Well I just got back from an amusing trip out to Zurich, where I gave a presentation to senior management in Private Wealth Management. I did a fine job of summoning faux enthusiasm as I ran through an unnecessarily lengthy presentation, explained how our absurd insolvency scheme could benefit them as well:
"And so, this scheme will enable you to provide your clients with full assurances that they will receive their money back, in the event of an insolvency at some point in the future," I pronounced confidently as I finished.
The PWM managers all looked keen, and agreed they would provide funding to have them added to my insolvency circus project, much to the delight of my Boss when I got back today. More funding equals more work for us - and a higher profile for him as he struggles to try and make MD.
As I packed up in the empty board room afterwards, a manager I used to work with came back in for a chat. He explained that the reason for this sudden interest from PWM is down to the exodus of clients in the last few months. As such, half of the room will be fearing for their own necks when this gets out, and have been looking desperately for anything that might give them an edge when trying to pick up more clients.
When I enquired why they had lost so many, he confessed that PWM have been so busy lying to them about portfolio performance for the last year, that when the bad news had to be finally reported at the year-end, it was the final straw for many.
"Look, the first casualty of a recession is honesty", he said seriously. "My problem with all this is that clients don't believe a word we tell them anymore, so I'm not sure this insolvency protection malarky is going to make any difference."
However bad I think my lot are, it was rather refreshing to get out to the most boring place to work in Europe and find out there is another group of bankers with even fewer morals.
Showing posts with label job cuts. Show all posts
Showing posts with label job cuts. Show all posts
Tuesday, May 19, 2009
Friday, April 10, 2009
The Price of Advice
With the long Easter weekend now upon us, I am going to use this as an opportunity to plug on with the business plan. Otherwise though, a quick observation on life at the bank, which has become amazingly boring since I got back from Egypt last month. It almost feels like the quiet after a hurricane has passed over.. we rats are only poking our noses out of the hiding holes we have been in for essential activity.
The good news is that, as of last week, all of those I know who have been fired from my bank have now all landed new jobs. It's a great sign that they have been able to cash in on the ill-justified prestige associated with this place, and secure decent roles even in these tough times. By chance I had a quick coffee with another headhunter myself mid-week - as I say to all of them, while I am not actively looking, I am always "open to opportunities".
In this case, he spent half an hour ignoring me and pitching a near-identical role to me over at one of the other banks down in Canary Wharf. I have no desire to increase my commute from West London by another half an hour or more a day, I remember from living down there that Docklands is a gigantic, soulless wind tunnel without any of the charm or benefits of the City.
I explained to him several times that I have no interest in taking the risk of a move to do the same role somewhere else. As and when I move next (and this is all based on the assumption my web business has not fully taken off by then), I want to use it to make a move into a related but different area.
A good example was one of the guys on the desk who left last year to join a Venture Capitalist firm - no, not junior trader - he's ended up at that crappy little French bank Calyon, so that hedge fund claim was all bullshit. Sadly it also means my 10mth punt in the office sweepstake didn't come up.
In one sense I dislike VC's and their predatory, short-termist nature (all they are really interested in is taking a firm to the market as quickly as possible to realise quick returns). However the entrepreneurial aspects are hugely appealing to me, and his move has made me realise that I do not have to continue with a role that I can do with my eyes closed, and can look to make a move across into something new and fresh going forwards.
Of course, who knows with these times what is or is not possible. I am a great believer in persistence when told no. You need to have vision and see opportunities rather than closed doors. No direct experience in the area? So what? I had none in my current role here at the bank when I joined - instead blagging through the countless interviews through a combination of being personable, articulate, some juicy white lies and by not being clueless. If it worked here, it can work anywhere.
On an unrelated topic, I am going to get up on my soapbox about the quality and impartiality of research reports. I have access to so many as you would expect, and and am constantly amazed by how insubstantial the actual research often is. Whenever I go up to research, those fucking clowns are usually surfing the web - their technique is to cut and paste observations of others before rewording, and otherwise calling up investor relations to get the latest key financial figures to add to their reports.
The end result looks great, when shoed into a professional research report template. If ever you needed proof that presentation goes a long way, analyst reports by the banks are it. The actual content is usually woefully inadequate - weeks behind, or offers little if any meaningful insight and usually regurgitates old news or views.
They almost always go with the mainstream consensus, or safe view as well, rather than even discussing different strategies depending on investor risk tolerance. A good example is GGP, which naturally is one I know a lot about. Reports out now do not even consider many of the issues I have discussed on here in their recommendation - just a sweeping generalisation of the REIT market prospects in 2009.
