Well, I'll have to put aside my discussions on investment briefly, as there has been an interesting development at the bank.
By good fortune, one of the junior team members has just decided to quit. The reason is being kept secret for now, but he was a veritable Lothario despite ears that stick out like dinner plates, and there are rumours he has been sleeping with the personal assistant of a particularly senior MD in synthetics. If that got found out then it was never going to go down well - particularly if the MD was also getting some on the side.
What was more interesting however is how this fits into the impending job cuts here - our Boss announced his departure rather cryptically this morning; that is was his own decision (yeah, right), and mentioning his leaving date was still to be confirmed "pending some negotiations".
From talking to the chap in question who is leaving, this is all about when he can hand over his work, which sounds reasonable enough on the surface. However our Boss is a sly old fox, and is more likely to be delaying the whole process so that our boy counts nicely in the round of cut backs next month. A splendid idea, and at the same time the Boss can avoid making any of those nasty decisions that reduce team morale.
Otherwise I have a couple of sources dotted around in the Bank, one of whom works for global security. They are very useful to know, because as a group they need to be informed in advance when we're about to fire people so they can be ready for the odd disgruntled former banker who might come storming back into the office to vent their views on life, the universe and anti-Capitalism. Global Security's usual tactics these days has therefore been to simply lock the doors on the day of the cull - unfortunately we all know that game now so it is also taken as a sign that something is afoot.
Apart from confirming my suspicions that a cull is on its way "within a month", he also confessed his team had even gone to the length of locking the office doors periodically on other days recently, to try and make it seem more of a usual event! It sounds like they haven't got enough to do if they're wasting time with antics like that, and a few of them should join the exit queue.
Otherwise my highlight news of the day was waking up to find that the new, incoming President, Barack Obama, is taking the time to make sure we bankers are lined up as the sole fall guys for the global economic crisis. In an age of irresponsibility, there is no doubt that the City and Wall Street ought to be hung out to dry. But so too should the governments that steadily reduced the regulatory framework for years to the point where all this was possible. To use a zoological comparison, if the government is an animal keeper and the City a tiger, it's like putting the tiger in an enclosure next to some lambs, with only a low, wooden fence between them. And then blaming the tiger the next day when you get in to find a blood bath (but a fat, happy cat).
And while we're on the subject of personal responsibility, let's have a moment to think of Average Man On The Street and his stupidity in spending far beyond his means for years by borrowing against the value of his house.
In reality, Barack's barracking is a response to 'Bonusgate' - the scandal currently engulfing Bank of America / Merrill Lynch, in which former Merrills CEO John Thain opted to pay his people a fat bonus before the inevitable bad times engulfed the firm. Thain's head rolled quickly enough this month, although BoA made a poor job of trying to stitch him up by pretending they had no knowledge or influence over the decision.
In reality that is a load of rubbish, as Thain made clear in public interviews that could not be convincingly denied by Bank of America. As such we ought to see Ken Lewis (CEO of BoA) on his way soon as well. It's entirely fair given the amount of public money being used to keep the combined bank afloat, and is probably the first signs that the compensation culture of global banking is changing forever.
Meantime for a man who spent his campaign talking about rising above finger-pointing and blame, and focusing on resolving the problems, the President seems to still have had a spare moment to give a mid-digit to Wall Street for all the problems they are going to cause him for the next couple of years. Fair enough.
Showing posts with label Bank of America. Show all posts
Showing posts with label Bank of America. Show all posts
Friday, January 30, 2009
Tuesday, January 27, 2009
"Oh My God, They Killed Kenny!"
As I mentioned in my first post, it amazes me how little financial common sense many people have - in particular my colleagues. After all, these are the supposed 'Masters of the Universe' (where exactly did that ridiculous phrase come from?), who are experts in the many financial products and options for investing our money. Yet it's amazing how many are really just Average Man On The Street when it comes to making those all-important decisions that determine whether you end up with some freedom in life.
On that note, let me be clear that I see money as nothing more than an enabler in life - specifically it gives you personal freedom to decide what you want to do and when. That's why the ultra rich who wander around the shops in Knightsbridge and New Bond Street look so happy and relaxed. You can spot them a mile off, with their designer everything, styled hair, moisturised skin, and most importantly no bags under their eyes from the constant strain of life in the rat race in which we all struggle. Instead they do as they please - it's when they show all the gratitude of Paris Hilton for their position in life that the resentment rightly comes in from the rest of us.
