng.

SCHOOL
PROFILE





14











Featuring
USC
Marshall
School
of Business.

CAREER
TIPS



16



























Teaching
the
basics.

INTERVIEW
 


The
highly
an?cipated
Q&A
with Professor
McDevi2.

18

INSIDE 

THE
FINANCIAL
CRISIS















19 



Read
the
general
overview
on
the
financial
crisis, 



it’s
global
impact,
and
how
it
may
affect
you,
the 



student.

BRUIN
BUSINESS
REVIEW
2

DEAR
READERS,

LETTER
FROM
THE EDITOR

Welcome
to
a
new
year
of
Bruin
Business
Review.
I
would
like
to
take
this
?me
to
warmly
thank
all
our
returning
readers
for
your
 con?nued
support
as
well
as
openly
greet
our
new
readers
who
have
just
joined
our
publica?on.
Since
our
incep?on,
Bruin
 Business
Review
has
strived
to
provide
you
with
up
to
date
informa?on
that
is
per?nent
to
your
future. Bruin
Business
Review
has
established
itself
as
the
premier
free
business
magazine
at
UCLA.
With
every
volume
and
every
issue,
 we
seek
to
work
with
the
student
body
to
publish
content
that
is
aimed
at
providing
students
with
the
informa?on
needed
to
put
 them
one
step
ahead.
This
may
tackle
any
issue
from
recruitment
deadlines
to
resume
?ps
or
from
the
financial
industry
to
the
 consul?ng
industry.
Whatever
your
needs,
Bruin
Business
Review
has
been
there
to
provide
them. As
we
begin
a
new
volume,
we
hope
to
con?nue
to
meet
your
expecta?ons
and
more.
To
con?nue
to
provide
the
UCLA
student
 body
with
quality
informa?on,
we
will
be
making
a
few
changes
that
we
feel
will
improve
our
overall
content.
In
an
effort
to
keep
 each
issue
even
more
relevant
to
students,
we
will
be
establishing
new
sec?ons
dedicated
to
investment
banking,
consul?ng,
and
 accoun?ng.
In
addi?on,
we
will
provide
you
with
industry
and
career
profiles
with
each
issue
to
keep
you
informed
of
what
 opportuni?es
are
out
there. These
changes
come
as
Bruin
Business
Review’s
main
goal
is
to
serve
you.
To
help
us
do
this,
I
would
like
to
encourage
you
to
 con?nue
sending
in
recommenda?ons
as
to
how
we
can
improve
our
publica?on.
It
is
your
feedback
that
has
helped
keep
us
a
 success. Again
I
would
like
to
formally
thank
everyone
for
their
con?nual
support.
Without
any
further
delay,
I
would
like
to
present
to
you
 our
first
issue
for
the
2009‐2010
school
year.
I
sincerely
hope
that
you
con?nue
to
get
as
much
out
of
Bruin
Business
Review
as
 we
do. Warmly, Benjamin
Lo Editor‐in‐Chief

BBR
STAFF PRESIDENT Sunny
Wong

VICE
PRESIDENT,
FINANCE Eric
Park

EDITOR
IN
CHIEF Benjamin
Lo

ASSOCIATE
EDITORS Cris?na
Carillo

VICE
PRESIDENT,
 OPERATIONS Julie
Chen

COPY
EDITOR Jesus
Heredia

VICE
PRESIDENT,
 MARKETING Chris?ne
Liu

OPERATIONS David
Vayzner

FINANCE Stephen
Moock Jin
Sun MARKETING Stefanie
Ju Robert
Chang Chris
Young Jane
Kim CREATIVE
 DEVELOPMENT Amore2e
Jeng Lona
Zhao

ADVISOR Fred
Kim Dmitry
Shuster



Photo
Credits 

Cover
photo
courtesy
of
Lona
Zhao 

Ar?cle
photos
courtesy
of
 


www.sxc.hu 

Interview
photo
courtesy
of
UCLA 
School
profile
photo
courtesy
of
 
USC

BRUIN
BUSINESS
REVIEW
3

THE
CALENDAR OCT‐NOV
2009

October
27 Jordan
Belfort
–
The
Wolf
of
Wall
Street Host:
Alpha
Kappa
Psi
Business
Fraternity Time:
7pm Loca?on:
Haines
39 Descrip?on:
 Previous
 mul?millionaire
 and
 author
 or
 “The
Wolf
of
Wall
Street”
and
“Catching
the
Wolf
of
Wall
 Street”,
 Jordan
 Belfort,
 will
 give
 a 
mo?va?onal
 speech
 about
business
ethics
and
success. October
27 AITC
Workshop:
Careers
in
Business
Consul?ng Time:
5pm Loca?on:
203
Covel
 Descrip?on:
 Addi?onal
 workshops
 offered
 Nov.
 12
 at
 5pm
and
Nov.
24
at
6pm October
27 Job
Search
Jumpstart:
MBA Time:
Tuesday
4‐8pm Loca?on:
Strathmore
Bldg. 1st
Floor,
Room
117 October
28 UCLA
Graduate
and
Professional
School
Fair
2009 Time:
Wednesday
11‐3pm, Loca?on:
Ackerman
Grand
Ballroom Descrip?on:
 Currently
 registered
 UCLA
 Students
 only.
 Bruin
ID
required. November
2 AITC
Workshop
Business
101:
Investment
Banking Time:
5pm Loca?on:
203
Covel Descrip?on:
Addi?onal
workshop
offered
Nov.
19
at
5pm November
3 AITC
Workshop:
How
to
Get
Into
a
Great
MBA
Program Time:
5pm Loca?on:
203
Covel Descrip?on:
Addi?onal
workshop
offered
Nov.
24
at
5pm

November
3 Warner
Bros.
Speaker
Series:
Resumes/Interviewing Host:
Beta
Alpha
Psi
Accoun?ng
Honors
Society Time:
6‐8pm Loca?on:
Bunche
2160
 November
9 AITC
Workshop:
Secrets
to
Applying
to
Graduate
School Time:
5pm Loca?on
203
Covel Descrip?on:
Addi?onal
workshop
on
Nov.
23
at
6:30pm

November
10 Bruin
Internship
and
Summer
Job
Fair,
Fall
2009 Time:
Tuesday
11‐3pm Loca?on:
Second
Floor
Lounge,
Ackerman Descrip?on:
Get
the
chance
to
 meet
up
with
employers
 specifically
 targe?ng
 UCLA
 students.
 For
 currently
 registered
UCLA
students
only.
Bruin
ID
required. November
12 Job
Search
Jumpstart:
For
All
Majors Time:
Thursday
1‐4pm Loca?on:
Career
Center, 3rd
Floor,
Conference
Room November
14 Bruin
Consul?ng
Green
Technology
Case
Compe??on Time:
8am‐8pm Loca?on:
Humani?es
A51 Descrip?on:
 
 Bruin
Consul?ng’s
4th
 Annual
Strategy
 and
 Opera?ons
 Case
 Compe??on.
 Compete
 with
 top
 undergrads
 in
 a
 36
 hour
 compe??on
 to
 develop
 a
 presenta?on
 and
 recommenda?ons
 regarding
 clean
 energy.
 December
4 Job
Search
Jumpstart:
Last
Chance
for
Fall,
All
Majors Time:
Friday
1‐4pm Loca?on:
Career
Center, 3rd
Floor,
Conf.
Rm. *Sign
 up
 for
 all
 AITC
 (Academics
 in
 the
 Commons)
 Workshops
 on
 MyUCLA
and
click
on
“Workshops”.

BRUIN
BUSINESS
REVIEW
4

NEWS
OF
THE
WEEK Obama
Announces
Yet

Another
Housing
Bailout BY
SUNNY
WONG SENIOR
STAFF
WRITER

The
 Obama
 administraUon
 recently
 announced
 a
 new
 housing
 bailout
 program
 to
 bolster
 the
 ailing
 housing
 market.
 Although
 there
 have
 been
 slight
 improvements,
foreclosure
 rates
 are
 s?ll
 increasing
 and
 overall
 housing
 prices
 are
 approximately
 30
 percent
 lower
 than
in
 2007.
Their
 plan
 aims
 to
 assist
 local
 and
 state
 housing
 agencies
to
provide
cheaper
mortgages
 t o
 fi r s t ‐ ? m e
 o r
 l o w ‐ i n c o m e
 homebuyers.
The
administra?on
 hopes
 that
 this
 program
 will
 help
 lower
 income
families
purchase
homes
in
the
 midst
of
this
tough
economic
storm.
 To
 provide
 funding
 to
 these
 housing
 finance
 agencies,
 the
 government
 p l a n s
 t o
 h a v e
 t h e
 T r e a s u r y
 Department,
 Fannie
 Mae,
 and
 Freddie
 Mac
 purchase
housing
bonds.
This
will
 help
 housing
 finance
 agencies
 make
 new
 loans
 to
 poten?al
 homebuyers.
 The
government
 also
plans
to
ins?tute
 a
 temporary
 credit
 program
 so
 that
 these
 agencies
 can
 refinance
 their
 exis?ng
 bonds,
 which
 will
 improve
 liquidity
 access
 for
 the
 outstanding
 bonds.
 
 The
 administra?on
 es?mates
 this
 program
 will
 allow
 housing
 agencies
to
lend
money
to
hundreds
of
 thousands

 of
 Americans.
 The
 size
 of
 the
 program
 will
 depend
 on
 agency
demand.


“Experts
believe
that
 this
new
iniUaUve
 should
only
slightly
 improve
the
housing
 market.” A l t h o u g h
 o ffi c i a l s
 h av e
 s t a t e d


!

taxpayers
 will
 not
 have
 to
 shoulder
 the
 burden
 in
 paying
 for
 this
 program,
 they
 have
not
yet
released
informa?on
on
how
 this
program
will
be
funded.
However,
the
 Treasury
 Department
 is
 responsible
 if
 a
 housing
agency
happens
 to
default
 on
 its
 credit
payments.


“UlUmately,
this
 housing
bailout
aims
 to
enable
these
 homeowners
to
keep
 their
homes.” Experts
 believe
this
 new
ini?a?ve
 should
 only
slightly
improve
 the
 housing
market
 because
 Housing
 Finance
 Agency‐related
 loans
 cons?tute
 a
 very
 small
 por?on
 of
 the
 mortgage
 market.
 (<1
 percent)

 However,
 the
 program
 is
 s?ll
 rather
 significant
considering
it
is
one
of
the
few


ini?a?ves
 that
 directly
 targets
 lower‐
 income
homebuyers. The
 administra?on’s
last
 housing
bailout,
 released
 in
 February,
 seemed
 to
 have
 worked
 rather
 well
 so
 far.
 According
 to
 the
Federal
 Housing
 Finance
 Agency
 and
 the
 Department
 of
 Housing
 and
 Urban
 Development,
millions
of
Americans
have
 been
 able
to
take
advantage
of
 the
lower
 mortgage
 rates,
resul?ng
 in
 an
 increased
 n u m b e r s
 o f
 h o u s i n g
 p u r c h a s e s .

 Ul?mately,
 this
 housing
 bailout
 aims
 to
 enable
 these
 homeowners
 to
 keep
 their
 homes.
 The
 new
 program
 is
 expected
 to
 launch
 around
 November,
 which
 is
 also
 when
 a
 $8,000
 tax
 credit
 for
 first‐?me
 homebuyers
expires.