Friday, March 20, 2009
Inspirational Example
Our holiday has been most pleasant, as is knowing I have another 5 days to go. I've been quickly logging into work occasionally to keep my inbox from overflowing - and to remind myself how much better life is away from the place.
The best part of the holiday was surprisingly spending some time flying elsewhere to meet up with L's cousin, who is currently managing a 2yr old baby girl with two 5mth old twins. It was a fantastic lesson in the benefits of birth control, and has convinced me there is no rush just yet to sign away my life. Just to illustrate the point, now that we are back in Sharm, I stayed in bed until 10am this morning.
What was most interesting and enjoyable for me however, was the chance to meet with the husband of L's cousin on the evening we stayed. Peter is actually an American from the south, so has a fantastic drawl in his accent, and as I was forewarned, was a 'serial entrepreneur' (a phrase he actually derided as ridiculous as in his opinion if you are an entrepreneur you will continuously set up businesses - he's right of course). In his case, he has set up all manner of businesses in the past, from a restaurant, real estate and haulier businesses, to his current bio-tech company, which is involved in stem cell research.
What was most heartening is that when talking to Peter was that I felt like a kindred spirit - we agreed on absolutely everything, and it made me realise how close my mindset is to that of an entrepreneur. I even outlined at a high level my business idea, which he thinks has a lot of potential - and I think he is the kind of person who would have picked holes and been honest rather than tip-toed around.
The best part of the holiday was surprisingly spending some time flying elsewhere to meet up with L's cousin, who is currently managing a 2yr old baby girl with two 5mth old twins. It was a fantastic lesson in the benefits of birth control, and has convinced me there is no rush just yet to sign away my life. Just to illustrate the point, now that we are back in Sharm, I stayed in bed until 10am this morning.
What was most interesting and enjoyable for me however, was the chance to meet with the husband of L's cousin on the evening we stayed. Peter is actually an American from the south, so has a fantastic drawl in his accent, and as I was forewarned, was a 'serial entrepreneur' (a phrase he actually derided as ridiculous as in his opinion if you are an entrepreneur you will continuously set up businesses - he's right of course). In his case, he has set up all manner of businesses in the past, from a restaurant, real estate and haulier businesses, to his current bio-tech company, which is involved in stem cell research.
What was most heartening is that when talking to Peter was that I felt like a kindred spirit - we agreed on absolutely everything, and it made me realise how close my mindset is to that of an entrepreneur. I even outlined at a high level my business idea, which he thinks has a lot of potential - and I think he is the kind of person who would have picked holes and been honest rather than tip-toed around.
As an entrepreneur he was very impressive, and it really was an inspirational, lightbulb discussion for me. Seeing somebody who has gone out there and done it - in his case without a college degree and no background in biochemistry, made me realise there and then that the only way I can avoid being my Boss in 10yrs time is to make this happen. I need to devote significant amounts of what little free time I have towards completing the business plan, I need to oversee the site development, build initial partnerships, revenue streams, and push all this forwards so that when we emerge from the recession I have a site ready to capitalise fully on an inherent need from investors.
Some other good news since I have been away was discovering that two people who were fired from my bank at various points last year have now picked up new jobs. It must be a huge relief for them both, and does illustrate how there are jobs out there, even in these tough times. One has moved out of London and finance, the other is a wily old fox unable to do anything else, who has picked up a role at one of the more successful fund management groups.
Otherwise the deadline regarding GGP and bonds was extended by a week until today to give them more time to confirm or reject the proposed extension to the year-end. Meantime Bill Ackman, head of the activist hedge fund Pershing Square has given another interview reaffirming his belief that controlled bankrupty is the best solution both for GGP and the REIT sector as a whole (given that liquidation would have disastrous ramifications for US commercial property prices).
It was heartening to see that Ackman is pushing to join the board of GGP, as his interests are well aligned with shareholders in increasing value. Here's to a profitable outcome, meantime patience on this prevails.
I'm off now to join L at the pool and then down to the beach. I'm not really a beach or sun person but do this occasionally for her - and have an interesting book called 'The Millionaire Next Door' that Peter left for me when we returned the next morning to say goodbye. It seems to be a detailed analysis of the mindset of the 'average' millionaires in society, who are anything but the flash, opulent 'well to do' living people most would expect - actually it comes as no surprise to me, but then I understand the importance of saving, investing and living below your means. Should help pass a few tedious hours as I try to avoid burning...
