by Brian DeChesare Comments (89)

Will Coronavirus (COVID-190) Result in Canceled Summer Internships and Rescinded Full-Time Job Offers?

Coronavirus Canceled Summer Internships

Let’s skip the clever introductions and get right into it: yes, the coronavirus COVID-19 pandemic could easily result in a global depression and an even bigger crash of the financial markets.

And yes, this means that all summer internships and full-time jobs this year, and maybe even next year, are potentially at risk.

As I publish this on March 18, 2020, it has become clear that the global virus outbreak is far worse than anyone expected back in January or February

Well, except for me – I predicted 50-100 million deaths and massive disruptions back in mid-February.

There’s a lot to cover here, but the main topics are as follows:

  • Why most media commentary quoting “mortality rates” and estimating “worst-case scenarios” has it wrong.
  • Short-term and long-term economic and market impacts.
  • Why banks could cancel or postpone summer internships or rescind full-time offers – and why banks are already canceling some job offers.
  • What you can do about it if your internship or job offer is rescinded.

Why No One Trusts the Mainstream Media, Part 523

Most news reports and commentators have been making a simple math/logic mistake when it comes to “virus predictions”: they ignore second- and third-order effects.

For example, they’ll say that the mortality rate is ~1%, assume that 50% of the population will get infected, and then say Population Size * 50% * 1% people will die.

While this would be a human tragedy, it’s not the real problem.

The real problem is that pandemics often cause complete chaos everywhere else in health, political, and economic systems:

  • If 20 million people end up in overcrowded hospitals, what happens to people who need surgery or treatment for other reasons? Or, what if 50% of doctors and nurses get infected and can’t even work? The mortality rate will be far above 1%.
  • What about the millions of people who will lose their jobs as restaurants, retailers, airlines, and other businesses are forced to close as part of the response to the virus? What if they suddenly need medical treatment?
  • All three individuals who might win the U.S. Presidential election in November are over the age of 70, one has already had a heart attack, one is crazy/delusional, and one may be senile. What happens if they all get the virus? What if some or all of them die?
  • If there’s a massive bailout and even more QE, how will that affect the value of the USD? How does that change if other countries also print massive amounts of money and bail out companies?

I could keep going, but I think you get the idea.

To be fair, there could also be positive developments that change some or all of these points:

  • If “social distancing,” quarantines, and country-wide lockdowns work, then maybe the virus will burn out more quickly than expected.
  • While a vaccine is far away, there are signs that drugs used for other purposes, such as remdesivir for ebola or chloroquine + zinc for malaria, may be effective treatments.
  • With better testing, there might not be as much of a need for quarantines, which could reduce the economic damage.

My basic point is that the range of possible outcomes is much wider than most people are currently expecting.

The worst health crisis in human history, the Black Death, killed ~60% of Europe’s population and upended economic and political structures for centuries.

I always assume the worst-case outcome in life, but even I don’t think that a 60% worldwide mortality rate (~4.7 billion people dead) is realistic.

Even with massive doctor/nurse/bed/supply shortages and complete economic collapse, we might be looking at 5-10% of the global population dying (~400 – ~800 million people).

In the best-case scenario, we might see a tiny fraction of that number die (< 10 million), and there might be a recovery by the end of the year.

Short-Term Economic and Market Impacts

Unlike the 2008 financial crisis, this one is a complete supply/demand shock that directly affects all individuals and businesses.

That means that a technical recession – two consecutive quarters of GDP contraction – is a near certainty.

But if this drags on for years, it could get much worse than that: what if global GDP falls by 15% or 30% (think: Great Depression)?

The other factor here is that monetary policy cannot do anything, as the Fed just found out when it slashed interest rates and… the markets fell even more.

A highly contagious virus does not care whether interest rates are positive, zero, or negative.

The government could take some measures to reduce the impact, such as:

  • Waive or defer interest payments and taxes.
  • Send free money to everyone (apparently a Republican idea now?!).
  • Bail out companies like airlines that stupidly spent billions on share repurchases instead of saving up for a rainy day.

Spain and Italy have suspended mortgage payments and other bills, but this one might not be possible in the U.S. because so many mortgages are collateralized into commercial mortgage-backed securities (CMBS).

In terms of the financial market impact, yes, the S&P 500 has already fallen ~30% from its peak earlier in the year, but I don’t think it will stop there.

Even after this ~30% decline, ratios like the Shiller P/E and Market Cap / GDP are still well above their historical medians.

If you combine an additional multiple decline with a 10-20% drop in earnings due to the recession, I would not be surprised to see the S&P 500 in the 1,000 – 1,500 range later this year.

On the other hand, other equity markets worldwide were more reasonably valued than the U.S. market before this crisis struck.

So, rather than a 70% decline from the peak, the declines might be more like 30-50% elsewhere.

I’ll end this section with the good news: there has been a much sharper decline than in past bear markets, which means that a faster rebound may be more likely.

The 2008 financial crisis took years to develop, with housing problems appearing in 2006, credit markets freezing up in mid-2007, and banks finally failing in 2008.

And then it took years for hiring to recover since everyone was paranoid about a double-dip recession.