Check
 out
 more
 News
 of
 the
 Week
 on
 BruinBusinessReview.com

BRUIN
BUSINESS
REVIEW
5

NEWS
BRIEFS BY
AMORETTE
JENG

Winners
of
the
Nobel
 Economics
Prize
2009 On
 October
 12,
 2009,
 The
 Sveriges
 Riksbank
 Prize
 in
 Economic
 Sciences
 in
 Memory
of
Alfred
Nobel
was
presented
 to
 two
 Americans:
 Elinor
 Ostrom
 and
 Oliver
 Williamson.
 Both
 winners
 made
 contribu?ons
 to
 the
 analysis
 of
 e c o n o m i c
 g o v e r n a n c e ,
 o r
 t h e
 regula?ons
that
authority
figures
use
to
 spearhead
 companies
 and
 financial
 systems.
 Ostrom,
 a
 poli?cal
 scien?st
 from
 Indiana
 University,
 is
 the
 first
 woman
 ever
 to
 win
 the
 Nobel
 Economics
Prize
and
the
firh
woman
to
 win
a
Nobel
this
year.
Her
 work
focused
 on
 how
 common
 natural
 resources
like
 grazing
 land
 and
 forests
 can
 be
 used
 successfully
 by
 the
 people
 that
 tend
 t h e m
 w i t h o u t
 g o v e r n m e n t
 interven?on.
Williamson,
an
 economist
 from
 the
 University
 of
 California,


Berkeley
 addressed
 differences
 in
 managing
conflicts
between
companies
 and
 markets
as
 well
 as
when
 and
 why
 efficiency
occurs
in
economic
rela?ons.

they
 obtained
 a
 45
 million
 dollar
 bailout
 and
 are
 currently
 paying
 large
 dividends
back
to
the
government.


Major
Losses
for
 Bank
of
America On
 Friday
 October
 16th,
 America’s
 largest
 bank,
 Bank
 of
 America,
 has
 reported
 a
 steep
 loss
 of
 2.24
 billion
 dollars
 within
 the
 third
 quarter.
 This
 loss
 coincides
 with
 the
 bank
 CEO,
 Ken
 Lewis’,
last
 year
 of
 employment
 before
 re?rement.
As
of
now,
the
company
has
 yet
 to
 reveal
 who
 the
 succeeding
 CEO
 will
 be
 to
 undertake
 this
 enormous
 financial
 burden.
 The
 mortgage
 and
 credit
 card
 divisions
 of
 the
 bank
 were
 hit
the
hardest
 as
lenders
are
finding
it
 increasingly
 difficult
 to
 pay
their
 loans
 back.
 However,
 bad
 loans
 have
 decreased
 in
 severity
 compared
 to
 previous
 losses.
 What
 remains
 in
 ques?on
 is
when
the
bank
will
be
 able
 t o
 p u l l
 i t s e l f
 o u t
 o f
 fi n a n c i a l
 dependence
 on
 the
 government
 since


Social
Networking
 Effects
on
Small
 Business
 A
 recent
 study
 from
 Internet2Go
 and
 Merchant
 Circle
 indicates
 that
 almost
 half
 the
 small
 businesses
 surveyed
 use
 social
 networking
 sites
 for
 like
 Twi2er
 and
 Facebook,
 to
 increase
 their
 publicity.
This
form
of
adver?sing
is
not
 only
 free,
 but
 also
 incredibly
 effec?ve
 due
to
 the
 speed
 and
 vastly
increased
 range
of
poten?al
consumers.
However,
 d e s p i t e
 t h e
 i n fl u x
 i n
 p o s i ? v e
 promo?on,
there
are
poten?al
 dangers
 in
 u?lizing
social
networking
sites.
Such
 dangers
 include
 adver?sing
 to
 such
 an
 extent
 that
 consumers
 become
 annoyed
 or
 the
 fact
 that
 cri?cisms
 of
 the
 firm
 are
 for
 public
 viewing.

 However,
 with
 such
 user‐friendly
 technology,
businesses
are
now
able
to
 bridge
 the
 gap
 between
 themselves
 and
their
consumers.


Six
Face
Charges
on
 Insider
Trading Billionaire
 Raj
 Rajaratnam,
 founder
 of
 the
 Galleon
 Group,
 and
 five
 others,
 including
 execu?ves
 from
 Intel
 and
 McKinsey
 &
 Co.,
 were
 arrested
 for


BRUIN
BUSINESS
REVIEW
6

connec?ons
 to
 what
 U.S.
 A2orney
Preet
Bharara
stated
is
 the
 largest
 hedge
 fund
 insider
 trading
ever.
They
were
charged
 for
 pocke?ng
 over
 20
 million
 dollars
 in
 illegal
 profits
 by
 obtaining
 informa?on
 about
 businesses
 like
 Google
 Inc.
 and
 Hilton
 Hotels.
 The
 illegal
 ac?vi?es
 were
 supposedly
 conducted
 during
 July
 of
 2007
 and
 were
 discovered
 through
 first
 ?me
 ever
 court‐authorized
 wiretaps.


Asian
Countries
 Dominate
 Broadband
 Services A
 recent
 study
 of
 broadband
 services
by
University
of
Oxford,
 England
and
University
of
Oviedo,
 Spain
and
supported
by
Cisco
evaluated
 66
countries
and
 240
ci?es
to
 find
 that
 South
 Korea
 has
 come
 out
 on
 top,
 bea?ng
out
 Japan,
the
 previous
 leader,
 as
the
 main
 broadband
 service
 na?on.
 South
 Korea,
with
a
total
of
 97%
wired
 households,
 has
 had
 a
 massive
 improvement
 in
 the
quality
 and
 speed
 of
 internet
 services.
Following
Japan
 in
 third
 place
 is
 Hong
 Kong
 and
 then
 S w e d e n ,
 S w i t ze r l a n d ,
 a n d
 t h e
 Netherlands.
The
 United
States
 has
not
 made
it
 into
 the
top
10
and
is
included
 in
 the
second‐highest
category
which
is
 defined
 as
 having
 a
 “comfortable”
 average
 internet
 connec?on.
 This
 was
 an
 improvement
 compared
 to
 the
 previous
 year
 in
 which
 the
 survey
 stated
 that
 the
 United
 States
 had
 services
that
were
barely
sufficient.

Dow
Hits
10000 Last
 week,
 Dow
 Jones
 Industrial
 Advantage
 reached
 above
 10,000
 for
 the
first
 ?me
 this
 year.
This
 came
 as
a
 shock
 to
 investors
 in
 the
 midst
 of
 a
 deep
 recession.
 Since
 March,
Dow
 has


risen
 50
 percent.
 Despite
 this
 posi?ve
 turn
of
events,
the
ques?on
remains
as
 to
 how
 long
 this
 rise
 will
 last.
 Based
 strictly
 on
 stocks,
 it
 appears
 that
 the
 economy
 may
 be
 slowly
 recovering.
 However,
others
argue
that
this
rise
will
 be
 brief
 with
 some
 profits
 based
 on
 cuung
costs,
not
increasing
earnings.
It
 c a n
 a l s o
 b e
 n o t e d
 t h a t
 t h e
 unemployment
 rate
 is
 s?ll
 at
 record
 highs,
 which
 goes
 against
 indicators
 of
 economic
improvement.


To
read
past
News
Briefs,
check
out
 BruinBusinessReview.com

BRUIN
BUSINESS
REVIEW
7

A
GENERAL
OVERVIEW
OF

INVESTMENT
BANKING BY
ERIKA
K.
SOLANKI

Investment
 banking
 is
 one
 of
 the
 most
 a2rac?ve
 and
 yet
 elusive
 career
 op?ons
 for
 students
 interested
 in
 business‐related
 professions.
 Investment
 bankers
 are
 known
 to
 be
 highly
 compensated
and
 to
 work
 long
hours,
but
 how
do
 bankers
rake
 in
 so
 much
 capital
 and
 what
 do
 they
 do
during
those
long
hours?
Many
of
us
have
heard
 about
 dabagirls.com,
Da?ng
a
Banker
 Anonymous,
 a
 Web
 site
 dedicated
 to
 consoling
 the
 significant
 others
 of
 investment
 bankers
 who
 have
 been
 affected
 by
 the
 economic
 recession.
 Many
 of
 us
 have
 also
 seen
 the
 Carlos
 Solis
 character
 on
 the
 ! television
show
Desperate
Housewives
woo
his
wife
 with
 expensive
 getaways
 on
 private
 jets
and
 $300
 perfumes,
 which
 he
 funds
 with
 his
 job
 in
 banking.
However,
 while
 investment
 banking
 may
 seem
 to
 be
 one
 of
 the
 most
 lucra?ve
business‐related
 career
 op?ons,
many
students
 who
 are
considering
pursuing
internships
and
careers
in
investment
 banking
 internships
 do
 not
 have
 comprehensive
 industry
 knowledge,
 and
 without
 that
 knowledge
 they
 can’t
 be
 like
 Carlos
 Solis.
 Candidates
 must
 have
 a
 thorough
 and
 comprehensive
 understanding
 of
 the
 investment
 banking
 industry
to
impress
employers
during
interviews.

“Investment
bankers
are
known
 to
be
highly
compensated
and
to
 work
long
hours...” In
 simplest
 terms,
 investment
 banks
 are
 financial
 intermediaries.
Investment
bankers
serve
 as
a
bridge
between
 two
 par?es
 to
 help
 companies,
 and
 possibly
 governments,
 raise
 capital
 through
 mul?ple
means.
Investment
 bankers
can
 issue
 (or
 underwrite)
 and
 sell
 securi?es,
 which
 include
 primarily
 equity
 (stocks)
 and
 debt
 (bonds).
 In
 addi?on,
 investment
 banks
 provide
 guidance
 to
 companies
 regarding
 mergers
 and
 acquisi?ons
 and
 with
 trading
 different
 financial
 instruments,
such
as
commodity‐to‐equity
securi?es. The
structures
of
investment
 banks
vary
slightly
depending
on
 the
individual
firm;
however,
general
investment
banks
include
 three
 basic
 departments:
 research,
 sales
 and
 trading,
 and
 corporate
finance.



Research Sales
&
Trading Equity,
Fixed


Corporate
Financing M&A,
Capital
Raising,
 Underwri?ng

Generally,
 an
 investment
 bank’s
 research
 department
 thoroughly
researches
specific
 companies,
industries,
and
 the
 economy
and
then
makes
recommenda?ons
about
 the
buying
 and
selling
of
various
financial
products.
The
sales
and
trading
 department,
as
 the
 name
 implies,
 includes
 sales
 people
 and
 traders
who
deal
with
the
selling
and
buying
of
equity
(stocks)
 and
 fixed
 income
 (bonds).
 Sales
 and
 trading
 services
 are
 generally
 for
 ins?tu?onal
 or
 investors
 with
 a
 high
 net
 worth.
 The
 corporate
 finance
 department
 is
 also
 known
 as
 the
 investment
 banking
 division,
 which
 is
 further
 divided
 into
 product
 groups
 and
 industry
 groups.
 The
 product
 group
 includes
 mergers
 and
 acquisi?ons,
 financial
 sponsors,
 and
 leveraged
 finance.
 The
 coverage
 group
 serves
 clients
 from
 varying
 industries,
 including
financial
 ins?tu?ons,
 healthcare,
 and
technology,
to
name
a
few.
 The
 sales
 and
 trading
 department,
 as
 the
 name
 implies,
 includes
sales
people
and
traders
who
deal
with
the
selling
and
 buying
of
equity
(stocks)
and
 fixed
 income
 (bonds).
There
are
 typically
three
types
of
 salespersons.
There
is
the
classic
retail
 broker,
who
 sells
 stocks
 and
 stock
advice
 to
 the
 average
Joe,
 the
 ins?tu?onal
 salesperson,
 who
 works
 with
 large
 ins?tu?onal
 investors,
 and
 the
 private
 client
 service
 representa?ve,
 who
 works
 with
 ultra‐high
 net
 worth
 individuals.
However,
sales
 and
trading
services
in
 investment
 banks
are
generally
for
ins?tu?onal
or
investors
with
a
high
net
 worth. Traders,
on
 the
 other
 hand,
 help
 facilitate
 the
 purchase
 and
 selling
of
securi?es
by
execu?ng
trades
on
behalf
of
a
client
or
 holding
 an
 inventory
 of
 securi?es
 to
 sell.
 There
 are
 two
 primary
 roles
 traders
 play
 in
 a
 bank.
 First,
 they
 help
 clients