Unlike a lot of people, I have no like or dislike of money. I think those who do are usually scared by it, because it is either a constant problem to meet bills, or they don't know what to do with what they've got. But like all fears, it's facing up to it that helps, not sticking your head in the sand and pretending it isn't important. Money ultimately will decide whether I own that house in a good area in a couple of years time, and whether I can provide for the family that L and I plan to start one day. That's a quick insight into my reasoning, along with why I have no interest in pissing my money away on ego boosts like a flash car, phone or watch.
We all know the type who do that, like a friend of mine, Big H. He's enormously proud of his house, along with his flash company car and likes to be conspicuous with his wealth by showing off various electronic gadgets like his smart phone. In short, he's the kind of overstretched financial idiot of the worst kind: shallow, materialistic, he seems to actually define himself by what he buys. He also thinks he has been clever by racking up £9000 of credit card debt, which he has been flipping every 6mths between company intro deals.
A number of financial websites have advised people to do that in recent years, but as the country is about to find out - it is always a stupid idea to encourage spending beyond your means. Now those deals are drying up fast, so Big H finds himself with an uncertain future regarding his job, and no means to pay that back easily. Anyway back to my colleagues at the bank, as I heard an interesting story on Friday about an investment decision made by one who was an unfortunate lamb to the slaughter in the first big cull back in October.
Kenny's just one of those unfortunate types who was always one of the team comedy characters. We laughed AT him as much as with him, and he hasn't had the best run of luck in recent months. As you'll see though: calling most of it 'luck' is partly to excuse stupidity. Firstly he decided to take a holiday in the summer to Sardinia of all places, and despite the warnings from a colleague who knew the place well to not drive there, he hired a car - and promptly crashed it within 2hrs of arriving, and spent the remainder of his two week holiday in hospital recovering.
Kenny's a good chap, and was well liked around the bank to my knowledge. Unfortunately he was also not politically astute enough to ensure he massaged the ego of the most important person - the Boss. He made the mistake of complaining a little too vehemently about his bonus in December 2007 (that's the last time we expected bonuses). That seems to have been remembered, as he was first on the list our of the door. There's complaining by grumbling and looking like you expected more, and then complaining by making it personal or with veiled threats - and I heard he crossed that line.
Around that time was when all the fun with the banks was really kicking off of course: Lehman Brothers collapsed, and the vice tightening on Goldman Sachs and Morgan Stanley. Overshadowed but still high profile was Iceland, which quickly defaulted on all foreign debts, forcing the UK government to bail out UK savers. Guess who had over £100k stashed away in an Icesave account?
Although Kenny will eventually get that back, meantime he decided to 'invest' his generous redundancy package in a couple of other banks in December - namely RBS and Lloyds TSB. I can only assume his logic was that given they had fallen a lot up to now, it therefore meant now was the time to buy. I should probably point out that Kenny is no trader, but such simplistic reasoning also showed spectacular naivety to assume that more crap was not lurking under the surface at both of those banks. Particularly given that each has swallowed up a terribly run, overexposed competitor in ABN Amro and HBoS respectively. You only have to look at how Bank of America is now suffering from its forced purchase of Merrill Lynch for another example.
Everybody in the City knew both were as contaminated as Lehman Brothers.. or should I say anybody who spent some time doing some research into the matter, which is another key rule of investing.
Since Kenny decided to put in an unspecified amount into those banks, they have tanked an impressive 79% in value, which just goes to prove my point that you should never assume bankers are always competent with their money. Having said that, after the last 6 months I am likely preaching to the converted when it comes to assuming we're all incompetent, overpaid slime.
I must admit, a few of us at the bank couldn't help but laugh when we heard - it was just such a Kenny way to invest. In a post soon, I'll tell you what I have been doing with my own money in the last 6 months, and why I have been making a lot of money out of the downturn.