In our current situation, a sharper downward shock and faster recovery seem more likely.

Long-Term Economic and Market Impacts

Even if this ends up being a short recession that doesn’t turn into a depression, there will be a profound long-term economic impact:

  • The Death of Globalization: Companies will realize the risk of outsourcing everything to China, relying on China for medical supplies, and so on. More production will return from overseas, and the U.S. and China might eventually “decouple” completely.
  • Lower Operating Margins and Higher Cash Balances Worldwide: As a result of the above, labor and supply costs will increase, pushing down margins (and likely reducing returns in the financial markets). When companies get bailed out, they should be restricted from spending their cash on share repurchases, executive bonuses should never be tied to stock performance, and industry-wide minimum cash balances should be required.

Admittedly, this point is more of my “personal wish list” – some of these restrictions may come to fruition, but most will not.

  • Medicare for All: I expect that universal healthcare in the U.S. will gain increased support after this crisis, even though outcomes depend more on the country’s response than on its healthcare system (look at South Korea vs. Italy).
  • Remote Work Everywhere: Many companies will realize that in-person meetings are expensive and pointless and move many employees to remote work. This one benefits online education companies like us, as well as videoconferencing companies like Zoom.

In short, the coronavirus will be a catalyst that accelerates all the underlying problems in the economy and forces change.

But the most significant long-term impact may be that markets will lose faith in central banks to “solve” everything.

As we’ve seen so far, their crisis response has done nothing to calm markets.

Even if they make rates more negative or purchase even more assets, nothing will fix the underlying problems.

I don’t think central banks will “die,” exactly, but people will increasingly find ways around the current system, whether that’s via precious metals, crypto, or something new.

So… What Will Banks and Other Finance Firms Do?

So far, the large banks have sent out emails stating that 2020 summer internships are “proceeding as planned.”

I would take these claims with a grain of salt.

It’s not that they’re trying to mislead you; it’s that they simply don’t know.

The last time this happened, I lived through the story directly as I watched co-workers get laid off and internships get canceled:

  • Banks slowed down or froze hiring in mid-2007, but they still said everything was OK.
  • In early 2008, right as Bear Stearns collapsed, banks made cuts, reduced internships, and told Analysts not to expect promotions. Everything was not OK.
  • After Lehman failed in September 2008, banks made more serious cuts and sharply reduced hiring at all levels. Yeah, everything was really, really, really not OK.

If the situation worsens significantly over the next 1-2 months, internships will not “proceed as planned.”

Banks can offer full-time employees work-from-home options, but they’re unlikely to do this with interns because… interns don’t know anything.

“Remote work” only works if you already know the job, you have the required contacts, and you can navigate the normal office environment.

I’ve seen some suggestions online that internships will be conducted remotely, but I think that’s wishful thinking.

Instead, if the outbreak does not improve at all, banks are likely to cancel or postpone summer internships.

Since universities have been canceling classes or moving them online, the academic schedule could be delayed at all levels – making it easier to delay internships.

As far as summer 2021 internships: recruiting will proceed for now, under the assumption the virus will be under control by then.

But banks will rely even more on HireVue and real-time video interviews rather than the traditional Superday.

In terms of full-time job offers, it’s safe to assume that lateral hiring is shut down for several months.

Also, I know for a fact that some banks have been retracting lateral offers they’ve made recently (assuming the person hadn’t started working yet).

I think it’s less likely that banks will rescind offers for full-time jobs starting in the summer this year because they’re not expecting the crisis to last that long.

In the end, everything comes down to deal activity.

If deals eventually pick up, banks will need more staff to execute them.

But if deal activity stays muted for months, with no turnaround in sight, banks will maintain the hiring freeze and start reducing their current full-time staff.

The good news for you is that mid-level bankers (more senior Associates and VPs) tend to suffer the most in downturns because they’re more expensive than Analysts, but they also don’t generate revenue (unlike MDs).

In theory, banks could run any deal with just an MD and an Analyst.

So, if cuts begin, banks will start with under-performing Associates, VPs, and MDs before moving onto Analysts.

At the bare minimum, though, you should expect a hiring freeze across the entire global economy for the next few months.

And What Can You Do in Response?

This one’s tricky because when there’s a complete demand/supply shutdown, there is not much you can do.

Back in 2008, my advice usually went like this:

  1. Look for another internship or job in a sector that isn’t hurting so badly, such as corporate finance at a normal company or audit at an accounting firm.
  2. Then, lateral your way into IB as the economy improves, deals pick up, and banks need to hire more people.
  3. And if that fails, think about Master’s or MBA programs to give yourself another shot at recruiting.

But this time around, these steps don’t work as well:

  1. “Jobs in other sectors” won’t exist if absolutely no companies in the world are hiring.
  2. Lateral hiring at banks won’t exist if there’s no deal activity.
  3. Master’s, MBA, and other university programs may be postponed indefinitely.

So, you cannot do much at the moment other than “wait and see.”

Going back to school is potentially viable, but if you need to take on massive debt to do so, it’s probably a bad idea.

You could still network remotely, get back in touch with old acquaintances and contacts, and study and prepare for interviews.