Thursday, March 5, 2009
Calamity Chain(saw)
Like investors, banks so often make the mistake of under or overreacting to situations. In this case, the growing consensus at the bank is that this has been a level of cuts too far.
Suddenly all manner of tasks, from day to day tedium to vital projects, are facing significant delays. Trading, Operations and Support teams were left scrambling to try and fill the holes left by 'resources moving on', which is the amusingly non-descript corporate phrase being used to describe the practice of mercilessly firing bright, hard working employees who mostly have done nothing to deserve it. The most bizarre part is that countless teams are finding experienced experts who survived being randomly moved onto other teams that are in worse trouble. To my surprise the firm is managing to now also utilise fewer resources less efficiently.
Perhaps it's me, but the whole thing indicates a pea-brain level of decision making at the top. Presumably there is an inverse relationship between salary size and common sense.
As such my life has suddenly timewarped and gone from manageable back to an earlier time in my career, with far too much hands-on crap. I was busy working long hours before, but suddenly the lunchtime stroll I was regularly taking in the City to somewhere where I write this blog has become a luxury. I spent 6hrs solidly in meetings from 1pm yesterday for example. So much for work life balance anymore - our masters at the top appear to naively have expected us to simply deliver as much as before (perhaps because that was mostly possible in the previous round).
It is perhaps telling that Asset Management have already been given tacit approval to start hiring, which says everything you need to know about how close we are to reaching the bottom. I think we are there, but that is dependent on when the credit markets start to thaw.
On that subject, it is good to see that the UK and US governments are pushing on with policies to pump much-needed funds into the economy. I don't subscribe to the public hysteria about letting the banks rot, but that is hardly going to surprise anybody. What some people do not appreciate is that governments are not spending our money - they spend that and more before we pay taxes each year - but that due to circumstances, they are simply increasing a number in the computers at the Bank of England and Fed.
Quantatitive easing in this case is not really about printing money. In theory it will be about buying up assets that push money out to the credit markets and (in theory) encourage lending, and then selling those to the private sector once normality starts to return (paying off the money it has created). The issue is ensuring that the money is circulated rather than holed up. It is rather like if the government sent a £1000 cheque to everybody. Two years ago I would have been online to book a holiday within a minute, but today it is just as likely I might save that for the all-too-likely rainy day, thus making no actual improvement in the economic situation. Actually not in my case, I would just get on and invest it as I do most of my savings.
On that subject, GGP remains at historic lows in the 40 cent range right now. Indications are that asset sales are on the way, which should enable several loans to be paid off. There are currently fears circulating about GGP needing to dilute shares hugely through an issue to pay off additional debt next year - that is unfounded given that at these low levels the firm is worth a mere $100m, when its balance sheet indicates $3-4bn is more accurate. It would effectively hand the entire firm to a single creditor, which nobody would want. The creditor would want cash, not to inherit the mess GGP is in, and nor would it benefit significant shareholders currently negotiating such deals.
I am still optimistic that patience will see a resolution to the GGP refinancing impasse, and Chapter 11 remains a useful bargaining tool for the firm in securing fairer terms with its creditors. Having looked into this in more detail, I am starting to conclude that the UK needs to implement similar protection laws here, although hasten to add I am no expert so that is just an aside.
Finally, it was amusing to see Gordon Brown on the front page of the Metro on the way into work this morning. The caption read he was being greeted by congressmen, although as with most things relating to him, on closer inspection it was less impressive. Those eager, outstretched hands turned out to be teenage pages, who work for the senators there on secondments. Very impressive Gordon, I'm sure your vacuous speech will save the world (again) as well.
Suddenly all manner of tasks, from day to day tedium to vital projects, are facing significant delays. Trading, Operations and Support teams were left scrambling to try and fill the holes left by 'resources moving on', which is the amusingly non-descript corporate phrase being used to describe the practice of mercilessly firing bright, hard working employees who mostly have done nothing to deserve it. The most bizarre part is that countless teams are finding experienced experts who survived being randomly moved onto other teams that are in worse trouble. To my surprise the firm is managing to now also utilise fewer resources less efficiently.
Perhaps it's me, but the whole thing indicates a pea-brain level of decision making at the top. Presumably there is an inverse relationship between salary size and common sense.
As such my life has suddenly timewarped and gone from manageable back to an earlier time in my career, with far too much hands-on crap. I was busy working long hours before, but suddenly the lunchtime stroll I was regularly taking in the City to somewhere where I write this blog has become a luxury. I spent 6hrs solidly in meetings from 1pm yesterday for example. So much for work life balance anymore - our masters at the top appear to naively have expected us to simply deliver as much as before (perhaps because that was mostly possible in the previous round).
