Managing Micromanagers

A fund manager here at the bank, Felix, is currently experiencing what can only be described as a slow death by micromanagement at present. The poor chap is about 10yrs older than myself, quietly spoken, and as amiable a chap as you can find amongst the ego's and bullshit of the Front Office. As such, he is eminently experienced and more than good enough to complete his job without interference or additional supervision.

All that changed about two months ago, when one of the two MD's over in emerging markets was unexpectedly let go: part of one of a number of 'mini-culls' that all of the banks have been carrying out to avoid headlines while they quietly reduce numbers. That had a profound effect on his close friend and colleague, a purple-faced Frenchman who quickly clocked that his own number could soon be up.

Therefore he has spent the time since actively calling up 'Free leeks', as he calls him, and attempting to create himself a new role from what little business is left in the area. This has taken the form of him poking his not-insubstantial nose into every area of the business for a sniff. Should anybody talk to him now, he has become a sommelier of triviality, spouting opinions on everything but with little substance.

In short, his input has been the very worst kind of management, which drives any halfway competent professional insane with frustration. Felix has confided in me several times that he is close to snapping and is toying with a move elsewhere, such is the stress he is finding all this.

For poor Felix, he has had to endure Le Sommelier infrequently attending calls and meetings, and hijacking them by asking lots of questions that waste time going over old ground. Le Sommelier has combined that with tasking him with plenty of pointless status updates, insisting on reviewing everything and then responding back requesting irrelevant changes to current procedures - all along with delegating anything he ought to be doing himself back to Felix. In short, he is treating a man in his 40's like an intern, and Felix finds himself with a new level of middle management that offers nothing.

I can't blame Le Sommelier for his desperation in avoiding losing his job. However one would hope he would be proactively looking around for additional work in the bank as well; instead he prefers to do as little as possible while cultivating the illusion to those above that he is now vitally overseeing important work. I suppose this is how large business functions everyday, but having seen it in microcosm it has brought home just what an appalling waste of time it is.

On another note, GGP announced their earnings last night, which are reasonable but below analyst expectations - how positive or negative depends on whether you read Reuters or the Wall Street Journal it seems. Looking at the market at present, we seem to be well into a second wave of panic after the temporary optimism that followed the falls from September to November. This will gradually wear off as government initiatives gain some semblence of confidence from investors, and we will likely see a month of rises and calm coming soon.. before another round of selling off, panic and negativity.

The key issue I am looking to see resolved is the unlocking of frozen credit markets. Right now, the Commercial Real Estate sector in the US for example, has approximately $200bn in loans to roll over in 2009/10. That is a staggering figure, and means this issue of refinancing is not just GGP's but an industry wide problem to be tackled. GGP are under most pressure because they are the most stretched, but the fact we are now as much as a month into technical default of loans without a single lender pushing them to file Chapter 11 says a lot about the appetite banks have for pushing them under.

A combination of fear, risk and uncertainty continue to depress GGP's share price so severely. When that ends is anybody's guess, but the March 16 deadline for various extended loans seems a reasonable focus point for now.