When I came to the Street, my friends weren’t surprised because I had been interested in markets for years, even trading stocks and options while there were still fixed commissions and you had to go down to the brokerage office to watch the ticker tape go by as an electronic “crawler.”
They were surprised when I didn’t have anything for them when they asked for stock tips. In fact, I was spending every waking hour working on systems and deal structures in mortgage land, so even my own money stopped being in stocks, and just sat in money market funds. But they kept asking, assuming I must be a stockbroker.
After a year or two of patiently responding that I didn’t and couldn’t pay attention to stocks, I came up with an answer.
When someone assumed I was a stockbroker because I worked for a Wall Street firm, I explained that I was really a “financial engineer.”
About half the time, the response was a blank look with no more questions about stocks, but some people were actually interested in talking about what I was doing. Then we could have an interesting conversation about cash-flow modeling, allocations among bond tranches, simulations of future investment performance, or a dozen other aspects of my very intense job. That choice of job title began for me in 85 or 86. As far as I know, no one else was describing their job that way at the time.
Fast forward ten years or so, and I began to see that places like Pace University (in downtown Manhattan; big in evening classes) were offering courses in “Financial Engineering”… I joked that I should have trademarked the phrase.
Last night, as I was filling out the basic listing information for my book Finance Monsters, I found out that Financial Engineering is now fully matured as a descriptive phrase.
The stodgy world of old-fashioned paper books, libraries and bookstores has a categorization system, a system that probably ends up eventually translated into a Dewey Decimal code. And there it was — as a category in BISAC (Book Industry Standards and Communications). So now you know. My personal and industry history of the securitization business and its spectacular rise and fall will be listed under the BISAC code for “Business & Economics / Finance / Financial Engineering”.
Would I be pulling an Al Gore to say “I invented that?”