But if everything is frozen for a few months, you’re not going to see direct results for a while.

So, the best response here depends on your top concern:

  1. Are you most worried about your career being delayed or pushed off the tracks?
  2. Or are you more worried about money, i.e., surviving without a job for a while?

If it’s #1, then all you can do is monitor hiring trends in different industries.

If normal business activity picks up before deal activity, then you may want to consider some of the options mentioned above: corporate finance, Big 4 firms, audit/accounting roles, or anything else that’s less tied to the financial markets.

Then, follow the tried-and-true path of lateral hiring.

If your top concern is money, then you should look for part-time/contractor/freelance roles online immediately.

We published an article about freelance financial modeling work last year, and I strongly recommend reading it to get ideas for how to approach this.

It doesn’t have to be financial modeling: it could be any work that you can do remotely, from graphics to music to bookkeeping to tutoring kids to teaching languages to book editing.

Even if outdoor human activity disappears, people will still be doing something with their time, which often means “on the computer all day” – which means more demand for online services.

The Bottom Line: My Coronavirus Predictions

To sum up everything, my predictions are as follows:

  • Near-Term Economic/Market Impact: Negative global GDP growth for the year, a 5-10% contraction in the U.S., and a 50-70% decline from peak S&P 500 levels, with 30-50% declines in non-U.S. markets. But there may be a quick rebound depending on how the crisis plays out.
  • Long-Term Economic/Market Impact: Globalization retreats even further, margins fall, remote work rises, healthcare in the U.S. is potentially overhauled, and markets stop trusting central banks. Ideally, companies would also be restricted from repurchasing shares, awarding executives based on stock performance, etc., but that is probably wishful thinking.
  • What Banks Will Do: There is a decent chance that summer 2020 internships will be canceled or postponed, but I don’t think they’ll rescind full-time offers quite yet. Summer 2021 recruiting will probably be conducted remotely for now. Hiring is effectively frozen everywhere now; the real question is whether or not banks will start
  • What You Can Do: Keep studying/preparing, re-kindle old contacts, and if normal business activity resumes before deal activity, lean heavily on lateral hiring and get into IB/PE via alternative paths such as corporate finance and Big 4 firms.

One final bit of good news before closing: if you’re graduating soon, I don’t necessarily think your career will be as hindered as those of students who graduated in 2008-2009.

Since everything is shut down, you won’t need to “explain” quite as much why you couldn’t complete an internship or full-time job.

Back then, the crisis impact across industries varied, and those who were let go or who had rescinded offers couldn’t necessarily explain their way out of it.

OK, that’s it.

Thoughts? Comments? Questions? Have I gone insane?

Comment away below…

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. If we are currently a first year graduate trainee in Audit at a Big 4 firm, and have a graduate offer for Corporate Finance at another Big 4 firm in London (in either of their Debt & Capital advisory, M&A, or Infrastructure advisory divisions), would you suggest still taking that offer if CF is our ultimate goal? Also, which division of the 3 mentioned would be ideal to join?

    I am aware that audit is a safer option at this point but I’m told that the Big 4 tend to be reasonably placed to weather the impact on CF through their Audit functions. Is that true? Or is likely that CF graduates could lose their jobs later in the year or next year if deal flow doesn’t pick up for the firm in the mid market?

    Also, I was planning to study for the CFA Level 1 and was wondering whether you think that adds much value to a career in Corporate Finance/M&A? Is an MBA a better option?


    1. Yes. Normally M&A is the best choice, but in the current environment, Debt & Capital Advisory might be better or at least more stable. I think Big 4 firms will hold up better than many other companies, but you’re correct that CF is still riskier than audit. Mid-market deal flow has not slowed down as much as it has for much larger deals, though. The CFA does not help much for these roles unless you’re a total career changer. An MBA is useful mostly if you’ve worked for a few years and want to get into IB as a career changer.

  2. Thanks for the great article

    For graduating 1-year finance masters students in Europe that have already accepted FT offers in IB, do you think it is still a worthwhile option to consider a second masters in e.g. management in case their offers get pulled? Or would two masters seem odd to recruiters? Thanks

    1. I wouldn’t bother because I don’t think that banks will rescind full-time offers at this stage. And if they do, completing another Master’s degree might not even help you because that would imply that economic conditions get even worse.

  3. Hi. Thank you for this article. What is your view on cold-emailing/calling to boutique IB/PEF during this unexpected outbreak for a summer internship or part-time internship? As you said, I think internships there are highly dependent on deal flows, but given that COVID-19 is crashing the market, I don’t think the flows would be good these days. Also, I am a junior (rising senior), but could not land any offers yet. In that case, is it possible to aim for summer analyst positions by delaying graduation and full-time positions at the same time? Thanks!

    1. I think it will be tough to find smaller firms that are still hiring right now, even for remote internships, unless you already have significant experience and don’t need to be trained. You would probably have better luck targeting normal companies in roles like corporate finance, because those jobs do not depend on deal activity.

      Yes, you could delay graduation, but for that to work, you’d have to be recruiting for summer 2021 internships *right now* since banks start the process a year in advance. So, if you don’t have enough experience to be competitive right now, a better strategy is to aim for Big 4 / corporate finance / related roles instead and then move into IB as a lateral hire.