It is perhaps telling that Asset Management have already been given tacit approval to start hiring, which says everything you need to know about how close we are to reaching the bottom. I think we are there, but that is dependent on when the credit markets start to thaw.
On that subject, it is good to see that the UK and US governments are pushing on with policies to pump much-needed funds into the economy. I don't subscribe to the public hysteria about letting the banks rot, but that is hardly going to surprise anybody. What some people do not appreciate is that governments are not spending our money - they spend that and more before we pay taxes each year - but that due to circumstances, they are simply increasing a number in the computers at the Bank of England and Fed.
Quantatitive easing in this case is not really about printing money. In theory it will be about buying up assets that push money out to the credit markets and (in theory) encourage lending, and then selling those to the private sector once normality starts to return (paying off the money it has created). The issue is ensuring that the money is circulated rather than holed up. It is rather like if the government sent a £1000 cheque to everybody. Two years ago I would have been online to book a holiday within a minute, but today it is just as likely I might save that for the all-too-likely rainy day, thus making no actual improvement in the economic situation. Actually not in my case, I would just get on and invest it as I do most of my savings.
On that subject, GGP remains at historic lows in the 40 cent range right now. Indications are that asset sales are on the way, which should enable several loans to be paid off. There are currently fears circulating about GGP needing to dilute shares hugely through an issue to pay off additional debt next year - that is unfounded given that at these low levels the firm is worth a mere $100m, when its balance sheet indicates $3-4bn is more accurate. It would effectively hand the entire firm to a single creditor, which nobody would want. The creditor would want cash, not to inherit the mess GGP is in, and nor would it benefit significant shareholders currently negotiating such deals.
I am still optimistic that patience will see a resolution to the GGP refinancing impasse, and Chapter 11 remains a useful bargaining tool for the firm in securing fairer terms with its creditors. Having looked into this in more detail, I am starting to conclude that the UK needs to implement similar protection laws here, although hasten to add I am no expert so that is just an aside.
Finally, it was amusing to see Gordon Brown on the front page of the Metro on the way into work this morning. The caption read he was being greeted by congressmen, although as with most things relating to him, on closer inspection it was less impressive. Those eager, outstretched hands turned out to be teenage pages, who work for the senators there on secondments. Very impressive Gordon, I'm sure your vacuous speech will save the world (again) as well.
Monday, March 2, 2009
Cull Over - But No More Complacency
I have not been writing recently because last week turned out to be quite traumatic at the bank. To everybody's surprise, after the smokes and mirrors that are rumours around these things, they instigated a full-blooded 10%+ cull from Wednesday onwards.
It was brutal, with many colleagues I rated highly and consider friends having fallen victim. Does it make this any more personal or meaningful? Not in the slightest - I have felt fully in touch with the downturn since mid-2007, this just feels like another round. Many people I have known and worked with for years mysteriously disappeared from the global email directory (the surest first sign a 'resource' has been erased). Suddenly all number of mails were bouncing, and then the biggest shock was the immediate dismissal of one of the most productive members of my own group.
With junior trader long since departed, I had long held an assumption that this would be sufficient, or at worse the other chap with a black mark on the list would get a quiet invitation from HR upstairs for a chat. As it turned out, it was nothing of the kind, and shocked everybody to the point where we all sat in silence afterwards - with the exception of an intern who could went off to the toilet, coming back later red faced, having evidently been crying.
I never really felt particularly in danger or worried, perhaps because a part of me yearns for the shove I need to move out of this profession forever. With this round the bank has reduced headcount now by approximately 30%, so should any further cuts be required there is no doubt it will be all into the meat.
Otherwise L has been getting evermore excited by the wedding later this year. I had a weekend of talk about various, tedious aspects of planning, followed by doing my best to be enthused as I was led around the Kings Road like a puppy on a leash, to inspect her in various bikini's ahead of our vacation next week. Actually that part was enjoyable.
I have made one definite decision about the future however: the 8-7 slog that I am currently enduring cannot go on for much longer. It has been observed by many that life is too short, and I don't intend to be one of those who only realises that when it is too late. As such it is time to push on full ahead with my business plan, and I need to stop leaving work pressures as an excuse as you can make anything happen with sufficient will.
The key story that for me in the last week has to be the government's hysterical response to Fred Goodwin's fat pension.
"Not even Abu Qatada at his most unappealing could hope to match the intensity of abuse heaped on The Shred."