BRUIN
BUSINESS
REVIEW
8

provide
liquidity
to
clients
by
execu?ng
purchases
and
sales
of
securi?es.
Traders
make
money
for
the
client
by
selling
securi?es
at
a
 higher
price
from
when
they
purchased
them.
Besides
serving
a
client,
traders
also
execute
trades
on
behalf
of
the
investment
bank,
 which
is
known
as
proprietary
trading.
Traders
aim
to
make
a
profit
using
the
firm’s
own
capital. The
corporate
finance
department
is
also
known
as
the
investment
banking
division,
which
is
what
most
undergraduates
aim
to
get
 into.
The
 division
 mainly
serves
 the
 following
 two
 func?ons:
1)
 mergers
 and
 acquisi?ons
 and
 2)
 underwri?ng.
 The
 mergers
 and


Classification of Investment Banks Bulge Bracket • The largest and most profitable firms • Examples: Goldman Sachs and JPMorgan

Middle Market • Firms dealing with clients with revenues of less than $1 billion • Example: Jefferies & Co

Boutique • Specialized firms with relatively smaller clients • Example: Mercanti Group

acquisi?ons
unit
 advises
companies
on
 mergers
between
 companies.
For
 example,
if
company
A
wanted
to
 purchase
Company
B,
 the
 investment
 bank
 will
 help
 figure
 out
 the
 final
 price
 of
 the
 deal
 and
 make
 sure
 the
 transac?on
 is
 executed
 smoothly.
 The
 underwri?ng
unit
 of
the
investment
 bank
mainly
serves
to
 raise
 capital
 for
 a
 client
 company
either
 through
 equity
(stocks),
debt
 (bonds),
 or
 loans.
An
 investment
 bank
 is
 further
 divided
 into
 product
 groups
 and
 industry
groups.
The
 product
 group
 includes
 mergers
 and
 acquisi?ons,
 financial
 sponsors,
and
 leveraged
 finance.
The
 coverage
 group
 serves
 clients
 from
 varying
 industries,
 including
financial
ins?tu?ons,
healthcare,
and
technology,
to
name
a
few.
 Almost
all
investment
banks
share
the
same
hierarchical
structure.


! Analyst

Associate

Vice President

Managing Director

Lifestyle
as
an
investment
banker
is
especially
difficult
 due
to
the
fast‐paced
 work
environment
and
long
hours.
Investment
 bankers
 working
 in
 corporate
 finance
 and
 research
 usually
 work
 more
 than
 100
 hours
 a
 week.
 Bankers
 in
 sales
 and
 trading
 have
 more
 reasonable
work
hours,
but
they
are
constantly
are
under
a
high
amount
of
pressure.
While
some
believe
the
constant
pressure
and
 fast‐paced
working
environment
give
investment
 bankers
an
edge,
others
believe
the
pressure
is
too
much
to
sustain
a
permanent
 lifestyle,
regardless
of
the
hery
quarterly
bonus.
Consequently,
many
bankers
move
on
to
other
 fields
such
as
private
equity,
hedge
 funds,
and
business
development
arer
their
two‐year
s?nt.

PRODUCT GROUP

MERGERS
&
ACQUISITIONS FINANCIAL
SPONSORS LEVERAGED
FINANCE

SERVES CLIENTS THAT ARE IN DIFFERENT INDUSTRIES INCLUDING FINANCIAL INSTITUTIONS, HEALTHCARE, AND TECHNOLOGY, AMONG MANY OTHERS.

COVERAGE GROUP

BRUIN
BUSINESS
REVIEW
9

INDUSTRY
OVERVIEW: 


CONSULTING

By:
Eric
Park Staff
Writer

WHAT
IS
CONSULTING?

Strategic
consul?ng
focuses 
on
a 
company’s 
external
 factors
and
environment
within
the
client’s
industry.



Consul?ng
 is 
 a 
 high
 profile
 industry
 with
 professionals
from
diverse
educa?onal
backgrounds.
 In
 this
 field,
 professionals
 known
 as 
 consultants
 provide
their
 exper?se 
and
recommenda?ons 
in
 a
 variety
 of
 fields
 such
 as 
 resource
 management,
 li?ga?on,
and
technology.

The
 factors 
 and
 environment
 related
 to
 strategic
 consul?ng
 include 
compe?ng
companies,
 suppliers,
 customers,
 as
 well 
 as
 government
 regula?ons.

 Strategy
 consultants
 will 
 use 
 their
 exper?se 
 to
 recommend
and
implement
a 
plan
of
ac?on
to
help
 a 
 company
 reach
 its 
 goals 
 when
 one
 of
 more
 of
 these
factors
changes.

An
 example
 of
 a
 rela?onship
 analogous 
 to
 consul?ng
 firms
 and
 companies
 that
 use
 their
 services
would
be 
that
 of
 a
doctor
 and
pa?ent.
 
 A
 p a ?ent
 w i l l 
 u s ua ll y
 visit
 the
 doctor
 for
 predominantly
two
reasons,
a
diagnosis 
on
an
illness
 or
 for
a
checkup.
 
Similarly
consul?ng
firms
will 
use
 their
 exper?se
 to
 recommend
 ideas 
 to
 help
 companies 
that
 may
 be
 at
 risk
 for
 large
 losses 
or
 even
 failure 
 or
 to
 promote 
 greater
 efficiency
 in
 a
 stable 
 or
 even
 thriving
 company.
 Government
 bodies 
and
companies 
will 
seek
 consul?ng
 services
 to
 receive 
 advice
 and
 recommenda?ons
 for
 problems
that
they
cannot
resolve
themselves. Consultants 
 primarily
 offer
 their
 services 
 in
 three
 areas
 of
 business:
 Informa?on
 Technologies,
 opera?ons,
and
strategy.
 Informa?on
 Technologies 
 consul?ng
 is
 concerned
 with
 helping
 clients 
 adopt
 new
 technologies 
 to
 improve
business 
efficiency.

Consultants 
in
this 
field
 usually
 have 
 degrees 
 with
 a 
 technology
 related
 concentra?on
 such
 as
 computer
 science.
 
 IT
 consultants
have 
experience 
with
 sorware 
used
 in
 business
such
as
those
produced
by
Oracle
and
SAP. Opera?ons
 consul?ng
 help
 clients 
 improve 
 their
 internal 
workings 
in
areas 
such
as 
human
resources.

 Such
 consultants
 in
 this 
 field
 improve
 a
 client’s
 organiza?on,
processing,
and
produc?on.
 
 They
 will
 not
 only
 make
 recommenda?ons 
 to
 improve
 opera?ons 
but
also
make 
sure 
that
those
ideas 
are
 correctly
executed.

O t h e r
 co n s u l ? n g
 s p e c i a l i za ? o n s
 i n c l u d e :
 management,
 financial
 services,
 li?ga?on,
 human
 resources,
and
healthcare.

FEATURES
OF
THE
CONSULTING
 PROFESSION Consul?ng
 provides 
 a
 wealth
 of
 experience
 in
 different
 business
 fields 
 because
 of
 the
 various
 business 
aspects 
and
range 
of
clients
and
industries
 that
 consultants
work
with.
 
Employees 
are
known
 to
 work
 long
 hours
when
working
 in
the
industry.
 This 
 frequently
 occurs 
 during
 busy
 seasons
 when
 there
are
numerous
clients 
and
projects 
to
manage
 due 
 to
 increased
 demand
 for
 consul?ng
 services
 across
client
industries. This 
profession
requires 
moderate
to
large 
amounts
 of
travel 
as 
teams
of
consultants 
are
some?mes 
sent
 out
 to
 manage
 and
 collaborate
 with
 a
 client
 for
 varying
 lengths 
of
 ?me.
 
 It
 is 
also
 a 
necessity
 for
 professionals
in
this 
field
to
possess 
strong
analy?cal
 and
problem
solving
skills.

BRUIN
BUSINESS
REVIEW
10

ENTERING
CONSULTING Consul?ng
 has
 tradi?onally
 been
 a 
compe??ve
 industry
 to
 enter
 because 
of
 its
 popularity
 and
 quality
 of
 candidates.
 
 Firms
look
 for
 candidates 
that
possess 
a
strong
 level
of
 academic
 success 
such
as;
 a
high
GPA,
 experience
that
displays
teamwork,
interpersonal
skills,
and
problem
solving. Like
 many
 other
 professions 
 consul?ng
 firms 
 use
 tradi?onal 
 behavioral
 interview
 ques?ons 
 to
 gauge
 a
 candidates’
personality.

A
common
interview
type
is 
a 
case
study.

An
interviewer
will 
give
the
interviewee
a
 business 
problem
to
solve
heavily
using
a
candidate’s
skills 
in
analysis.

These
types 
of
problems
include
but
are
 not
 limited
 to
 analysis 
of
 declining
 company
 performance
 in
 aspects 
including
 profits
 and
 produc?on
 and
 crea?ng
solu?ons
to
keep
a
business
successful
with
increased
market
compe??on. For
 poten?al
 candidates
 to
 have
 success
 in
 case
 interviews,
 individuals
 should
 analyze 
and
 prac?ce
 case
 interviews.
Many
companies 
have
sample
case 
studies
available
on
their
website
as 
well 
as
prac?ce 
workshops
 for
those
interested.

There
are
also
case
study
guides 
and
online
resources 
from
companies 
such
as 
Vault
and
 WetFeet.

Vault
ConsulUng
Guide
 Rankings OVERALL
















BEST
TO
WORK
FOR

1.
McKinsey
&
Company

1.
Bain
&
Company

2.
The
Boston
Consul?ng
Group,
Inc.

2.
Trinity
Partners
LLC

3.
Bain
&
Company

3.
Gallup
Consul?ng

4.
Booz
&
Company

4.
Triage
Consul?ng
Group

5.
Deloi2e
Consul?ng
LLP

5.
Health
Advances
LLC

6.
Monitor
Group

6.
Cornerstone
Research

7.
PricewaterhouseCoopers
LLP
 (Consul?ng
Prac?ce)

7.
OC&C
Strategy
Consultants

8.
Mercer
LLC 9.
Ernst
&
Young
LLP
(Consul?ng
 Prac?ce) 10.
Oliver
Wyman

8.
Strategic
Decisions
Group 9.
The
Boston
Consul?ng
Group,
 Inc. 10.
Milliman
Inc.

BRUIN
BUSINESS
REVIEW
11

AN INTRODUCTION TO

ACCOUNTING By
David
Vayzner

“In
the
wake
of
 recent
financial
 scandals,
 opportuniUes
in
 accounUng
will
 go
up…” An
 accoun?ng
 career
 is
 very
 exci?ng
 a n d
 c a n
 o ff e r
 t r e m e n d o u s
 opportuni?es.
 Accoun?ng
 is
 the
 process
 of
 structuring
 and
 analyzing
 economic
 figures
 and
 data
 for
 the
 internal
 use
 of
 firms
 and
 the
 external
 use
 of
 the
public.
Organized
 economic
 data
 provides
 insights
 for
 managers
 on
 how
 to
 move
 forward
 with
 the
 company
 and
 makes
 it
 easy
 for
 the
 public
 to
 see
how
 well
 the
 company
is
 doing.
 Most
 importantly
 accoun?ng
 is
 t h e
 p r o c e s s
 o f
 e s t a b l i s h i n g
 accountability
 within
 a
 business
 or
 g o v e r n m e n t
 o r
 a n y
 p a r ? c u l a r
 ins?tu?on
 for
 that
 ma2er
 that
 deals
 with
 money.
 In
 the
 wake
 of
 recent
 financial
 meltdowns
 and
 scandals,
 opportuni?es
 in
 accoun?ng
 will
 go
 up
 due
 to
 stricter
 internal
 regulatory
 s t a n d a r d s
 a n d
 m o r e
 r i g o r o u s
 accoun?ng
procedures.