  4. Hi Brian,

    Thanks for the article. Great read! Do you think the market is poised for another sharp decline sometime soon? Maybe in the wake of a second wave of infections? Also, given that a lot of firms will be less valuable is there a chance M&A activity could pick up a few months from now?


    1. Yes. Most companies haven’t even reported Q1 earnings yet, let alone Q2. Few firms want to sell at low valuations, so I doubt that M&A activity will pick up just because valuations are lower.

  5. Hi Brian,

    I want to get some insights from your regarding my situation. I have already graduated from my bachelors at a semi-target in the US and now have 1 year work experience in venture capital, 6 months in management consulting, and some work experience in market research (also have some MO analyst internships from my bachelors). As well, I have completed two levels of the CFA. I have decided I want to move into the investment banking industry as I enjoy the more transnational work and complex modelling involved with IB deals, so I decided to pursue a MIF and transition to IB in the UK. I was accepted to a target uni (LSE, Oxford, LBS, HEC) and will start later this year. However, I was not able to secure an IB internship this summer because I was occupied with masters applications and working in late 2019 and now with covid19 my chances at landing a boutique are diminishing as well. My questions for you are: given my current experience would I have a good shot at London BB and non-BB come the start of my program? Should I focus on only IB internship positions or as well FT? If I can’t land a boutique in time, what should I do over the summer to increase my chances come recruitment time (I already have your IB and networking guide)? Are there any new tactics you would suggest for networking with the current pandemic, and is networking as effective in London as the US? Thanks, I really appreciate the advice!

    1. Yes, you probably have enough experience to at least win interviews for IB roles. Focus on internships because there’s no telling what will happen with FT roles. I don’t think you can realistically win a 2020 summer internship in the current environment because no firms are hiring new interns for this coming summer. Maybe you can find a small PE/VC firm willing to let you work remotely, but I don’t think banks will be hiring. You can’t really do anything new to network other than moving even more to the phone and email. Networking still works in London, but contacting alumni is sometimes less effective because the relationship means less there. So you may have to be more creative when finding people on LinkedIn.

  6. Hey Brian,

    I’m a sophomore at a target school recruiting for summer 2021 internships. I have an offer from RBC IB in NY that expires before any of my interviews with BBs. Given the incoming recession, is it too risky to reject RBC in hopes of landing another offer — would banks hire fewer interns for 2021? I’m not sure I want to stay in finance, which is why I care about the brand name of a BB. Or is the difference not that significant? Thanks!

    1. Yes, I would just accept the RBC offer because there’s no telling what will happen with internships next year. There’s a huge range of possible outcomes if there’s a second wave vs. no second wave, prolonged recession/depression vs. not that bad, etc.

  7. Are you still positive on tech roles (particularly programming and data science) for the long term? Startups and medium sized tech companies have taken a hit due to both coronavirus and issues for the startup/VC industry generally (which is consistent with what you said in the 2019 Financial Job Outlook – “I expect the tech startup market to take a hit over the next few years”). Any thoughts on what the impact will be on the coding bootcamp industry? I have heard that bootcamps have transitioned to full remote learning (many already had remote learning offerings in addition to in-person programs), but I am sure it is a lot tougher to get a job coming out of a bootcamp right now and will continue to be over the coming months. Do you think completing a coding bootcamp and getting a job at a tech company (or in a tech role at a non-tech company) will still be a viable path once the crisis recedes and the economy improves?

    1. Yes, but startups and mid-sized tech companies definitely look worse now after the virus crisis and VC debacles like WeWork, Uber, etc. The FAANG companies should still be hiring at a brisk pace because they have the cash and scale to weather this type of crisis.

      Coding bootcamps and that path into tech will definitely take a hit. Without the in-person component, a coding bootcamp is effectively the same as an online course: useful, yes, but not a “stamp of approval” in the same way, and a less likely path into a job. A better way of getting a job right now might be to work on your own projects and post the source code on Github.

      But once the crisis abates, this part of the market should recover because companies of all sizes will need more tech workers as more and more work becomes remote.

  8. Avatar
    Ronald McDonald

    BofA announced that it won’t rescind offers for its summer interns. Do you think other banks will follow this trend?

    1. Possibly, but I don’t expect them to stick to that if June comes around and NY is a disaster zone. I still think banks are more likely to delay internships as a Plan A and then cancel them as a Plan B.

  9. An update: HSBC canceled all internships and graduate positions in Mainland China and Hong Kong. That is awful!

    1. Sorry to hear that. :(

    2. Brian, I have a internship at a BB this summer, but due to the uncertainty of covid-19 I might not be able to graduate in 2021. Do you know if it is possible to defer a SA stint for one year?

      1. Usually, no, you can’t defer summer internships, but with this type of crisis, banks might be more open to it. However, I think you’re taking a big risk by asking for a deferral right now – it’s better to start or complete the internship and then say that because of university delays or scheduling issues brought on by the virus, your graduation date changed, and then see if the bank can let you start at a different time.

  10. HI Brian,

    It’s a great article and I really appreciate your insight.