On that note, let me be clear that I see money as nothing more than an enabler in life - specifically it gives you personal freedom to decide what you want to do and when. That's why the ultra rich who wander around the shops in Knightsbridge and New Bond Street look so happy and relaxed. You can spot them a mile off, with their designer everything, styled hair, moisturised skin, and most importantly no bags under their eyes from the constant strain of life in the rat race in which we all struggle. Instead they do as they please - it's when they show all the gratitude of Paris Hilton for their position in life that the resentment rightly comes in from the rest of us.
Unlike a lot of people, I have no like or dislike of money. I think those who do are usually scared by it, because it is either a constant problem to meet bills, or they don't know what to do with what they've got. But like all fears, it's facing up to it that helps, not sticking your head in the sand and pretending it isn't important. Money ultimately will decide whether I own that house in a good area in a couple of years time, and whether I can provide for the family that L and I plan to start one day. That's a quick insight into my reasoning, along with why I have no interest in pissing my money away on ego boosts like a flash car, phone or watch.
We all know the type who do that, like a friend of mine, Big H. He's enormously proud of his house, along with his flash company car and likes to be conspicuous with his wealth by showing off various electronic gadgets like his smart phone. In short, he's the kind of overstretched financial idiot of the worst kind: shallow, materialistic, he seems to actually define himself by what he buys. He also thinks he has been clever by racking up £9000 of credit card debt, which he has been flipping every 6mths between company intro deals.
A number of financial websites have advised people to do that in recent years, but as the country is about to find out - it is always a stupid idea to encourage spending beyond your means. Now those deals are drying up fast, so Big H finds himself with an uncertain future regarding his job, and no means to pay that back easily. Anyway back to my colleagues at the bank, as I heard an interesting story on Friday about an investment decision made by one who was an unfortunate lamb to the slaughter in the first big cull back in October.
Kenny's just one of those unfortunate types who was always one of the team comedy characters. We laughed AT him as much as with him, and he hasn't had the best run of luck in recent months. As you'll see though: calling most of it 'luck' is partly to excuse stupidity. Firstly he decided to take a holiday in the summer to Sardinia of all places, and despite the warnings from a colleague who knew the place well to not drive there, he hired a car - and promptly crashed it within 2hrs of arriving, and spent the remainder of his two week holiday in hospital recovering.
Kenny's a good chap, and was well liked around the bank to my knowledge. Unfortunately he was also not politically astute enough to ensure he massaged the ego of the most important person - the Boss. He made the mistake of complaining a little too vehemently about his bonus in December 2007 (that's the last time we expected bonuses). That seems to have been remembered, as he was first on the list our of the door. There's complaining by grumbling and looking like you expected more, and then complaining by making it personal or with veiled threats - and I heard he crossed that line.
Around that time was when all the fun with the banks was really kicking off of course: Lehman Brothers collapsed, and the vice tightening on Goldman Sachs and Morgan Stanley. Overshadowed but still high profile was Iceland, which quickly defaulted on all foreign debts, forcing the UK government to bail out UK savers. Guess who had over £100k stashed away in an Icesave account?
Although Kenny will eventually get that back, meantime he decided to 'invest' his generous redundancy package in a couple of other banks in December - namely RBS and Lloyds TSB. I can only assume his logic was that given they had fallen a lot up to now, it therefore meant now was the time to buy. I should probably point out that Kenny is no trader, but such simplistic reasoning also showed spectacular naivety to assume that more crap was not lurking under the surface at both of those banks. Particularly given that each has swallowed up a terribly run, overexposed competitor in ABN Amro and HBoS respectively. You only have to look at how Bank of America is now suffering from its forced purchase of Merrill Lynch for another example.
Everybody in the City knew both were as contaminated as Lehman Brothers.. or should I say anybody who spent some time doing some research into the matter, which is another key rule of investing.
Since Kenny decided to put in an unspecified amount into those banks, they have tanked an impressive 79% in value, which just goes to prove my point that you should never assume bankers are always competent with their money. Having said that, after the last 6 months I am likely preaching to the converted when it comes to assuming we're all incompetent, overpaid slime.
I must admit, a few of us at the bank couldn't help but laugh when we heard - it was just such a Kenny way to invest. In a post soon, I'll tell you what I have been doing with my own money in the last 6 months, and why I have been making a lot of money out of the downturn.
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