Trader Territory Marking

As expected, the motion filed by Hugo Boss for a relief from the automatic stay (see previous entry for link to the motion) was roundly rejected by Judge Gropper last week. Otherwise this story is doing the rounds today, and illustrates how the 'sword' of Chapter 11 can be used as a threat:

"[GGP] said it was considering ways to treat some of its subsidiaries as a single debtor and override their status as separate companies."

This is actually going over old ground, although it would be useful to clarify there is an apparent difference in how substantive consolidation is being used. The major concerns of the credit industry lie in CMBS being substantively consolidated into wider loans such that the agreed collateral is no longer secure - this been addressed in court submissions and will be protected by the replacement lien and order for GGP to provide 'adequate protection'.

There is however a desire and incentive by GGP to consolidate lender negotiations where possible through the Chapter 11 process to assist in restructuring - the two are not necessarily incompatible, although GGP is clearly using this as a threat.

A sign of the changing tide perhaps - our first new trader since 2008 joined the Desk on Monday morning. Somehow we coped after Junior Trader's departure earlier in the year - we lost a character, but not a revenue generator. However increasing volumes and opportunities are encouraging the bank to pick up some people again.

I always enjoy watching new traders when they join a Desk.. the verbal rutting with the old hands an be highly entertaining as they attempt to establish their place in the team. In fact, for those who don't work for banks, just pop on Animal Planet when you get home tonight and you'll get the idea - replace the hogs and territorial scent marking with traders crude humour.

He might have turned into a pious, hypocritical waste of time now, but back in 2007 the columnist Cityboy gave this old example of trade floor dynamics, which plays out in various forms every week:

"Why are you such a fat bastard?" said the posh salesman to the barrow-boy trader, who admittedly did look like he'd been on the notoriously unsuccessful 'all pie diet'.

The recipient of this rather innocuous insult slowly swung around in his seat and with perfect comic timing delivered the oft-used but still classic response: "Because every time I shag your wife she gives me a biscuit".

It is how well a new arrival can handle themselves and fit in with the Desk dynamics that plays a major role in their success at a bank. Obviously though, that only goes so far. Exceptional sales contacts, or an innate talent to manage large portfolios and hence bring in huge amounts of cash make those further up happy and that is what counts most of all.

I've seen some real arses turn up over the years though, and not all have been the 19 year old Essex boy sterotypes - although on that subject, many of them are a particularly special blend of twat. With a stated aim of doing their trading exams straight out of school, these kids are often very average – not even skilled numerically - but to their credit they don't waste their time or money following a route of higher education – and with hindsight I don’t blame them.

I recall an Irish guy who arrived at a former bank I worked for, and made the mistake of continually boasting about senior roles at Morgan Stanley and Goldman Sachs previously. He also made the mistake of looking down on the rest of us and making sure everybody knew it – I think in a misguided attempt to establish himself as the alpha trader.

Unfortunately that sort of attitude doesn't endear, and within a week the team had dug the dirt on him via ex-colleagues, and confirmed his overstated role and habit for bullshit. On his first day off, the team took some time out in the morning to ceremoniously unveil a sign above his monitor reading 'Little Fella' for him to find upon his return. A reflection of his small stature in more ways than just his height.

Interestingly that was a name which stuck for the remainder of his time there..

Anyway so far our new boy seems fairly quiet - listening and learning about the non-standard systems and what portfolio's he's inheriting. Let's see whether he starts pissing off anybody over the next month or two as he comes out of his shell.