IS
ACCOUNTING
RIGHT
 FOR
ME? Accoun?ng
 is
 a
 challenging
 profession
 which
 requires
 unique
 skills
 and
 a2ributes.
 A
 person
 who
 is
 interested
 in
 pursuing
an
 accoun?ng
career
 must
 have
 an
 ap?tude
 for
 math.
 He
 or
 she
 must
 also
 have
 good
 cri?cal
 reading
 a n d
 a n a l y ? ca l
 s k i l l s .
 A r e r
 a l l ,
 accoun?ng
requires
one
not
 only
to
 be
 able
to
perform
math
on
economic
data
 but
also
to
 analyze
data
and
be
able
to
 discern
 pa2erns
that
may
be
useful
 for
 management
 or
 individuals.
 Precision
 to
 detail
 and
 punctuality
 are
 also
 required.
The
most
 important
 a2ribute
 is
 having
 a
 commitment
 to
 ethical
 integrity.
 When
 repor?ng
 on
 sensi?ve
 financial
 informa?on,
 it
 is
 vital
 to
 be
 honest
and
to
not
obscure
informa?on.

“The
most
important
 agribute
is
having
a
 commitment
to
 ethical
integrity.” UCLA
 has
 many
 different
 accoun?ng
 resources
 that
 will
 help
 guide
 you
 toward
 a
 suitable
 career
 path.
 
 UCLA
 VITA
(Volunteer
 Income
 Tax
 Assistance)
 is
 a
 nonprofit
 organiza?on
 that
 provides
tax
 assistance
to
people
in
 the


West
 LA
 community.
 It
 also
 provides
 interac?on
 with
 major
 accoun?ng
 firms.
 Volunteering
 in
 their
 program
 will
 provide
 you
 with
 a
 prac?cal
 knowledge
 of
 accoun?ng
 procedures
 and
 help
 you
 determine
 whether
 accoun?ng
 is
 the
 right
 profession
 for
 you.
The
Student
 Accoun?ng
 Society
is
 a
 UCLA
 accoun?ng
 club.
 They
 host
 events
with
major
 accoun?ng
firms
and
 hold
 weekly
 mee?ngs.
 The
 Student
 Accoun?ng
 Society
 is
 an
 excellent
 resource
 that
 provides
 UCLA
 students
 with
 a
 pathway
 to
 the
 professional
 world
of
accoun?ng.



HOW
DO
I
GET
THERE?
 The
 requirements
 for
 an
 accoun?ng
 career
 are
 rigorous.
 A
 degree
 in
 accoun?ng
 or
 a
 related
 field
 is
 oren
 required.
 UCLA
 offers
 an
 accoun?ng
 minor
 in
 the
 Anderson
 School
 of
 Business
 which
 provides
 students
 with
 a
 ve r y
 d eta i l e d
 b a c k g ro u n d
 i n
 accoun?ng
procedures.
Once
you
enter
 into
 the
 field
 of
 accoun?ng,
 The
 CPA
 ( C e r ? fi e d
 P u b l i c
 A c c o u n t a n t )
 cer?fica?on
 will
 be
 vital
 as
 it
 allows
 accountants
 to
 file
 reports
 with
 the
 Securi?es
 and
 Exchange
 Commission.
 With
 a
 CPA
 you
 will
 be
 able
 to
 rise
 in
 the
 field
 of
 accoun?ng
 and
 more
 opportuni?es
will
be
 open
for
 you.
It
 is
 a
 known
 fact
 that
 accountants
 with
 CPA’s
 have
 an
 advantage
 over
 those
 who
don’t
in
the
job
market.

There
are
 two
major
pathways
to
get
your
CPA.

BRUIN
BUSINESS
REVIEW
12

Pathway
1

Pathway
2

 For
those
who
want
to
pracUce
in
California


For
those
who
want
to
pracUce
in
other
states
as
 well.

• • • • •

36
quarter
units
of
accoun?ng
related
 subjects 36
quarter
units
of
Business
related
subjects 2
years
of
work
experience passing
all
four
parts
of
the
CPA
exam Passing
an
ethics
course.

• 36
quarter
units
of
accoun?ng
related
subjects • 36
quarter
units
of
business
related
subjects • 1
year
of
work
experience • 225
quarter
units
in
general • passing
all
four
parts
of
the
CPA
exam 

































 • passing
an
ethics
course

AccounUng
firms
look
for
the
following
skills
and
agributes: 

•
Ability
to
work
independently 

•
Team
skills 

•
MulUtasking
ability 

•
High
ethical
standards 

•
Computer
literacy




•
AnalyUcal
ability 

•
Leadership
skills 

•
Wrigen
and
oral
communicaUon
 skills 

•
AgenUon
to
detail 



AccounJng
Careers 













Accoun?ng
can
be 
sub‐categorized
into
three
different
parts.
Not
all 
accountants 
do
the
same
job
and
 it
is
advantageous 
to
know
the 
three 
different
types 
of
accoun?ng
careers 
before
you
decide 
to
pursue
a 
career
 path
in
accoun?ng.
Below
is
a
quick
summary
of
the
different
accoun?ng
careers. 






Audit/Internal





 If
 you
 are 
 in
 the
 audi?ng
 profession,
 you
 analyze
 the
 fi n a n c i a l 
 s t a t e m e n t s 
 o f
 companies 
and
determine
their
 fairness 
 and
 reliability
 and
 whether
 they
 are
 an
 accurate
 representa?on
 of
 a 
 firm’s
 financial
health.
A
major
part
of
 audi?ng
 is 
 making
 sure 
 that
 companies 
 establish
 strong
 internal
 control
 systems 
 to
 protect
 themselves 
 against
 fraudulent
records.












Tax







Advisory

Here
 you
 help
 businesses 
 and
 individuals
with
their
 tax
 forms
 a n d
 p r o v i d e 
 t h e m
 t a x
 consulta?on
 advice.
 You
 can
 also
 advise
 companies
 of
 the
 tax
 implica?ons 
 of
 certain
 ac?ons
 and
 specialize
 in
 tax
 policy
 of
 state
 and
 local
 governments.
 People 
in
the
tax
 business 
 can
 also
 specialize
 in
 interna?onal
tax.

Advisory
 Accountants 
 assist
 companies 
in
assets
evalua?ons
 and
 help
 facilitate 
 mergers
 between
companies 
as 
mergers
 can
 become 
 very
 technical
 o r d e a l s .
 T h e y
 a l s o
 h e l p
 companies 
with
budge?ng,
and
 keeping
 track
 of
their
 finances.
 Other
 services 
may
 include 
risk
 a s s e s s m e n t s
 a n d
 f r a u d
 inves?ga?ons.


BRUIN
BUSINESS
REVIEW
13
















R



 
 


!

By
Chris?ne
Liu






Staff
Writer


 
 
 
 
 
 anked
 the
 top
 20

 


 



school
by
BusinessWeek


! “Students explore business problems through a multidisciplinary approach that teaches interpersonal skills/teamwork, leadership and entrepreneurial talents, global awareness and technological knowledge.” 

and
U.S.
 
News
&
World
Report,
 the
 USC
 Marshall
School 
of
Business 
in
 Los
 Angeles 
 is
 a
 private 
 research
 and
 academic
 ins?tu?on
 ranked
 highly
 for
 its
 accoun?ng,finance,
 entrepreneurship
 and
 interna?onal
 business 
 studies 
 programs.
 The
 Marshall
 curriculum
 emphasizes
 interac?ve 
learning,
 being
 the
 first
 school 
with
interna?onal
travel
and
 study
 projects
as 
requirements
 for
 every
 MBA
 degree.
 Various 
 MBAs
 and
 specialized
 degrees
 offered
 include:

MBA
for
Professionals
and
Managers 
 
 
 
 
 The
 Marshall
 MBA
 Program
 for
 Professionals
 and
 Managers
 is
 offered
 in
 the
evening
for
 students
who
would
 like
 to
 be
 fully
 employed
 while
 pursuing
 an
 MBA
 degree.
 It
 is
 a
 33
 month
 program,
in
 which
 the
 1st
 year
 consists
 of
 core
 classes.
 Arer
 comple?on
of
 the
 1st 
year,
the
student
 can
 set
 the
 pace
 for
 the
 rest
 of
 the
 program
 (as
 long
 as
 it
 is
 within
 five
 years
 total).
 The
 evening
 class
 meet
 twice
a
week
from
6
pm
to
9:40
pm.
If
 the
 commute
 to
 L.A.
 is
 inconvenient,
 the
first
year
of
core
classes
can
also
be
 completed
 at
 the
 new
 Orange
 County
 Center
in
Irvine.

Marshall
MBA


 
 
 
 

A
two
 year,
full
?me
program,
the
 Marshall
MBA
program
operates
with
a
 low
 student
 to
 faculty
ra?o
 and
 small
 class
 sizes.
 Students
 explore
 business
 problems
 through
 a
 mul?disciplinary
 approach
 that
 teaches
 interpersonal
 skills/teamwork,
 leadership
 and
 entrepreneurial
 ta l ents ,
 global
 a w a r e n e s s
 a n d
 t e c h n o l o g i c a l
 knowledge.
 Since
 Marshall
 is
 located
 close
 to
 major
 business
 and
 financial
 centers
 in
 L.A.,
 the
 school
 offers
 a
 strong
 alumni
 network
 that
 opens
 a d d i ? o n a l
 o p p o r t u n i ? e s
 a n d
 experience.

Execu?ve
MBA 
 
 
 
 
 Like
 the
 MBA
 P.M.
 program,
 the
 Execu?ve
 MBA
 is
 designed
 for
 those
 who
 wish
 to
 remain
 fully
 employed
 while
 pursuing
 an
 MBA
 degree.
 However,
 this
 program
 is
 for
 senior
 managers
 and
 seasoned
 professionals.
 Students
 can
 a2end
 classes
 in
 either
 Los
 Angeles
 or
 San
 Diego
 on
 Fridays
 and
 Saturdays
 from
 8:45
 am
 to
 4:30
 pm.
 The
 curriculum
 is
 focused
 on
 actual
 business
 world
 situa?ons
 that
 senior
managers
oren
encounter.
 IBEAR
MBA
Program The
 IBEAR
 MBA
 program
 is
 an
 a c c e l e r a t e d
 g l o b a l
 M B A
 f o r
 experienced
professionals.
This
unique
 program
 is
 one
 year
 intensive
 at
 USC,
 with
 a
 class
 size
 of
 only
 55
 students.
 From
 August
 to
 December,
 students
 complete
 the
 MBA
 fundamentals,
 and
 from
 January
 to
 July,
 teams
 of
 4‐5
 students
 par?cipate
 in
 a
 five‐month
 long
 interna?onal
 consul?ng
 project
 for
 a
 U.S.
 or
 foreign
 corporate
 client.
 This
 program
 stresses
 business
 rela?onships
 between
 North
 America,
 Asia
and
La?n
America.


BRUIN
BUSINESS
REVIEW
14 !