I was going to comment on this in some detail, until I happened upon this article by the great Jeff Randall, who sums up my own thoughts on this perfectly. A pathetic, transparent attempt by a discredited government to fuel the public thirst for vengence whilst deflecting attention from the real issues, including those most responsible - the government. They can only spin like this for so long before The Shred stops being the main story.
Fred Goodwin's pension is obscene under any circumstances in my opinion. But were I him and suddenly found myself called by Lord Myners with a zero notice threat, I would have responded in exactly the same way: on principle fight it all the way, and only make a decision like that when not strong-armed or threatened. Should he cave in now, his detractors will say that he only gave money back due to Gordon Brown and his pious preacher of hypocrisy Jacqui Smith - thus handing them an undeserved victory.
Sir Fred has ample opportunity to reflect on his compensation, public feelings and what is the right thing to do. A mark of the man will be seeing what he decides in 6-12mths without any such threats hanging over him.
Thursday, February 19, 2009
Could This Be It?
There seems to have been a subtle shift in the wind here at the bank. Go back a month, and there was naked fear in the air about imminent job cuts - in no small part fueled by stressed managers making unsubtle references to resource unavailability and performance limitations. And vicious rumour mongers like myself.
Yet there seems to have been a surprising turnaround in the last fortnight - at least here, I can't speak for other banks busy absorbing huge losses and laying off thousands. From what I can determine from various trusted sources, it seems the bank has postponed plans to lay off any more people. That in itself is significant - from top to bottom now, we have shed around about 22% of headcount which is certainly a lot.
The economy is cyclical (Gordon take note, a 10yr boom will not be followed by another one), and one effect of a particular sector going into downturn first is that the impact of this ripples outwards to the rest of the economy like a bomb exploding. I had many a bemused discussion in the last 18mths talking to very intelligent (home loving) bankers, who were coming out with ridiculous views that the London housing market was somehow "immune" from any downturn.
In this case, we in financial services have now weathered a 20 month storm since Bear Stearns' nationalisation first shook the financial world - the first significant job cuts coming from late 2007. It seems reasonable that we are therefore going to hit the bottom first too, and reach a period where things stop getting worse and headcount (and performance/earnings) stabilise. Timing is so difficult, but I am going to call us reaching that period across financial services in around 6-9mths, with us reaching the bottom of the markets in Q3 2009.
Otherwise on a work social last night, I took the opportunity to find out more details about the current talk amongst Prime Brokerage here, that we have inadvertently gotten ourselves caught up in this whole fiasco relating to yet another investment shark, Allen Stanford. Not directly of course, we would be no more likely to entrust our own funds to the financial equivalent of an East End used car salesman as we would have given a penny to Bernie Madoff.
No, the problem is that yet again Private Wealth Management have played the 'not my problem guv' card. Whereas before we had a commendable ban on any trading activity with Madoff's ponzi scheme, we seem to have let a number of our cricket-loving HNW's (high net worth individuals) go and place funds with him. As you can imagine, the internal impact has been the usual internal cover-up for now, so not much is being openly said but it is difficult to imagine we won't be openly mentioned in the press in connection to all this soon enough.
I wish I could say I was bothered, but previously market shocking stories are becoming a daily soap opera nowadays. Is it just me or is the collapse of the financial system absolutely hilarious?
Yet there seems to have been a surprising turnaround in the last fortnight - at least here, I can't speak for other banks busy absorbing huge losses and laying off thousands. From what I can determine from various trusted sources, it seems the bank has postponed plans to lay off any more people. That in itself is significant - from top to bottom now, we have shed around about 22% of headcount which is certainly a lot.
The economy is cyclical (Gordon take note, a 10yr boom will not be followed by another one), and one effect of a particular sector going into downturn first is that the impact of this ripples outwards to the rest of the economy like a bomb exploding. I had many a bemused discussion in the last 18mths talking to very intelligent (home loving) bankers, who were coming out with ridiculous views that the London housing market was somehow "immune" from any downturn.
In this case, we in financial services have now weathered a 20 month storm since Bear Stearns' nationalisation first shook the financial world - the first significant job cuts coming from late 2007. It seems reasonable that we are therefore going to hit the bottom first too, and reach a period where things stop getting worse and headcount (and performance/earnings) stabilise. Timing is so difficult, but I am going to call us reaching that period across financial services in around 6-9mths, with us reaching the bottom of the markets in Q3 2009.
Otherwise on a work social last night, I took the opportunity to find out more details about the current talk amongst Prime Brokerage here, that we have inadvertently gotten ourselves caught up in this whole fiasco relating to yet another investment shark, Allen Stanford. Not directly of course, we would be no more likely to entrust our own funds to the financial equivalent of an East End used car salesman as we would have given a penny to Bernie Madoff.
