"The Pulse" --#33

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Recruiting Timeline:

Banking:

Where We’re At:  

• SA 2025: 9 new banks opened up applications this week including: Morgan Stanley, Lazard, Perella Weinberg, Qatalyst Partners, Baird, and a few others! So far ~28 banks have opened applications

• We have exclusive data on the planned release of multiple other firms contained within our Premium Database

Newly Released Applications:

• Morgan Stanley: Strong BB; great M&A team (SA 2025)

• Lazard: Strong French boutique; sweaty (SA 2025)

• Perella Weinberg: Solid boutique (SA 2025)

• Baird: Regional boutique, Midwest presence (SA 2025)

See below to gain access to our premium database, updated weekly, which houses the application processes for over 200+ banks/consulting/buyside firms! Gain an edge over everyone else by not having to spend countless hours tracking applications and deadlines.

Consulting:

Where We’re At:

• SA 2025: As we've mentioned, this process will and has started earlier than it did last year. Three firms have released applications including the Women's program for PWC. Their main application will be released in the next few weeks and other Big 4 firms will likely follow. As for MBB, we anticipate apps to open in the early spring. 

• FT 2024: Cohorts have been filled and this process is over. Only small firms have applications open.

SA 2025 released apps:

• PWC: Management Consulting Intern - Women's Consulting Experience (SA 2025).

• Curtis & Co: Boutique firm (SA 2025)

• Protiviti: Tech Consulting (SA 2025)

FT Released Apps:

• KCIC: Boutique firm (FT)

• Lake Partners Strategy Consultants: Boutique firm (FT)

• FTI Consulting: Tech Consulting (FT)

Pre Consulting:

• Bain: Consulting Kickstart Program (Interactive, virtual series designed to give freshman/first year undergraduate students who identify as Black, Hispanic/Latin American, and/or Indigenous heritage, exposure to business leaders and the exciting world of consulting.)

Apply ASAP if you’re interested!

Buyside:

Where We’re At:

SA 2025: 6 new buyside shops opened up apps this week. Notable names include Blackstone, Neuberger Berman, and K1 Investment Management. February has been designated as the big month for interviews, so get those apps in!

Released apps:

• Blackstone: Over $1tn in AUM (SA 2025)

• Neuberger Berman: Solid shop with a fixed-income focus (SA 2025)

• K1 Investment Management: Smaller PE fund, software focus (Summer 2025)

Premium Database:

The database is updated weekly and contains 200+ Investment Banking and Consulting internships/full-time positions along with:

• Interview tips for specific companies

• Interview prep material

• Applications and deadlines linked so that you can apply with one click

• Insider information about the application process

• Professionals to network with

• Buyside deadlines, interview prep, and people to network with for the sweatiest of students

We send the updated dataset every week with the latest banking and consulting job postings. We released our 33rd update today.

Students we have been helping have already landed roles at Blackstone, Goldman, J.P. Morgan, Jefferies, Citi, and Solomon.

To get access to the database and the weekly updates, you pay a one-time fee of $50 (Venmo @Hooshelpers) that grants you annual access to the updated database (You can enable purchase protection if concerned). If you don’t find our services helpful, we simply ask for feedback on an area we can improve upon and will refund your $50.

This is a small investment for a huge payout when you secure your dream offer!

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Market Update:

Tax Savings vs. Stimulus

Considering 2024 is an election year, do tax savings or stimulus better support the growth of the economy? Republicans tend to opt for tax savings and Democrats tend to opt for stimulus as different levers to spur economic growth.

Either way, there is no clear cut answer as to which lever better supports GDP.

First, some quick economic stats:

• CPI rose 3.4% YoY (0.3% QoQ)

• 216,000 jobs added in December (unemployment rate at 3.7%)

• U.S. debt stands at $34tn (yes, trillion!)

Ok, back to today’s discussion.

Taxes are a form of revenue for the government and are necessary to keep all government employees paid. From time to time, the government will fuck around with the tax rate to fulfill different objectives such as incentivizing certain industries to establish their home base in the U.S. or building a cash pile to pay off some of the heinous debt balance.