Master
of
Accoun?ng 
 
 
 
 
 A
 full‐?me,
 one‐year
 program,
 the
 Leventhal
 Master
 of
Accoun?ng
is
ranked
 as
 on
 of
 the
 top
 graduate
 accoun?ng
 programs
 in
the
na?on.
To
prepare
for;
careers
in
public
 accoun?ng,
financial
services
and
 investment
 banking,
 government
 and
 non‐profit,
 and
 corporate
 finance,
 the
 program
 uses
 case
 study
methods
and
teamwork
in
all
courses. Master
of
Business
Taxa?on 




The
Master
of
Business
Taxa?on,
offered
 both
full‐?me
and
part‐?me,
is
aimed
to
 develop
skills/exper?se
professionals
need
 while
working
with
individuals
and
firms
with
 tax
legisla?on
and
regula?on
at
all
 government
levels.
Taxa?on
includes
law,
 economics,
accoun?ng
and
poli?cs,
and
thus
 requires
the
tax
advisor
to
understand
all
 aspects
of
tax
law
and
its
administra?on.
 Master
of
Medical
Management 




This
degree
provides
physicians
with
the
 formal
business
educa?on
needed
to
help
 them
realize
their
professional
goals.
It
is
 modeled
arer
the
Execu?ve
MBA
program
 and
allows
physicians
to
earn
a
degree
in
only
 one
year,
without
interrup?ng
their
careers.

 informa?on
about
the
USC
Marshall
School
of
 Business
programs,
visit:

MBA
Admissions
Profile 2009

2010

2011

Applications
Received

1651

2076

2224

%
Accepted

29%

23%

22%

219

222

Applicant
Pool

Class
Size Academic
Profile Average
GPA

3.3

3.3

3.3

Median
GMAT

690

700

690

GMAT
80%
Range

640‐730

640‐740

640‐740

General Average
Age

28

28

28

5

5

5

16%

14%

13%

27%

25%

27%

Science
&
Engineering

26%

27%

21%

Business

23%

26%

30%

Economics

19%

14%

15%

5%

8%

7%

Average
Years
Week
 Expectancy Married
Students Undergrad
Majors Humanities
and
 Sociology Science

Computer
Science


www.marshall.usc.edu




Admissions 




Each
program
has
its
own
admission
 requirements.
To
find
applica?on
material
 and
for
more
informa?on
about
the
USC
 Marshall
School
of
Business
programs,
visit:


www.marshall.usc.edu




! BRUIN
BUSINESS
REVIEW
15

CAREER
TIPS THE
BASICS

Even
 without
 this
 financial
 crisis,
 being
 in
 college
 and
 receiving
 your
 degree
 is
 not
 enough
 to
 get
 a
 job.
 The
 job
 market
 is
 becoming
 more
 and
 more
 compe??ve.
 Regardless,
a
job
 will
 never
 fall
into
your
 lap‐‐
whether
it
is
a
part‐?me
job
or
 a
career,
 you
 need
 to
 be
 aggressive
 and
 
 prepared
 in
 your
 job
 search.
 But
 don’t
fear;
we


FINDING
A
JOB:

BY
LONA
ZHAO STAFF
WRITER

!

Even
if
you
are
not
currently
looking
for
a
job,
it
is
essen?al
 to
 keep
 connec?ons
 with
 all
 professionals
 you
 have
 met
 so
 far.

 For
instance,
if
you
have
done
volunteer
work
in
the
past,
think
 about
 networking
 with
 the
 volunteer
 coordinator.
You
 never
 know
who
will
be
looking
for
an
employee
in
the
future. If
 you
 are
 ac?vely
 looking
 for
 a
 job,
a
 very
 helpful
 resource
 these
 days
are
online
job
 search
engines
such
as
Monster
 and
 Career
 Builder.
 An
 invaluable
 resource
 for
 UCLA
 students
 is
 BruinView.
 Where
 employers
 post
 job
 lis?ng
 specifically
 for
 Bruins.
When
looking
for
 a
job
online
you
will
want
to
prepare
 a
 longer,
more
 detailed
 resume
 so
 that
 you
 can
 more
 easily
 differen?ate
yourself
from
other
poten?al
candidates. You
 do
not
 want
 to
rely
only
on
internet
 job
search
 engines.
It
 is
 important
 to
 be
 aggressive
 with
 your
 job
 search
 so
 look
 around
in
 the
classifieds,
ask
friends
and
professors,
and
 even
 call
 companies
asking
if
there
are
 any
available
posi?ons.
You
 do
not
need
to
be
harassing
people
for
a
job,
but
you
definitely
 want
to
exhaust
your
every
resource.

“...you
definitely
want
to
 exhaust
your
every
 resource.” WRITING
YOUR
FIRST
RESUME: A
resume
is
a
concise
document
showing
employers
what
you
 are
capable
of
and
how
you
will
be
valuable
to
their
company.
 It
is
the
first
 step
 to
geung
your
 foot
 in
the
door.
Try
to
 think
 of
 a
 resume
as
you
 would
 an
interview
and
 make
a
conscious
 effort
 to
 use
 your
 resume
 to
 dis?nguish
 yourself
 from
 other
 applicants.
This
will
get
you
closer
to
geung
your
new
job. When
 wri?ng
 your
 first
 resume,
 the
 best
 resource
 is
 people
 who
 have
 already
 wri2en
 one.
 A
 great
 place
 to
 start
 is
 to
 search
for
free
resume
templates
online.
This
will
help
you
find
 the
 perfect
 format
 for
 your
 resume.
 There
 are
 sites
 that
 provide
career‐specific
resumes
to
cater
to
an
industry
you
are
 applying
into.
Similarly,
many
people
also
 choose
to
customize


their
 resumes
 for
 every
 job
 they
 apply.
 This
 is
 a
 good
 idea
 because
 you
 may
 apply
for
 several
 different
 jobs
at
 the
 same
 ?me.
 If
 you
 use
 just
 one
 resume,
 you
 have
 to
 keep
 your
 resume
general
so
as
to
not
 limit
 yourself,
but
this
can
also
be
 boring
for
 the
 employer
 to
 read
 and
 your
 resume
 may
fade
 into
 the
 background.
 Customizing
 your
 resume
 for
 each
 job
 will
 show
 your
 employer
 how
 you
 might
 be
 perfect
 for
 their
 company. Star?ng
 with
 a
 blank
 slate
 might
 be
 in?mida?ng,
 but
 remember,
 you
 do
 not
 have
 to
 be
 previously
 employed
 to
 write
a
resume.
Instead
you
can
list
your
volunteer
experiences
 and
 ac?vi?es
you
 have
par?cipated
 in.
You
 may
also
 want
 to
 list
 special
 skills
and
 talents
you
have
acquired
 that
may
make
 you
valuable
in
the
posi?on
 you’re
trying
to
fill.
The
important
 thing
here
is
not
to
 lie
 on
your
 resume,
if
you
 are
 caught
you
 will
only
end
up
losing
credibility
with
future
employers.

BRUIN
BUSINESS
REVIEW
16

Now
that
you
have
finished
wri?ng
your
first
resume
you
must
 proofread.
Check
your
header
and
make
sure
that
all
your
 contact
informa?on
is
correct
and
you
have
not
misspelled
 anything.
Have
someone
else
read
your
resume
and
ask
if
your
 objec?ves
are
clear.
Finally,
print
your
resume
on
clean
white
 paper
with
plain
black
ink.

“…if
you
are
caught
lying
 on
your
resume
you
will
 only
end
up
losing
 credibility
with
future
 employers.” ACING
YOUR
FIRST
INTERVIEW: First
and
foremost,
it
is
beneficial
to
research
the
company
you
 are
 applying
to
 work
for.
Many
employers
have
 a
lot
 of
 pride
 for
 their
 company
 and
 may
 look
 for
 employees
 who
 are
 as
 enthusias?c
as
they
are.
Doing
your
homework
also
makes
you
 more
 prepared
 for
 the
 interview.
 You
 can
 then
 cater
 your
 answers
 toward
 why
 their
 company
needs
you
 on
 their
 staff.
 You
 will
 also
 find
 that
 employers
 will
 ask
 if
 you
 have
 any


!

ques?ons
 for
 them,
 having
ques?ons
 prepared
 will
 help
 you
 convey
your
interest
in
their
company. Prepare
 your
 answers
 beforehand
 by
 searching
 common
 job
 interview
ques?ons
and
prac?cing
them
either
with
a
friend
or
 in
front
of
a
mirror.
You
will
want
your
answers
to
be
clear
and
 you
want
ensure
you
 are
answering
the
ques?on
that
 is
being
 asked
 and
 not
 fall
 off
 topic.
 This
 does
 not
 mean
 that
 you
 should
 memorize
 your
 answers;
 you
 do
 not
 want
 to
 sound


robo?c
and
 rehearsed.
Instead,
make
a
list
of
 points
that
 you
 want
to
 cover
 when
 answering
different
 ques?ons.
Keep
in
 mind
 that
 when
 you
 answer
 these
 ques?ons
you
 want
 the
 employer
 to
 know
why
they
should
hire
you
over
other
applicants.
 Have
 a
 list
 of
 references
 and
 an
 extra
 copy
 of
 your
 resume
 printed
 out
 for
 the
 interview
 in
 case
 the
 interviewer
 will
 not
 have
 it
 in
 front
 of
 them.
 (Remember,
 you
 do
 not
 need
 a
 previous
job
 for
 references,
pick
a
few
 important
 people
 from
 your
past
ac?vi?es
or
even
a
neighbor—anyone
that
can
vouch
 for
you). Dress
 appropriately
 for
 your
 interview.
 Wear
 clean
 ironed
 clothes
 and
 clean
 close‐toed
 shoes.
 You
 should
 be
 well
 groomed,
and
try
not
to
 overwhelm
the
interviewer
 with
your
 cologne
or
perfume.
When
in
doubt
about
what
to
wear,
think
 more
conserva?vely.
This
 means
 try
to
 conceal
 any
ta2oos
or
 body
 piercings.
 Looking
 well
 rested
 and
 relaxed
 for
 your
 interview
is
essen?al. Try
to
 be
 early
 for
 your
 interview—we
are
 not
 saying
one
or
 two
 hours
 early,
but
 at
 least
 15
 minutes
 so
 that
 you
 can
find
 where
you’re
supposed
to
 be.
This
 is
also
 a
good
 ?me
to
 use
 the
restroom
beforehand
so
that
you
do
not
stress
yourself
out
 during
the
interview. When
 your
 interviewer
 introduces
 himself/herself,
 wait
 for
 a
 handshake
 and
 do
 not
 sit
 un?l
 the
 interviewer
 sits
 down
 or
 invites
you
to
sit
down.
Maintain
eye
contact
for
the
interview,
 but
do
not
stare
your
interviewer
 down,
you
 want
 to
let
 them
 know
you
are
engaged
in
the
conversa?on
but
not
threatening
 them.
You
 should
also
 keep
 good
 posture
 but
 try
 not
 to
 look
 too
s?ff.
Do
not
fidget
during
your
interview
or
cross
your
arms
 or
put
your
 hands
in
your
pocket—these
are
clear
signs
of
how
 uncomfortable
 you
 are
 and
 can
 make
 the
 interviewer
 uncomfortable. A
 lot
 of
 employers
 will
 ask
 when
 you
 are
 available
 to
 work
 arer
 the
interview.
Do
 not
hesitate
to
men?on
 if
you
 have
an
 obliga?on
 that
 might
hold
 you
 back.
Once
 again,
you
 want
 to
 be
honest.
If
and
when
 you
get
 hired
for
 the
posi?on,
you
don
 not
want
to
spring
your
schedule
on
them. At
the
end
of
the
interview
remember
to
thank
the
interviewer
 and
anyone
else
who
 has
helped
you
(i.e.
the
recep?onist,
any
 associates,
secretary,
etc.).
You
 may
also
 want
 to
ask
what
 the
 selec?on
 process
 is
 like
 and
 how
 long
 it
 might
 be
 for
 you
 to
 find
out
 if
you
 got
 the
job.

Really
try
to
leave
the
interviewer
 with
 a
 las?ng
impression,
even
 if
 you
do
 not
 get
 the
 job
this
 ?me,
they
might
remember
you
for
another
posi?on
later.

BRUIN BUSINESS REVIEW 17

Q&A
with...
 Edward
McDeviR

Q
1:
To
start
off,
what
do
you
 enjoy
most
about
teaching?

EM:
I
very
much
enjoy
the
interac?on
 with
students,
especially
during
office
 hours.
It
is
a
challenge
to
teach
 economics
and
I
enjoy
that
challenge.

Q
2:
What
would
be
your


biggest
frustraUon
about
teaching? EM:
That
would
have
to
be
the
large
 class
sizes.

The
large
class
sizes
make
it
 very
difficult
to
interact
with
only
but
a
 handful
of
students.
Otherwise,
I
don’t
 have
many
complaints.
The
students
at
 UCLA
are
by
and
large
very
hard‐ working
and
intelligent.
That
is
one
of
 the
things
that
make
teaching
here
so
 enjoyable.

Senior
Staff
Writer

Q
3:
Why
did
you
choose
to


Q
6:
What
do
you
do
with
your


EM:
I
must
admit
I
did
not
originally
 plan
to
go
into
teaching.
I
went into
the
field
of
economics
because
I
 found
it
fascina?ng.
My
ini?al
plan
 as
an
undergraduate
was
to
go
into
the
 business
field,
but
arer
a
few
econ classes,

I
was
hooked.