No, the problem is that yet again Private Wealth Management have played the 'not my problem guv' card. Whereas before we had a commendable ban on any trading activity with Madoff's ponzi scheme, we seem to have let a number of our cricket-loving HNW's (high net worth individuals) go and place funds with him. As you can imagine, the internal impact has been the usual internal cover-up for now, so not much is being openly said but it is difficult to imagine we won't be openly mentioned in the press in connection to all this soon enough.
I wish I could say I was bothered, but previously market shocking stories are becoming a daily soap opera nowadays. Is it just me or is the collapse of the financial system absolutely hilarious?
Thursday, February 12, 2009
Tough Times On The Milk Round
No sign of any movement today regarding job cuts, although a chap in Synthetics mentioned earlier that he has already cleared his desk and gone so far as to draft a goodbye letter to his team in readiness. Optimism seems to be but a distant memory, although with unemployment in the UK forecast to spiral upwards by 1 million in 2009, perhaps that is justified.
The spectre of unemployment is something all of us in the City are having to live with right now. I must admit, I am feeling a bit guilty about all the rumour spreading now. Oh well, I'm preparing them mentally for the big push when it happens - and I heard from another source just now that the cull has merely been postponed for a week. I suppose it partly depends on the firm, role and all manner of other factors. There is no harm in me divulging more interesting detail at some point - after all nobody is reading this anyway I expect.
To my surprise who should have wandered past me on the Desk this morning but Shriek herself. I've been lucky enough to never meet her before, and so it took somebody to point her out. In this world of globalisation, it is quite impressive how daily working relationships can be by voice alone, such that you can pass that person without even recognising them. Fortunately that worked both ways, as Shriek does not seem to know me either. She is a real oddity, with bright red (dyed) hair, and seems to have a botox habit judging by the size of her lips. In person, she seems quite different from the aggressive avatar I have known through various phone arguments, and appears to whisper rather than speak.
As such I made a sharp exit from the office before anybody noticed - the last thing I wanted to do was get dragged along to lunch with her. Obviously the 'dodgy dossier' being compiled against her can't be too serious if they've authorised travel expenses for her over to London this week.
I have been asked to take part in some graduate recruitment for the bank. As the Boss explained, this cannot impinge upon market hours, and so instead he seems to be looking for me to show enthusiasm by giving up free time on this. If the cull had already taken place, I might be tempted to show my true colours - instead I said I would be thrilled to make a positive contribution.. saracasm missed.
These are certainly tough times for graduates entering the job market for the first time in 2009. The cut back in graduate employment is in a range of sectors, and it goes without saying that banking is no exception. Many graduates interviewing with top firms now, who would have been a shoe-in for jobs in the past, are unfortunately going to get the 'small envelope' reply. That's the one which reads: 'Thank you for attending the interview, regrettably we will not be pursuing your application further at this time.'
Before feeling too sorry for graduates, they might just be the luckiest generation since the City 'talent drain' first began after Big Bang. They have a genuine chance to ask themselves that all-important question: 'what should I do in life?', without the financial opportunity cost that tempted so many of us to the devil's path.
"Why exactly do you want to go into finance?" is often my first question in interviews. I have interviewed many grads over the years, and the response is usually vague; at best recycling meangingless PR waffle from the corporate website, at worst you might get a grunt from the less communicative ones.
As somebody on the inside, I would suggest that graduates strongly consider other options. They will probably have no choice in many cases anyway - including L's little brother, who is actively looking now. Although financial services will undoubtedly recover, it is likely that compensation will take years to ever regain the levels previously seen, and a whole shake-up of the bonus culture is underway. As such, graduates today face working longer hours for less reward, which doesn't make sense to me.
As I mentioned in my first ever post, I am really looking to find a way out of this industry sooner rather than later and have always dreamed of setting up my own business. On that subject, I have a web-based business idea brewing that seems to be an excellent synergy between my skill set, experience and where there might be future demand. It's just finding the time to turn that into reality that is the biggest challenge right now.
The spectre of unemployment is something all of us in the City are having to live with right now. I must admit, I am feeling a bit guilty about all the rumour spreading now. Oh well, I'm preparing them mentally for the big push when it happens - and I heard from another source just now that the cull has merely been postponed for a week. I suppose it partly depends on the firm, role and all manner of other factors. There is no harm in me divulging more interesting detail at some point - after all nobody is reading this anyway I expect.