    I got a corporate finance internship in a big bank. Meanwhile, I received a senior product manager internship offer at Amazon.

    I would love to hear your thoughts on whether Amazon would be a good choice. Since I have no finance background, as you mentioned, doing a finance remote internship would be very hard and I am still not sure whether this bank would cancel its internship later.

    Thank you!

    1. The Amazon offer is safer in this environment because Amazon is actually hiring, unlike most companies (yes, in delivery/warehouse/logistics, but still, they will also need more engineers and PMs).

      If it were a smaller tech company or startup, I don’t think it would make much of a difference. But the chances of the Amazon internship being canceled are lower than those of the bank internship being canceled.

  11. Hey Brian, when do you think lateral hiring for IB will pick back up this year, if at all?

    1. Best case would be in the late summer or fall. Worst case would be not at all until next year.

  12. Hi Brian,

    Thanks for your article – really helpful.

    I noticed you talk a lot about the IB side of things, but wondering what your take is on S&T jobs now. I am due to start FT at a BB (London) in S&T this July. As of now, HR is promising that ‘our offers are not affected’ by the situation and that we will proceed even if things ‘look a little different’ by July.

    How much should I trust HR at the moment? What are the odds HR is still good for this if the situation continues to look like this in a few months? Thanks.

    1. At large banks, I don’t think there’s much of a difference. S&T is probably in a relatively better position than IB because volatile markets tend to produce higher trading commissions. But deal activity tends to dry up in volatile markets.

      I would definitely not “trust” HR just because they’re saying things are OK for now, but I don’t know what you can do, realistically, since hiring everywhere else is also frozen or shut down. Maybe try to find some type of online/remote trading/finance role as a backup plan?

  13. Hey Brian,

    In London, do you think there will be an increase in off-cycle internships being offered by Banks in IB around Aug/Sep time as they won’t have any summer interns to extend FT offers to and would rather test more off-cycle interns for FT positions?

    As opposed to hiring a full FT analyst class through interviews / AC / Super days alone

    1. Yes, that’s possible. Off-cycle internships are already more common in London, and if internships get canceled or delayed, or banks decide not to extend that many FT offers, there may be more off-cycle roles, especially if the economy recovers.

      1. Thanks, for the reply

        When do you think will be the best time to try and bag these via networking (as I’ve seen on this site before) – June/July time (when summer internships have potentially been pulled) or earlier?

        1. It’s tough to say because no one knows what the virus situation will be like by June/July. If things are improving but internships have been canceled, yes, maybe. If not, then you may have to wait a few more months.

  14. Avatar
    Jason Joseph

    What happens if a job offer that has been accepted is rescinded. You quit your previous job to take the new job and since you never started, you are not eligible for unemployment benefits. A one time $1200 check does not compensate for the lack of unemployment benefits.

    1. Well, yes, this is the problem with accepting alternate full-time job offers at the moment, even if lateral hiring is not frozen everywhere. It’s not a great idea to move around right now with all the uncertainty. Employers can do whatever they want since a job offer doesn’t mean you officially work there yet.

  15. Avatar

    Any thoughts on how this will affect market makers / prop shops in Chicago?

    1. In theory, market volatility should help. Equity derivatives traders have done very well so far this year because volatility is so high. However, if the market plummets again and volatility remains low even when the market is much lower, that will hurt all trading activity. You are probably in a better position than students completing deal-based internships, but anything could happen in the next ~2-3 months.

      1. Avatar

        Thank you, Brian! That’s encouraging to hear. I also just heard my internship was going remote — can’t fathom what a remote trading internship will look like, but hey, it’s better than getting it cancelled!

  16. Dear Brian, what about jobs in asset management? Specifically, I accepted a summer internship offer in equities at a bank-owned asset manager in London. Do you think they will seek to cut headcount or will they have increased activity and need for work due to the stock market shocks? Any advice? Many thanks.

    1. Not sure about that one because most of these firms have not announced much, but from what I can tell, summer internships still appear to be on. There will be increased activity and more of a need to speak with clients because of the massive market volatility right now, but I don’t think that really affects interns. If the firm doesn’t hire that many interns to begin with, it’s easier to keep them around or even make it work-from-home… unlike a big bank, where doing that for hundreds of students might not be practical.

  17. Avatar
    Phillip Ryan

    Thanks for the article Brian. Not exactly about IB, but what you think about internships in IR? Since the summer is fundraising season for most PE companies and the interns in this area are full of research to do, do you think it’s a safer area too?

    1. I think everything is at risk, and fundraising will definitely be down, but you’re probably at less risk than IB interns because funds are always looking to raise money even if there are no deals.

  18. Thoughts on ‘infinity QE’ and its propping of the share markets? Would an S&P 1,000-1,500 range still be feasible/likely?

    1. It’s a terrible idea that won’t solve anything. Bubbles bursting periodically are good because they reset markets and remove excesses. Unlimited QE will result in the same thing that happened after 2008: no real problems get solved, but the monetary base skyrockets, rich people benefit, and income/wealth inequality grows.

      Except… this time, I think it won’t work as intended. Buying an infinite amount of assets won’t help small businesses that have had to shut down or individual humans. It benefits large public companies and their shareholders, but no one else. And the market has been falling each time central banks have announced more stimulus.