So
when
I
get
 to
teach
something
that
I
find
 enormously
 enjoyable,
that
makes
teaching
very
 easy
and
very
sa?sfying.


EM:
When
I
have
the
?me‐
and
that
is
 not
very
oren‐
I
like
to
travel.
I
am
also
 a
huge
sports
fan,
especially
college
 football.

Q
4:
If
you
could
have
chosen


Q
8:
Now
on
to
some
more


become
a
professor?

Edward
 McDeviP,
 a
 lecturer
 for
 UCLA’s
 Department
 of
Economics
has
been
teaching
 ever
 since
 geWng
his
Ph.D.
 at
 the
 University
 of
 California,
 Los
 Angeles
 in
 1994.
 He
 is
 currently t e a c h i n g
 a
 c l a s s
 o n
 Macroeconomics
Theory.

By
Julie
Chen

any
other
profession,
what
would
 it
be? EM:
I
don’t
know
if
this
counts
because
 it
is
s?ll
in
academia,
but
I
think
I
would
 also
have
enjoyed
history
as
a
 profession.
I
have
always
been
very
 fond
of
history
and,
in
fact,
one
of
my
 favorite
fields
as
a
graduate
student
 was
economic
history.
But
I
enjoy
other
 branches
of
history
just
as
much.


Q
5:
A
lot
of
students
consider


you
to
be
one
of
the
hardest
 Economics
professors.
Do
you
have
 any
advice
for
students
that
find
 your
classes
difficult? EM:
Work.
Work.
Work.

Ask
ques?ons.
 Economics
is
[a]
difficult
subject,
so
a
 student
needs
a
lot
of
perseverance
to
 succeed
in
this
field.
There
is
 unfortunately
no
special
“trick”
to
 doing
well
in
economics
or
almost
any
 other
rigorous
field
of
study.
It
helps
if
 you
enjoy
the
subject
ma2er.

Ume
away
from
UCLA?

Q
7:
Have
you
been
keeping
up
 with
UCLA
football
games
as
well?

EM:
Oh,
of
course,
I
watch
every
single
 game,
even
if
we
are
at
a
sour
point.

difficult
quesUons.

How
would
you
 describe
the
current
state
of
the
 global
economy? EM:
At
least
for
the
U.S.
economy,
as
 the
Fed
has
recently
said,
there
are
 definitely
signs
that
it
is
stabilizing.
Of
 course,
most
specialists
in
this
field
 predict
a
very
slow
recovery,
so
we
will
 probably
have
the
high
unemployment
 rates
for
a
few
years.

Q
9:
Last
quesUon:
Many


believe
that
the
financial
crisis
has
 made
economics
more
relevant
 and
immediate
to
college
students.
 Looking
at
your
classes,
how
 accurate
do
you
think
this
 statement
is? EM:
We
would
like
to
think
that
 economics
is
always
very
relevant.
Has
 it
become
more
relevant
to
college
 students?
I
would
say
that
it
has:
 Especially
those
about
to
graduate
and
 enter
the
job
market.
Recent
events
 have
piqued
many
students’
interest
in
 business
fluctua?ons
and
the
sources
 of
such
fluctua?ons.


BRUIN BUSINESS REVIEW 18

THE
FINANCIAL
CRISIS 
The
Global
Impact
of
the
Financial
Crisis



How
the
Financial
Crisis
Can
Affect
You
 
(The
Student) 
The
Financial
Crisis:
An
Overview





20 22 23

BRUIN BUSINESS REVIEW 19

FINANCIAL
CRISIS THE
IMPACT
ON
THE
GLOBAL
ECONOMY BY
STEPHEN
MOOCK

Staff
Writer


I

t
 has
 been
 a
 ligle
 over
 a
 year
 now
 since
 the
 collapse
 of
 the
 Wall
 Street
 giant
 Lehman
 Brothers
 and
 the
 naUonwide
realizaUon
that
the
financial
sector
would
be
in
for
a
stomach‐churning
ride.

Aper
the
investment
 bank
 filed
 Chapter
 11
 bankruptcy
 protecUon
 on
 September
 15,
 2008,
 markets
 experienced
 unprecedented
 drops
that
caused
people
around
the
naUon
to
cringe
as
their
401k’s
disappeared
before
their
eyes.

Beginning
 October
6,
in
what
became
known
as
“Black
Week,”
the
Dow
Jones
industrial
average
fell
1,874
points
or
18%.

 This
 became
 the
index’s
 worst
 weekly
 decline
 on
 both
 a
 point
 and
 percentage
basis
 ever.
 
 With
 Americans
 being
 worried
about;
paying
 their
mortgage,
finding
 another
 job
aper
 being
laid
 off,
or
 the
possibility
of
 reUrement,
 
 it
 is
 easy
 to
 understand
 why
 people
 have
 been
 more
 concerned
 with
 their
 own
 well
 being
 instead
 of
 the
 global
 ramificaUons
of
 the
financial
meltdown.

The
original
panic
is
over
now
 and
it
is
important
that
we
look
with
a
broad
 view
 at
 how
 naUons
 other
 than
 the
United
 States
 have
 been
 affected
 by
 this
 turmoil.
 
 In
 this
 arUcle
 it
 would
 be
 impossible
to
cover
all
areas
 of
the
world
and
how
they
have
been
affected.
Instead
the
focus
will
be
on
two
relevant
 topics:
 
China’s
 role
in
 the
recovering
 global
economy
and
the
restructuring
 of
 global
finance
that
will
help
 heal
the


CHINA’S
ROLE
IN
THE
 GLOBAL
ECONOMY Over
 the
 past
 year
 there
 has
 been
 a
 considerable
 amount
 of
 buzz
 revolving
 around
 the
 Chinese
 economy
 with
 respect
 to
 the
 global
 financial
 crisis.

 People
 have
 been
 throwing
 around
 such
 statements
 as
 “China
 owns
 all
 of
 America’s
 debt,”
 and
 “China
 has
 not
 been
 affected
 by
 the
 wounded
 interna?onal
 economic
 state.”
 
 These
 claims
 have
 validity,
 but
 they
 can
 also
 be
 misinterpreted
 without
 a
 deeper
 look
 into
 the
 current
 state
 of
 China.

 The
 first
 key
piece
 of
 informa?on
 that
 must
 be
 understood
 is
 that
 China,
like
 most
 of
 the
 other
 developed
 world
 na?ons
 did
 receive
 a
 government
 s?mulus
 package
 in
 order
 to
 prevent
 it’s
largely
export
 based
economy
from
 collapsing.
 
 The
 end
 of
 2008
 was
 a
 t e r r i b l e
 ? m e
 f o r
 r e t a i l .
 S u c h
 establishments
 stopped
 placing
 orders
 for
more
merchandise.

This
was
a
killer
 for
 China’s
 manufacturing
 industry
 which
 thrives
 on
 constant
 worldwide
 exports.
 
 China
 managed
 to
 pull
 through
 the
 brief
 lull
 in
 trade.
 Before
 another
 Wall
 Street
 giant
 could
 fall,
 China’s
 produc?on
 was
 back
 up
 and
 running.
 
 However,
 produc?on
 is
 s?ll


not
 back
 to
 its
 pre‐crisis
 state.

 Retailers
 in
 na?ons
 worldwide
 are
 being
 more
 cau?ous
 about
 their
purchases.
They
also
do
not
 have
 the
 excess
 liquid
 capital
 that
 was
 once
 had
 to
 purchase
 excess
 goods
 and
 find
 ways
 to
 get
people
to
buy
them. The
 size
 of
 China’s
 economy
 is
 growing
but
s?ll
less
than
a
third
 of
 that
of
 the
United
 States
with
 a
 GDP
 of
 13.8
 trillion.
 
 Being
 a
 country
where
it
has
proven
hard
 ! to
 borrow,
 both
 corpora?ons
 and
 households
 in
 China
 have
 resorted
 to
 higher
 savings
 rates
 in
 the
 past
 years.

 These
 savings
 put
 China
 in
 a
 premier
 state
to
lend
when
the
rest
of
the
world
 really
 needed
 it.
 
 However
 that
 excessive
saving
does
not
 s?mulate
the
 economy
or
new
business
growth.

“...the
average
Chinese
 home
price
is
nine
Umes
 that
of
the
household
 income.” China’s
recent
growth
is
something
that
 should
be
paid
close
a2en?on
to.

Arer
 the
 deployment
 of
 the
 s?mulus,
there
 has
 been
 a
 rapid
 jump
 in
 share
 and


house
prices.

It
is
too
early
to
call
this
a
 bubble,
 but
 the
 government
 needs
 to
 be
 ready
 to
 introduce
 legisla?on
 in
 order
 to
 ?ghten
 liquidity
 if
 this
 trend
 con?nues.

The
Shanghai
A‐share
index
 is
 up
 a
 solid
 60%
 from
 last
 November,
 and
 the
 average
 Chinese
 home
 price
is
 nine
 ?mes
 that
 of
 the
 household
 income.

These
figures
when
 combined
 with
 the
 large
 increase
 in
 trading
 and
 home
 sales
 would
 lead
 anyone
 to
 believe
 that
 this
 is
 the
 beginning
 of
 a
 bubble
 that
 will
 undoubtedly
lead
to
a
 catastrophic
burst.

BRUIN BUSINESS REVIEW 20

and
 America
 s?ll
 lean
 towards
 the
 route
of
 fewer
 restric?ons,
 holding
 s t r o n g
 t o
 t h e
 f r e e
 m a r k e t
 philosophy
 and
believing
 that
firms
 should
 make
the
decisions
 on
 how
 much
 to
pay
 their
 employees.
 
The
 G20
 issued
 a
 statement
 indica?ng
 that
 regula?ons
 would
 be
 made
 requiring
 a
 significant
 por?on
 of
 variable
 compensa?on
 to
 be
 deferred
 (?ed
 to
 performance
 and
 to
 be
 issued
 in
 the
form
 of
 stock).

 They
 also
 asked
 all
 firms
 to
 i m p l e m e n t
 i n d e p e n d e n t
 compensa?on
 commi2ees
 who
 review
 the
 firm’s
 structure
 and
 systema?c
 risk,
adjus?ng
 employee
 compensa?on
appropriately.

!

RESTRUCTURING
OF
 GLOBAL
FINANCE


Many
 economists
 are
 fairly
 confident
 that
 we
 have
 seen
 the
 worst
 of
 the
 recession
 and
the
economy
is
ready
to
 begin
making
a
recovery.

Now,
policies
 need
 to
 be
 implemented
 so
 that
 a
 steady
recovery
is
 possible.

 The
 world
 powers
 and
 central
 bankers
 must
 join
 together
 to
 make
 sure
 that
 the
 when
 the
 economy
 recovers,
 it
 is
 by
 sustainable
 means.
 
 Along
 with
 the
 United
 States,
 other
 interna?onal
 powers,
 Japan,
 France,
 Germany,
 and


!

the
UK,
have
been
 significantly
affected
 by
 this
 global
 hardship
 leaving
 everyone
 in
 a
 posi?on
 ready
 to
 nego?ate.

A
group
of
twenty
finance
ministers
 and
 central
 bankers
 making
 up
 the
 G20
met
in
Pi2sburgh
for
their
most
 recent
 summit
 to
 discuss
 future
 r e g u l a ? o n s
 t h a t
 m u s t
 b e
 implemented
 into
 the
 financial
 industry.
 
 Established
 in
 1999,
 the
 G20
 gathers
 to
 converse
 and
 b r a i n s t o r m
 a b o u t
 h o w
 t h e
 industrialized
 and
 developing
 na?ons
 of
 the
 world
 can
 work
 together
 for
 the
benefit
 of
 the
 global
economy.

One
of
the
hot
 topics
 discussed
 was
 the
 c o n t r o v e r s i a l
 i s s u e
 o f
 e x t r a v a g a n t
 b o n u s e s
 f o r
 financial
 sector
 employees.