On that note, there are many different types of tax (personal income tax, consumption tax, corporate tax, etc) and they are often all manipulated in different ways at different times. There is rarely a uniform tax cut or increase across all different types of taxes. See below for a demonstration of how much the corporate tax rate has fluctuated over the last 50 years:

The bottom line is that the government often cuts taxes when the economy needs a boost. By cutting taxes, the government hopes corporations and individuals will spend more which ultimately grows the GDP.

Downsides of Tax Cuts:

• Less revenue for the government

• WACC increases which can disincentivize investment

• Effects are demographically skewed (people with lower incomes spend more, but people of greater incomes use the cuts to save more)

Benefits of Tax Cuts:

• Stronger cash flows for businesses and people

• Doesn’t force the government to directly add to the debt balance

• Effects are immediately felt

Due to the complexity and multitude of different taxes, there is no direct evidence explaining the effects of tax cuts on GDP growth (especially difficult to break out this data given tax cuts and stimulus are typically deployed in a bundled package).

Moving on to government stimulus.

Once again, to fulfill different initiatives such as encouraging the construction of infrastructure or corporations to retain headcount, the government may take on more debt to directly provide cash to the economy.

Similar to taxes, government stimulus is widely manipulated across different buckets with the central goal of boosting GDP by encouraging people and corporations to spend more. Back during Covid, people were just milking the government for cash and collected checks for doing absolutely nothing as a part of a government stimulus package to avoid an economic depression. However, what did the people do with this extra cash?

Plenty of people went out to the market and blew the free money on stupid shit like Gucci bags and Loui-V (see "The Pulse" --#20 for detail about the evolution of discretionary spending).

However, a TON of this money was sent to savings accounts with the personal savings rate jumping to 9.4% as of August 2021 and falling to only 3.4% by August 2023. Savings are not directly accounted for in GDP.

Downside of Stimulus:

• More debt for the government

• Does not immediately impact economic activity (plans typically rolled out over time)

• Not directly revenue generating for the government

Benefits of Stimulus:

• Direct cash in pocket

• Different accounting treatment (separate of core business/personal activities)

• More temporary by nature

Overall, tax savings and stimulus are different tools the government can use to try to spur economic growth through encouragement of additional spending. However, outside of the technicalities discussed, there are major behavioral nuances in the individual treatment of these different incentives. In banking, there is a common phrase “spend your salary, save your bonus” yet some people do the opposite and immediately use their bonuses to buy things like watches. The government cannot anticipate how these different people will treat tax savings or stimulus which makes it nearly impossible to determine which plan is more effective at growing the GDP. Plus, a mixture of these tax cuts and stimulus are often used simultaneously which further clouds the data.

So, this question is unlikely to be solved and partially explains why the U.S. flops between electing Democrats vs. Republicans every 4 years.

For an interview, understand what levers are likely to be pulled depending on which party is elected.

Disclosure: Nothing written here is financial advice or should be used for investment decisions.

Free Cash Flow

At the end of the day, all anyone cares about is how much money a company makes. (Our apologies since we said we would cover this in "The Pulse" --#26)

Basic FCF Calculation (available to all stakeholders):

1. EBIT * (1-tax rate)

2. + D&A

3. -changes in Net Operating Working Capital

4. -capex

Why do we take tax-affected EBIT? This measure essentially provides us with normalized income that a business generates from its core activities.

Why do we add back D&A? Depreciation and amortization are core, non-cash expenses. So, they need to be added back since D&A expense is not a true cash deduction.

Why do we subtract the change in net operating working capital? This is probably the most complicated piece of the formula to understand. But essentially we want to subtract any cash that needs to be tied up in the business to maintain core operations (maintenance cash). The subtraction of the change allows us to account for any cash inflow or outflow that may occur from the fluctuation in amount of maintenance cash needed to run the business from period to period.

We do we subtract capex? Capital expenditures are deducted since these are direct cash outflows of the business and considered to be a part of core business activities. (Some capex-lite businesses may exclude this from the calculation as capex may be deemed as non-core).

Do you see the pattern here? We are calculating free cash flow to determine the profitability from a business’s core activities. It is impossible to determine all of the non-core bullshit that can impact a company’s profitability over time (such as litigation expenses), so all we can do is adjust line items to remove all non-core activity. This allows us to forecast (as discussed in "The Pulse" --#27).

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“The Pulse” #33