To my surprise who should have wandered past me on the Desk this morning but Shriek herself. I've been lucky enough to never meet her before, and so it took somebody to point her out. In this world of globalisation, it is quite impressive how daily working relationships can be by voice alone, such that you can pass that person without even recognising them. Fortunately that worked both ways, as Shriek does not seem to know me either. She is a real oddity, with bright red (dyed) hair, and seems to have a botox habit judging by the size of her lips. In person, she seems quite different from the aggressive avatar I have known through various phone arguments, and appears to whisper rather than speak.
As such I made a sharp exit from the office before anybody noticed - the last thing I wanted to do was get dragged along to lunch with her. Obviously the 'dodgy dossier' being compiled against her can't be too serious if they've authorised travel expenses for her over to London this week.
I have been asked to take part in some graduate recruitment for the bank. As the Boss explained, this cannot impinge upon market hours, and so instead he seems to be looking for me to show enthusiasm by giving up free time on this. If the cull had already taken place, I might be tempted to show my true colours - instead I said I would be thrilled to make a positive contribution.. saracasm missed.
These are certainly tough times for graduates entering the job market for the first time in 2009. The cut back in graduate employment is in a range of sectors, and it goes without saying that banking is no exception. Many graduates interviewing with top firms now, who would have been a shoe-in for jobs in the past, are unfortunately going to get the 'small envelope' reply. That's the one which reads: 'Thank you for attending the interview, regrettably we will not be pursuing your application further at this time.'
Before feeling too sorry for graduates, they might just be the luckiest generation since the City 'talent drain' first began after Big Bang. They have a genuine chance to ask themselves that all-important question: 'what should I do in life?', without the financial opportunity cost that tempted so many of us to the devil's path.
"Why exactly do you want to go into finance?" is often my first question in interviews. I have interviewed many grads over the years, and the response is usually vague; at best recycling meangingless PR waffle from the corporate website, at worst you might get a grunt from the less communicative ones.
As somebody on the inside, I would suggest that graduates strongly consider other options. They will probably have no choice in many cases anyway - including L's little brother, who is actively looking now. Although financial services will undoubtedly recover, it is likely that compensation will take years to ever regain the levels previously seen, and a whole shake-up of the bonus culture is underway. As such, graduates today face working longer hours for less reward, which doesn't make sense to me.
As I mentioned in my first ever post, I am really looking to find a way out of this industry sooner rather than later and have always dreamed of setting up my own business. On that subject, I have a web-based business idea brewing that seems to be an excellent synergy between my skill set, experience and where there might be future demand. It's just finding the time to turn that into reality that is the biggest challenge right now.
Wednesday, February 11, 2009
A Glimmer of Substance Behind The Rhetoric
After my tongue-in-cheek, but undeniably slightly malicious, rumour spreading regarding the date for the next round of job cuts here, various people have wandered past my desk this morning looking both relieved and pissed off that my 'source' (aka 'my imagination') was wrong. Hey, I might still be right - I did say cover myself by saying today *or* tomorrow...
Well since I've got rather more of a sense of job security than them, L and I have opted for some sunshine in Sharm El-Sheikh in Egypt for a spring break next month. Frankly the unrepentent drizzel of London rain, and bad news from the press, are enough to make even an optimist like me start to contemplate whether it is time to pack it all in and buy a beach hut.
There has been some interesting announcements from the new US Treasury Secretary, Tim Geithner, relating to the proposed $2 trillion update to the TARP (now rebranded the Financial Stability Plan, presumably to reassure us by removing horrible words like 'troubled').
Exactly as I expected, the programme so far seems to be a direct implementation of the skilled rhetoric with which Barack Obama has stormed the global political stage in the last 15mths. Broad in scope, inspiring hope, but with few actual specifics. However people, I think we can all quite definitely say that change has come.
Quite why the markets were expecting some kind of all-encompassing answer to this wide range of problems so soon is beyond me. Desperation most likely. The Financial Stability Plan was only a framework when the bill passed through the Senate a couple of days ago. Those buying in to capitalise on some kind of bounce are a fine example of why many lose money on the markets: were I into short selling, I would have been fully loaded up before yesterday.
Of most interest to my GGP trade is that the plan now includes the proposed relief for the Commercial Real Estate sector. In theory it will provide a means for lenders to either receive capital specifically for refinancing distressed REIT's, or roll those loans into some kind of 'bad bank' fund that reduces their own risk and exposure. Either way, once the market stops sulking, it actually has some potential to help unlock a situation where otherwise viable businesses are on the verge of bankruptcy due to the frozen commercial mortgage-backed security (CMBS) market.