 Germany
 and
 France
 tend
 to
 lean
 towards
 a
 stricter
 stance
 on
the
size
and
type
of
bonuses,
 wan?ng
 to
 limit
 them
 to
 a
 smaller
 percentage
 of
 an
 individual’s 
non‐variable
income
 as
 well
 as
 paying
 par?ally
 in
 shares 
rather
 than
cash.
 Britain


Another
 important
 aspect
 of
 finance
 that
 the
 G20
 inves?gated
 was
 raising
 required
 percentage
 equity
 controlled
 by
 large
 banks.

 When
 many
 loans
 backed
 by
 li2le
 equity
 (the
 value
 of
 the
 property
 held
 against
 the
 loan)
 are
 present,
 unstable
 economic
 condi?ons
 will
 likely
be
the
result.

It
may
seem
like
 this
 problem
 would
 be
 easily
 fixed
 by
 implemen?ng
 a
global
 standard
 minimum
equity
required
to
borrow
 on.
 
 However,
 the
problem
 lays
 in
 accoun?ng
 rules
 that
 are
 not
 uniform
 in
 every
 country.
 Meaning
 that
 the
 way
 assets
 are
 evaluated
 can
vary
enormously
from
 place
 to
 place.
 
 American
 standards
 usually
 involve
 pricing
 assets
 to
 market,
 where
European
policies
are
aiming
 to
 revert
 to
 “smoothed”
 balance‐ sheets
that
are
be2er
for
regulators
 than
investors.
 
 The
G20
agreed
 to
 work
 on
 geung
 these
 prac?ces
 standardized
 interna?onally
 so
 that
 less
will
be
lost
in
transla?on.

BRUIN BUSINESS REVIEW 21

How
the
Economy
is
 AffecUng
You

BY CHRIS YOUNG Staff
Writer

Unless
you
have
been
 living
 under
 a
rock,
you
 know
 that
currently,
America
 and
most
of
 the
world
 has
been
 locked
down
 in
 an
economic
recession.
The
 news
has
been
inundated
with
doom
and
gloom.
However,
there
is
a
story
out
 there
that
hasn’t
been
told.
We
have
all
heard
the
sta?s?cs
and
figures.
The
 job
 loss
 figures,
 the
 consumer
 price
index,
 and
 of
 course,
 all
 the
 speeches
 made
by
all
the
talking
heads
we
see
regularly
on
television.
But
how
are
we,
 as
college
 students,
 affected?
 Yes,
 even
in
our
world
 of
 books
and
 beer,
the
 interna?onal
economy
has
affected
us
profoundly. First,
something
that
 directly
affects
 us.
 In
 the
 past
 year,
 the
 UC
 system
 has
 raised
 tui?on
 by
9.3%.
For
 the
 average
 student
 with
 no
 financial
 aid
 or
 scholarships,
that
 is
 nine
 hundred
 firy
 just
 for
 tui?on.
 This
 is
 not
 even
 including
housing,
meal
plans,
or
 any
of
 the
 other
 ameni?es
 we
 pay
 for.
 For
 those
 of
 you
 who
 were
 a
li2le
 slow
 in
 math
 class,
a
 thousand
 dollars
is
 not
 a
 laughing
 ma2er.
 That’s
 two
 UCLA
 French
 textbooks,
two
Civil
Engineering
 textbooks,
 four
 microeconomics
 textbooks,
 and
 a
 subscrip?on
 to
 the
 magazine
 of
 your
 choice
 with
 change
 ler
over
for
lunch
at
Ackerman.
 Besides
 the
 thinning
 of
 our
 wallets,
 compe??on
for
 internships
is
becoming
 fierce.
 Firms
 which
 used
 to
 offer


n u m e r o u s
 i n t e r n s h i p s
 f o r
 undergraduates
 have
 been
 cuung
 down
on
 their
offerings.
An
 investment
 group
 in
 San
 Francisco
 which
 in
 2007
 took
on
 three
 undergraduate
interns
 in
 their
 mortgage
 department
 including
 one
 from
 UCLA
 could
 not
 take
 on
 any
 interns
 in
 the
 summer
 of
 2009
 simply
 because
 there
 was
not
enough
work
to
 give
to
an
unpaid
intern.
Stop
 and
 think
 about
 this
 for
 a
 second.
 There
 was
 no
 demand
 for
 an
 unpaid
 intern.
Although
 this
 is
 the
 excep?on
 rather
 than
 the
 rule,
 compe??on
 and
 supply
 of
 things
 such
 as
jobs
 and
 internships
for
 college
 students
have
been
 coming
further
 and
 further
between.
 The
 en?re
 picture
 is
 not
 all
 grey
 skies
 and
 raindrops.
With
 fee
 hikes
and
 lack


of
 jobs,
students
are
branching
out
 and
 developing
 more
 skills.
 Students
 are
 spending
 more
 ?me
 a2ending
 student
 run
workshops
such
 as
resume
builders
 and
 mock
interviews.
Students
 are
also
 beginning
 to
 map
 out
 their
 op?ons.
 Graduate
 school
 is
 becoming
 a
 much
 more
a2rac?ve
 op?on
as
jobs
become
 a
rare
 commodity.
The
average
student
 is
 now
 much
 more
 aware
 of
 what
 he
 can
do
 to
make
himself
more
a2rac?ve
 for
 the
eventuality
of
entering
the
work
 force.
In
a
way,
this
recession
is
helping
 by
 driving
 students
 to
 learn
 essen?al
 business
 skills
 that
 will
 help
 them
 in
 both
 recessions
 and
 normal
 economic
 ?mes.
 In
 a
 recovering
 economy,
 these
 skills
will
 be
even
more
useful.
The
Dow
 Jones
 Industrial
 Average,
 one
 of
 the
 biggest
 indicators
 for
 the
 state
 of
 the
 American
economy,
broke
10,000
points
 in
 mid‐October
 for
 the
 first
 ?me
 in
 a
 year.
Combined
 with
 the
 posi?ve
 news
 coming
 from
 Ben
 Bernanke
 and
 the
 treasury
 department,
 it
 looks
 like
 our
 extended
 economic
 forecast
 includes
 some
 sunshine
 for
 current
 college
 students.

BRUIN BUSINESS REVIEW 22

THE
GREAT
 CREDIT
CRISIS:
 A
LONG
BUMPY
ROAD BY ROBERT CHANG STAFF WRITER

T



















he
Great
Credit

Crisis

has
scarred
the
lives
of
many 

















Americans.
They
are

hurUng
since
they
have
joined 

















the

increasing

number

of

unemployed

people

or 

















have


witnessed


value


of


their


stock

porsolios slashed
 in
 half
 It
 has
been
 more
 than
 a
 year
since
the
 crisis
 brought
 the
 financial
 Utan
 Lehman
 Brothers
 to
 its
 knees,
 prompUng
the
government
 to
issue
an
unprecedented
mulU‐ trillion–dollar
bailout.
Yet
 even
in
hindsight,
many
people
do
 not
understand
the
economic
crisis’
root.
 Does
 the
 fault
 lie
 with
 former
 president
 Bush?
 Former
 Federal
 Reserve
 chairman
 Alan
 Greenspan?
 Or
 Wall
 Street
 CEOs?
 Should
 the
 blame
 fall
 on
 investors,
 mortgage
 companies,
 or
 even
 the
 average
 American?
 To
 get
 to
 the
 bogom
of
this
crisis,
we
trace
its
roots
to
the
beginning
of
the
 housing
boom.

THE
AMERICAN
DREAM 
(NOW
40%
OFF!) To
 take
 a
 cue
 from
 our
 former
 president,
we
 can
 blame
 the
 housing
 boom
 and
 its
 subsequent
 bust
 on
 Osama
 Bin
 Laden
 and
 the
 infamous
 September
 11,
 2001,
 a2acks.
 In
 a d d i ? o n
 t o
 l o s s
 o f
 American’s
 lives,
 the
 American
 economy
took
a
 heavy
 blow
 that
 day.
 Under
 then‐chairman
 Greenspan,
 the
 Federal
 Reserve
 loaned
 out
 billions
 of
 dollars
 to
 finance
 companies
 and
 cut
 the
 interest
 rate
 from
 3.5
 percent
 to
 1


!

percent
over
the
remainder
of
2001.
This
influx
of
money
 into
 the
 financial
 system
 did
 its 
 job
 in
 saving
 the
 economy
 from
 a
 recession
 induced
 by
 the
 events
 of
 September
 11.
The
low
interest
rates
and
excess
capital
 made
borrowing
a
li2le
too
easy.


With
 all
 the
 extra
 money,
 banks
 were
 willing
 to
 finance
 mortgages
with
 much
lower
 interest
 rates,
making
it
 easier
 for
 Americans
buy
homes.
 
Hence,
the
 American
 dream
 had
just
 become
a
whole
lot
cheaper
to
a2ain.
 People
who
normally
could
only
afford
to
rent
took
advantage
 of
 low
 interest
 rates
 to
 buy
 homes.
 The
 growth
 in
 demand
 caused
house
prices
to
skyrocket,
and
some
homeowners
took
 advantage
of
the
market
by
refinancing
their
homes
at
a
higher
 price.
 Many
 Americans
 could
 now
 make
 a
 living
 buying
 and
 selling
houses
for
profit,
also
known
as
“flipping.” Alone,
banks
did
not
have
capital
to
finance
all
of
their
 clients’
 homes.
 They
 sold
 some
 of
 the
 mortgages
 to
 government‐ sponsored
 enterprises
 like
 Fannie
 Mae
and
 Freddie
Mac,
who
 consequently
bought
50
percent
of
residen?al
mortgages
from
 the
banks.
Normally,
Fannie
Mae
 and
 Freddie
Mac
 would
 only
 buy
 mortgages
 that
 held
 up
 to
 certain
 standards,
 but
 the
 standards
were
 lowered
 due
to
 government
 pressure
 to
 keep
 supply
on
par
 with
rising
demand.
This
was
the
first
of
a
series
 of
risky
moves
that
would
eventually
lead
to
the
housing
bust.
 Later,
 as
 Wall
 Street
 investors
 began
 stepping
 up
 their
 purchase
 of
 risky
 debt,
 Fannie
 Mae
 and
 Freddie
 Mac
 felt
 increased
pressure
to
compete. The
 housing
 boom
 caused
 fervor
 in
 the
 banking
 industry.
 Bankers
 were
 quick
 to
 take
 advantage
 of
 the
 opportunity,
 lending
money
to
people
who
did
 not
have
adequate
credit
 to
 buy
a
home
 based
 on
previous
 standards.
 These
 subprime
 ! mortgages
 were
 most
 popular
 in
 none
 other
 than
 our
 own
 State
 of
 California.
 Soon,
 en?re
 companies
 sprung
 up
 overnight
 devoted
 to
 lending
 these
 subprime
 mortgages.
By
 lending
 money
 to
 aspiring
 homeowners
 with
 bad
 credit,
 banks
 risked
 a
 chance
 that

 loans
 would
 default.
 This
 would
 render
 their
 mortgages


BRUIN BUSINESS REVIEW 23

worthless.
One
of
the
most
notorious
prac?ces
was
the
stated
 income
loan.
Where
interest
 rate
and
 credit
were
 determined
 by
 the
 income
 claimed
 by
 the
 borrower.
 Some
 people
 exploited
 this
 prac?ce
by
exaggera?ng
their
 incomes
to
 get
a
 be2er
interest
rate.

subprime
 mortgages
 had
 been
 issued
 adjustable‐rate
 loans
 which
 meant
 banks
 could
 change
 the
 mortgage
 interest
 rate
 based
on
 economic
condi?ons.
This
 had
 worked
out
very
well