      The S&P 500 falling to 1,000 – 1,500 is still very plausible. Companies haven’t even reported Q1 earnings yet! Just think about what happens when Q1 earnings are terrible and Q2 earnings are down 50% or 80%. Or what about when the unemployment rate reaches 10% or even 20%? I think this is far from over.

  19. Great post Brian.

    Given your lack of faith in central banks and the USD, What are your thoughts on shorting treasuries via an inverse bond ETF?

    1. I think it’s a bad idea to short any asset where the buyer (the Fed/central banks) has an unlimited amount of money and can print more at will. Technically, the US can never default on its debts because the Fed can just keep printing money forever, even if its Balance Sheet grows to $10 quadrillion or more.

      But that will cause inflation/hyper-inflation/currency devaluation eventually, so it’s better to bet on one of those. Long gold is the obvious/safe play, but in the long term, once the liquidity squeeze and race for dollars is over, I think the USD will fall against other major currencies. Maybe also something like TIPS or real estate. Not sure if there are other good ways to bet on inflation.

      1. Avatar
        Jason Chen

        Brian, wouldn’t stocks also be a hedge against inflation?

        1. People say that, but I am skeptical. There are plenty of periods with high inflation that have also had terrible stock performance. Look at the 1970s to start with…

  20. They actually cancelled Santander’s CIB internship 2020 and promised me an AC for 2021’s internship. Is HR having a laugh…

    1. Sorry to hear that. :(

  21. Brian,

    Appreciated your (as expected) thorough analysis here. I am set to start as a Generalist Associate at a MM firm in August (post-MBA). The firm’s groups with historically heavy deal flow primarily do equity deals, not sponsor sell-side M&A. No word yet from HR if there have been any addenda to our start date, but given the nature of the firm’s deals, should I be more concerned than the average bear about either a) losing my offer or b) having zero deal flow during the crucial first year? Thanks

    1. Potentially, but again, I think it’s unlikely that firms are just going to cancel/rescind full-time offers because most people don’t think this will last for 2-3 years. Governments just can’t keep people quarantined that long.

      I would be more concerned about not having much deal flow in the first year because equity markets tend to shut down completely during crises (whereas smaller M&A deals can still take place). But given the backlog of companies set to go public, there should be a good number of deals when the markets open again.

  22. Hi Brian, what do you think will happen to leveraged finance groups at banks? I am a senior associate at the levfin group of a commercial bank. We are currently shifting our focus from origination to portfolio management. Even for PE owned leveraged PF companies, the government has indicated financial support and relaxed insolvency requirements. Would you expect this to soften the effect on levfin vs. 2009? How do you think debt funds will navigate through the crisis? Would you regard this as a possible exit opp (after restructuring) in case I lose my job? I assume some of them have plenty of dry powder left and can join forces with well funded PE counterparts. Additionally they probably need support in portfolio management as they are more hands-on. I had a couple of head hunter inquiries in relation to debt funds over the last two weeks. However – given the dynamics over the last week, I am not sure if recruiting/vacancies changed in the meantime and to what extent my profile would be competitive as debt funds usually look for senior analysts/junior associates.

    1. Debt issuances and deals across the board will be down, so I can’t imagine how LevFin would survive 100% intact. Maybe if big companies stay operational (vs. small businesses, which are really feeling the effects), then LevFin won’t be hurt as badly, but I’m skeptical of that.

      Debt funds will probably just switch to portfolio management or distressed deals.

      Yes, Restructuring is a potential exit if you leave LevFin or are forced out.

      I think debt fund performance will vary wildly based on when the fund was most active. Some will survive, but any funds that raised and deployed a huge amount in the past few years may not (direct lending seemed to be in a bubble).

      But this entire situation is changing so quickly that advice seems to go out of date every 12 hours or so, so I don’t know. If head hunters have been contacting you, you should be competitive for these roles.

  23. Brian, what is your opinion about whether SA 2020 positions in public finance IB will go forward?

    1. I don’t think it’s much different than anything else in IB – deal activity is going to be down across the board, so it just depends on how many full-timers they think they’ll want to hire… and if it’s much smaller than the intern class, expect either canceled internships or very few return offers.

      Honestly, I hesitate to make predictions because this situation seems to change dramatically every few days.

  24. Hi Brian – great article. I have been told that my summer internship with an investment bank might get cancelled. Any tips of what we could do in the free time we have, due to the coronavirus, to improve our profile and put ourselves in a good position for the next recruiting season?

    1. Improve your technical skills, make sure you know Excel extremely well, then move onto VBA/Python/SQL and related languages, and keep working on useful analysis or side projects (depends completely on the field you’re going into). Reach out to everyone you networked with, say hi, and see how they’re doing in the current environment.

      Try to complete some online projects or freelancing work related to your field so you can show “work experience” even if your internship is canceled or delayed.

  25. Avatar
    John Smith

    What do you think will be the effect on the mergers & acquisition and accounting advisory market? Further, what do you think is the likelihood of September 2020 job offers in the field being rescinded?

    1. M&A activity will be down sharply except for distressed-related deals. Audits will continue because even distressed companies need regular audits for tax purposes. But advisory and transaction services and related groups will be down significantly because of lower deal volumes. I don’t think full-time offers will be rescinded at this stage, but if we’re in a global depression with 100 million people dead by September, sure, it could happen.

  26. Brian,
    I have a full-time offer for an SWE position in a major credit rating agency set to start in August.I know only fortune tellers answer these questions with “confidence”, but how likely is it that my offer will be rescinded?

    1. I think it’s unlikely that you’ll be affected because, if anything, credit rating agencies will see *more* activity as companies start going bankrupt, restructuring, etc., and need to get credit ratings on new issuances. Plus, you can do most of the work remotely. So, not a “sure thing,” but the probability of a rescinded offer is lower than it would be in IB/PE-type roles where non-distressed deal activity may dry up.

  27. Brian,

    Do you really think all the BBs are just going to completely cancel the internships for all the incoming IBD SAs?? Don’t banks need interns to fill the A1 class when the A2/3 classes leave?

    Or could they theoretically cut the entire class of 2020 SA?

    1. I think it is plausible that if the situation remains bad in 2-3 months, banks will cancel or delay internships. A delay might be more likely, especially if universities are still delayed and out of session by then. Banks don’t really like to “cancel” hiring for an entire year since deal flow is unpredictable.

      I’m not saying that you should be paranoid about a cancellation, but my point is that you shouldn’t take banks’ claims that “everything is fine” too seriously.

  28. what about fintech space?

    1. I could see crypto benefiting from the crisis as people get even more disgruntled with traditional banking. With areas like payments and lending, it’s tougher to say, but it’s probably a mixed bag (some benefits due to increased online activity, so more payments there, but sharply reduced offline activity means that people won’t need loans for home improvements, starting offline businesses, etc.).

  29. Hey Brian,
    Would you say that incoming summer analysts for restructuring groups have a better chance of not getting cancelled? Or would banks just simply hire people with IB experience to fill the gap?

    1. Yes, interns in Restructuring groups are safer. The issue with hiring people with full-time experience is that not that many people have Restructuring experience, and it’s not something you can just pick up from working on standard deals. And people working at distressed buy-side funds are not likely to return to IB just to take advantage of a wave of corporate restructuring.

  30. Offers at smaller banks are sometimes safer because the mega-deals that the big banks work on tend to dry up most quickly in a recession (in 2008, GS went down-market and started working on deals in the $100 – $200 million range). However, I still think all outstanding job offers are at some risk. If possible, I would wait until closer to the start date before resigning because anything could happen between now and then.

    If you absolutely need to give a full 2 weeks’ notice before quitting your current role, maybe at least wait until Monday because the current situation is changing so quickly that no one can predict the next day.

    Also, it depends a bit on where you’re currently working. If you’re already at a bank, there probably isn’t much harm in resigning, but if you’re in more of a “safe” job like a Fortune 500 company, then there’s more risk because those jobs are less likely to be cut.

  31. Thanks as always for the article Brian!

    Would be curious to hear your thoughts on what an incoming BB mba associate (tech coverage) should do or expect. I imagine being onboarded at some point, but wonder what preparing for the worst would look like and how to prepare.

    Im curious how one can pivot to restructuring groups under these conditions.


    1. If you already have a full-time offer set to start later this year, I wouldn’t worry too much at this stage. In the worst case, you could always find a corporate job somewhere else if deal activity is still nonexistent by then. But the large banks generally don’t like to rescind offers for entire new classes because it makes it more difficult to plan hiring in the next cycle.

      If you already networked for corporate finance/development-type jobs, maybe reach out to contacts from that effort with a quick update email and see how they’re doing.

      Most of the BB banks do not do much Restructuring, so if you want to go that route, you will have to think about the EBs and MM firms like Houlihan that have good groups. But everyone else is thinking about that same move right now, so there will be a lot of competition for those spots. Unless you already have Restructuring experience, it might just be easier to use the corporate roles as your Plan B.

  32. Hi Brian,

    Appreciated the article – I was surprised to see I had come up with many similar judgments as you and it certainly allayed some worries. I’m a summer 2021 graduate, so I’ve been networking for FT positions as I don’t really want to stay on with my current portfolio management internship after graduation. Would you recommend I continue cold-emailing at this time or wait until the volatility in the market cools down? I would also appreciate any general tips for my situation! Thanks.

    1. It is generally quite tough to move from portfolio management (or anything, really) into IB full-time without completing an IB internship and converting it into a full-time offer. But it also depends on what you’re doing, or what you were planning to do this coming summer – if it’s something deal-related, you might still be able to network/interview for IB roles… if hiring picks up by the summer.

      If you’re not doing anything deal-related, you could continue with your current internship and do a ton of last-minute networking with smaller banks to get in (see: But that requires higher deal activity / less volatile markets.

      If you’re not doing anything deal-related and markets are still bad, then maybe stick with portfolio management right now and try for a lateral move once you start working full-time.

  33. How safe are consulting or tech company internships right now? Have seen most consulting projects being pushed to remote, would they be hesitant to bring on interns also?