THE
CORRUPTION
SPREADS In
 another
 world
 this
 would
 have
 been
 the
 extent
 of
 the
 problem
and
only
the
housing
market
would
suffer
in
the
long
 run.
Reducing
severity
of
 the
recession.
 Unfortunately,
 this
 is
 not
 how
 business
 is
 done
 in
 today’s
 global
 economy.
 Wall
 Street
investment
banks
bought
mortgages
from
bank
lenders,
 the
investment
 banks
 then
 sliced
 them
 up,
repackaged
 them,
 and
 sold
them
as
securi?es,
the
most
common
of
 which
 were
 collateralized
debt
obliga?ons
(CDOs).
This
prac?ce
turned
out
 to
 be
 a
 huge
 mistake
 since
 investors
 were
 unaware
 that
 these
 purportedly
 “safe”
 securi?es
 they
 were
 b u y i n g
 c o n ta i n e d
 parts
 of
 the
 high‐risk
 subprime
 mortgages.
 Investors
were
 willing
 to
 buy
 these
 CDOs
 b e c a u s e
 t h e
 companies
 in
 charge
 of
 monitoring
 the
 risk
 of
 securi?es
 had
 given
 them
 AAA
 ra?ngs(One
 of
 the
 safest
 ra?ngs
 possible).
 The
 ra?ng
 companies
 later
 admi2ed
 their
 mistake,
but
the
damage
had
been
done. To
 cover
 their
 bases,
 investors
 bought
 credit
 default
 swaps
 from
 insurance
 companies.
 These
 insurance
 plans
 covered
 mortgage
 securi?es
 in
 case
 they
 defaulted
 and
 they
 reimbursed
 investors
 for
 their
 losses.
 AIG
 was
 one
 of
 the
 companies
that
issued
many
of
these
credit
default
swaps.
Like
 everyone
else,
AIG
believed
the
housing
boom
would
 con?nue
 indefinitely
and
considered
insuring
CDOs
to
be
a
safe
bet.
 In
 early
 2006,
 the
 housing
 bubble
 showed
 some
 signs
 of
 defla?on,
 against
 expert
 predic?ons
 that
 home
 ! prices
 would
 con?nue
 to
 rise.
 With
 less
 demand
 in
 the
market,
banks
began
to
 reduce
 supply
 of
 loans
 therefore
 ending
 some
 loose
 lending
 prac?ces.
 M a n y
 r e c i p i e n t s
 o f


for
 borrowers
when
 market
 condi?ons
were
favorable,
but
 as
 the
market
 slowed
 their
 mortgage
 rates
 increased
 to
 beyond
 what
 they
could
 afford.
Americans
piled
with
 debt
found
they
 had
no
other
choice
but
to
default
on
their
mortgage
loans. The
 en?re
 situa?on
 was
 a
 mess
 of
 hidden
 landmines
 within
 the
 financial
 sector.
 Banks
 loaned
 their
 mortgages
 to
 investment
 banks
 and
 Fannie
 Mae
 and
 Freddie
 Mac.
 These
 companies
cut
them
up
and
sold
them
as
securi?es,
hiding
the
 dangerous
 subprime
 mortgages
 in
 each
 security
 like
 a
 landmine.
 Investors
 and
 hedge
 funds
 then
 bought
 up
 the
 securi?es,
believing
that
 they
were
rela?vely
safe
thanks
 to
a
 miscalcula?on
 by
the
ra?ng
agencies.
Then
AIG
insured
 these
 securi?es,
 based
 on
 the
 same
 assump?on
 that
 they
 were
 “safe.”
As
the
housing
market
started
to
fail,
it
began
to
trigger
 the
financial
land
mines. At
first,
the
effects
 were
subtle:
Two
 Bear
 Sterns
hedge
 funds
 collapsed
in
June
2007,
and
in
 
 August,
2007
 the
lending
firm
 Countrywide
 had
 to
 be
 rescued
 by
Bank
of
 America
 from
 the
 crushing
 weight
 of
 its
 mortgages
 in
 default.
 Congress
 addressed
 the
issue
 briefly.
Overall,
there
did
 not
 seem
to
 be
 much
 cause
 for
 alarm–yet.
 In
 2008,
 investors
 began
 selling
 stock
 in
 Bear
 Stearns.
 Following
 rumors
 that
 the
 firm
 was
 drowning
in
 toxic
 securi?es;
 its
 stock
 price
dropped
 to
 $30
a
 share
from
$171
a
year
earlier.
At
the
insistence
of
the
Federal
 Reserve,
JP
Morgan
Chase
bought
Bear
 Stearns
for
 $2
a
share.
 The
 government
 was
 forced
 to
 buy
 out
 Freddie
 Mac
 and
 Fannie
Mae
in
order
to
keep
them
afloat.


In
 
 September
 2007,
 Lehman
 Brothers,
 another
 Wall
 Street


BRUIN BUSINESS REVIEW 24

!

point
drop
in
U.S.
DOW
Jones
history.
As
an
increasing
number
 of
 banks
 buckled,
a
new
program
was
presented
to
 Congress.
 The
Troubled
Asset
Relief
Program
 (TARP),
which
 required
 the
 same
 $700
 billion
 of
 funding
 but
 integrated
 the
 oversight
 requirements
 Congress
 sought.
 Congress
 approved
 the
 program,
and
it
seemed
to
assuage
the
financial
landmines.

DON’T
LET
THE
FINANCIAL
 SECTOR
HAVE
THE
ALL
FUN

THEN
THE
CDOs
HIT
THE
FAN In
 
 September
 2007,
 Lehman
 Brothers,
 another
 Wall
 Street
 giant,
 declared
 itself
 bankrupt.
 The
 Federal
 Reserve
 had
 considered
 a
 bailout
 but
 declined
 because
 it
 feared
 poli?cal
 repercussions.
 The
 fall
 of
 Lehman
 Brothers
 shocked
 Wall
 Street.
In
 only
 two
 days
 later,
the
 global
 insurance
 giant
 AIG
 was
 on
 the
 verge
 of
 bankruptcy.
 In
 light
 of
 these
 massive
 failures,
 and
 the
 fragile
 state
 of
 AIG,
 the
 Federal
 Reserve
 believed
 it
 could
 no
 longer
 afford
 inac?on.
Consequently,
AIG
 received
 $85
 billion
 in
 federal
 bailout
 money,
 which
 the
 Obama
Administra?on
asserted
would
avoid
a
global
economic
 collapse.
Soon
 arer
the
AIG
debacle,
banks
began
 crashing
by
 the
dozen. 


!

Former
 Treasury
secretary
Henry
Paulson
and
Federal
Reserve
 chairman
 Ben
 Bernanke
 proposed
 a
 $700
 billion
 bailout
 program
 before
 Congress.
 When
 Congress
 rejected
 the
 proposal
 due
 to
 the
 lack
 of
 oversight
 s?pula?ons,
 the
 Dow
 Jones
 Industrial
 Average
 plummeted
 778
 points,
 the
 largest


Just
 when
 the
 economy
 seemed
 to
 have
 bo2omed
 out,
 the
 American
 auto
 industry
 collapsed.
 Already
 weakened
 by
 foreign
 compe??on,
American
 car
 companies
were
sha2ered
 by
 the
 massive
 drop
 in
 consumer
 spending
prompted
 by
 the
 recession.
 Chrysler
 and
 General
 Motors
 (GM)
 CEOs
 stood
 before
 Congress
 and
 urgently
 requested
 help.
 President
 Obama
 forced
 GM
 and
 Chrysler
 to
 declare
 chapter
 11
 bankruptcy
 if
 the
 they
 were
 to
 reconstruct
 themselves.
 Consequently,
both
 companies
made
massive
 cuts
 at
 the
 cost
 of
millions
of
American
jobs.

ARE
WE
THERE
YET? Throughout
 2009,
the
 U.S.
government
 spent
 more
 than
 $10
 trillion
 dollars
 on
 economic
 recovery.
Earlier
 this
 year,
history
 was
made
twice
as
Barack
Obama
took
office
and
 the
Federal
 Reserve
 cut
 interest
 rates
 to
 less
 than
 one
 percentage
 point
 above
zero.
The
Obama
Administra?on
a2empted
 many
?mes
 to
 rescue
 the
 economy,
 one
 of
 its
 most
 pronounced
 efforts
 being
 the
 American
 Recovery
 and
 Investment
 Act
 of
 2009,
 which
authorized
increased
spending
on
rescuing

mostly
large
 financial
 firms.
 But
 the
 increasing
 number
 o}anks
 deemed
 “troubled”
or
near
 bankruptcy
by
the
U.S.
treasury
seemed
 to
 increase
 every
day:
 252
 the
 fourth
 quarter
 of
 2008
 and
 305
 and
416
 in
the
first
and
second
quarters
of
2009,
respec?vely.

 Americans
were
 further
 skep?cal
 their
 tax
 dollars
 were
 being
 used
 effec?vely
 and
 efficiently
 when
 reports
 were
 released
 revealing
 that
 AIG
 had
 paid
 $165
 million
 in
 bonuses
 to
 execu?ves
 
 (including
 those
 that
 had
 contributed
 to
 the
 company’s
downfall).
Bank
“stress
tests”
conducted
by
the
U.S.
 Treasury
 revealed
 that
 the
 majority
 of
 banks
 s?ll
 needed
 government
aid
to
survive
the
recession.
 During
 summer
 2009,
 things
began
 to
 improve.
 The
 abysmal
 housing
 market
 bo2omed
 out
 and
 began
 to
 show
 signs
 of
 recovery.
The
Dow
 Jones
Industrial
 Average
hit
 10,000
 points
 on
 October
 14,
 2009,
 and
 it
 con?nues
 to
 move
 upward.
 Furthermore,
Wall
 Street
 companies
 that
 were
 bailed
 out
 by
 the
government
believe
that
they
will
soon
be
able
to
pay
their
 debt.


BRUIN BUSINESS REVIEW 25

TERMS
YOU
SHOULD
KNOW: BE
AN
EXPERT
ON
THE
RECESSION

Subprime
mortgage:
loans
made
to
prospec?ve
homeowners
with
inadequate
credit;
high
risk
of
 default

Adjustable‐rate
mortgage:
home
loan
whose
interest
rate
can
change
at
the
bank’s
discre?on Mortgage‐backed
securiUes:
securi?es
whose
value
came
from
mortgage
payments;
the
most
 common
type
were
collateralized
debt
obliga?ons

Collateralized
debt
obligaUons
(CDOs):
securi?es
that
were
made
up
of
different
pieces
of
 mortgages,
some
of
which
were
subprime

Triple
A
RaUng:
ra?ng
given
to
securi?es
that
are
considered
to
be
safe;
this
ra?ng
was
mistakenly
given
 to
mortgage‐backed
securi?es

AIG:
an
American
insurance
giant
with
global
?es;
the
Obama
Administra?on
feared
a
worldwide
economic
 meltdown
had
it
been
allowed
to
fail

Fannie
Mae
and
Freddie
Mac:
government‐sponsored
enterprises
that
buy
mortgages
from
banks;
 became
increasingly
risk‐inclined
during
the
Bush
administra?on

Bear
Stearns:
Wall
Street
investment
bank
that
played
heavily
in
the
mortgage‐backed
security
exchange;
 its
stock
value
plummeted
arer
two
of
its
hedge
funds
collapsed;
eventually
bought
by
JP
Morgan
Chase
Bank

Washington
Mutual:
highly
successful
commercial
bank
that
par?cipated
in
the
subprime
mortgage
 fiasco;
became
the
biggest
bank
failure
in
U.S.
history
due
to
defaulted
mortgage
loans;
was
bought
by
JP
 Morgan
Chase
Bank

Alan
Greenspan:
chairman
of
the
Federal
Reserve
from
August
1987
to
January
2006
who
lowered
 interest
rates
arer
September
11,
2001,
and
warned
about
holes
in
the
housing
bubble

Ben
Bernanke:
Greenspan’s
replacement
and
current
chairman
of
the
Federal
Reserve;
took
hands‐on


approach
to
managing
the
crisis
and
made
many
bailouts
with
the
Federal
Reserve
that
were
not
included
in
 the
Congressional
fund

BRUIN BUSINESS REVIEW 26