    In regards to tech have heard a couple of SF tech cos cancelling their internship programs / freezing hiring already, particularly given the worse conditions in that area. Thanks!

    1. I would say consulting is about the same as IB, lots of remote work now and probably some hesitation to bring on interns.

      Tech is probably at higher risk – at least startups and mid-sized companies – because VC funding has dried up, most of these companies are bleeding cash, and after the WeWork / Uber / Lyft debacles, many investors there are being cautious.

      FAANG is probably a different story because they’re profitable and not dependent on outside funding (OK, Amazon is borderline I guess, but still not dependent on VC funding).

      1. Is it a good time to reach out to bankers to get your name in the hat for when lateral hiring does pick up?

        1. Yes, it’s a good time to reach out to contacts in general and see how everyone is doing with the crisis.

    2. Hi, Nelson – Can you tell me which SF tech cos have canceled their internship programs or freezing hiring due to the current or expected conditions?

  34. Hi Brian,

    I would say your article is quite bold yet reasonable. I study in the West but will (ideally) work in Asia (Hong Kong, Singapore). From what I have seen, at least regarding internships and graduate jobs, it seems like there’s quite a difference between how incoming interns and analysts react on different continents.

    Late January & whole February when this thing started to get on stage and escalate, everyone in Asia was in an extreme panic and emailed HR asking if everything was still OK, while my mates in UK/US/AU worried about nil (maybe not for my AU mates due to the bushfire). And now this virus looks like relatively contained in my region, off-cycle internship recruitment regains some momentum, and few still worry about their summer, but my Western friends finally began to agonize over their job (since <2 weeks ago).

    Well, I do sincerely and earnestly hope that this virus can be annihilated real soon, but I would guess that maybe summer and graduate jobs are comparatively less impacted in East Asia. Even saw two MFs post their off-cycle internships online amid the outbreak, which was extremely wired…

    1. You may be right – but I still think there’s a chance of a second wave of infections in APAC. That’s what usually happens with viral outbreaks. So it may be a while before everything is “contained.” I don’t think the entire world can be quarantined forever, though, so I imagine that people will have to accept frequent testing whenever they travel, enter buildings, etc.

  35. Hi, I have been with my firm (boutique) for just over 2 years now. Shortly before the 1 year anniversary I got a pay raise. At the 2 year anniversary nothing happened and there was no annual performance review or feedback or anything. A few months ago some people in a different team were let go as our firm fee earnings decreased – however I still got a full bonus at the same time. I planned to ask for my annual raise proactively, but now obviously there’s the Corona situation as well. Do you think it’s still a good idea for me to ask for a raise? Or would you recommend waiting until the whole “coronavirus and no (lateral) hiring” situation blows over?

    1. I would not ask about a pay increase right now – better to wait and see if things improve in a few months. You’ve already survived one round of layoffs, so there’s no reason to push your luck.

  36. How safe are trading firms and trading internships for summer 2020 and beyond?

    I’ve had a final round interview (equities shop) postponed twice now, due to market volatility. Usually, volatility seems good for traders, but I’m much less confident now.

    1. Could go either way because it depends heavily on the firm’s strategy. But if I had to bet, I would say you’re at less risk than IB interns because market volatility and crises can actually benefit traders. If volatility stays this high until then, though, they might be reluctant to train you in this environment.

      1. Brian, what about sales and trading internships at BB and MM banks for this summer?

        1. Still probably less at risk than IB because even if deals dry up, institutional clients will still be trading and need market-making activities to support that. But who knows, if they actually close the financial markets anything could happen…

  37. Hi Brian – what is your view on private equity funds? Specifically royalty funds? Do you think they will be able to hold up better than let’s say hedge funds/long-only funds? THanks.

    1. I don’t know much about royalty funds, but I think it depends on the underlying asset. Biopharma or music/IP royalty funds? Sure. Energy? Not so much since oil prices are crashing and energy demand is falling.

      As far as private equity funds in general, it really depends on when they made most of their investments, what the holding period is, and how much dry powder they have. I expect some funds to fail or be forced to shut down, but those who were less active the past few years will be fine.

      Hedge funds without long lockup periods are always at more risk in downturns…

  38. Thanks for this very timely article! I signed a summer internship offer in London but having seen what the British government is doing, I am now preparing for the worst. Do you think I can still put my summer internship on my CV and described it as unable to attend due to the coronavirus for the full time recruitment? Thank you!

    1. Yes, I think you can and should still list the internship on your resume/CV to indicate that you won it but could not complete it due to the virus.

  39. What is your expected reduction in the conversation rate for 2020 SA? Reduce by 50%? Fo you think APAC will have a higher conversion rate since it is recovering, meaning deal flow is likely to pick up before Summer starts? Thanks.

    1. If things stay bad or get worse between now and August, yes, a 50% reduction is likely. If things improve, maybe only a 20-30% reduction. APAC may do slightly better, but I wouldn’t be so sure – “second waves” often happen with pandemics. I think the biggest issue now is making testing more widely available because a total quarantine indefinitely is not a viable solution. Even the heavily indebted U.S. government will not keep funding bailouts indefinitely.

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