Anyway, I have a fabulously quiet afternoon in prospect at the office. One of the final round interviews I had lined up with another bank was supposed to be later, but that has just been cancelled due to new hires currently not being 'commercially viable at present'. That translates into the bank realising they cannot really justify hiring when they are about to fire more employees.
Either way, given I am lucky enough to seemingly be secure for the foreseeable future I couldn't care less.. now which hotel in Sharm El-Sheikh shall I go for...
Well since I've got rather more of a sense of job security than them, L and I have opted for some sunshine in Sharm El-Sheikh in Egypt for a spring break next month. Frankly the unrepentent drizzel of London rain, and bad news from the press, are enough to make even an optimist like me start to contemplate whether it is time to pack it all in and buy a beach hut.
There has been some interesting announcements from the new US Treasury Secretary, Tim Geithner, relating to the proposed $2 trillion update to the TARP (now rebranded the Financial Stability Plan, presumably to reassure us by removing horrible words like 'troubled').
"It's been a long time coming, but tonight, because of what we did on this day, in this election, at this defining moment, change has come..."
Exactly as I expected, the programme so far seems to be a direct implementation of the skilled rhetoric with which Barack Obama has stormed the global political stage in the last 15mths. Broad in scope, inspiring hope, but with few actual specifics. However people, I think we can all quite definitely say that change has come.Quite why the markets were expecting some kind of all-encompassing answer to this wide range of problems so soon is beyond me. Desperation most likely. The Financial Stability Plan was only a framework when the bill passed through the Senate a couple of days ago. Those buying in to capitalise on some kind of bounce are a fine example of why many lose money on the markets: were I into short selling, I would have been fully loaded up before yesterday.
Of most interest to my GGP trade is that the plan now includes the proposed relief for the Commercial Real Estate sector. In theory it will provide a means for lenders to either receive capital specifically for refinancing distressed REIT's, or roll those loans into some kind of 'bad bank' fund that reduces their own risk and exposure. Either way, once the market stops sulking, it actually has some potential to help unlock a situation where otherwise viable businesses are on the verge of bankruptcy due to the frozen commercial mortgage-backed security (CMBS) market.
Anyway, I have a fabulously quiet afternoon in prospect at the office. One of the final round interviews I had lined up with another bank was supposed to be later, but that has just been cancelled due to new hires currently not being 'commercially viable at present'. That translates into the bank realising they cannot really justify hiring when they are about to fire more employees.
Either way, given I am lucky enough to seemingly be secure for the foreseeable future I couldn't care less.. now which hotel in Sharm El-Sheikh shall I go for...
Saturday, February 7, 2009
Inside Information Brings Relief
We are all privy to inside information throughout our lives. The most high profile and frowned upon (read: illegal) relates to trading. Let me just say that everybody knows it goes on all the time in the City still, but is indefensible as what is often forgotten is that there is a victim on the other side of all those trades. However most inside information is harmless, and can be obtained by pure random chance - or capitalising on a situation with some covert research.
Given the importance of the impending cull, I have been naturally keen to confirm that my neck is not going to be on the block when the big day comes. It makes a few spending decisions such as my Spring holiday that bit easier to decide - will it by Cyprus or Great Yarmouth?
Whenever I am the last one in the office, which is a frequent occurrence at present even when not that busy (now is a time to be 'seen', which is bullshit I know, but is the way it works), I often take a moment to go around and turn off some people's monitors. I have a strong green streak within me that hates to see energy wasted, even when I am not paying for it.
To my surprise, when I glanced into my Boss' office last night, he had clearly left for the day, but had left his PC on and completely unlocked. What would you do? Perhaps you would feel an ethical dilemma - wanting to respect privacy and not take advantage. To do unto others as they would do to you.
I on the other hand had no such conflict, given that my Boss probably browses our mails, and would stab any of us in the back in a second to save his own well-endowed behind.
So after moving the mouse to ensure his PC did not auto-lock, I quietly went back to my desk for another 15mins to ensure there was no return. I then scouted around the office to confirm nobody important was still around. After that, I completed a highly efficient turnover of his office and mailbox that would have made a professional burglar proud. Let me add I did not look for or read anything personal - none of my business and frankly I have no interest in his family life. There was no wasting time on anything other than a search for those small items of interest.
It took all of about 30 seconds to open his various folder trees and locate the Budget --> Resourcing --> 2009 folder that was most of interest. There was nothing too obvious apart from a locked spreadsheet attached to one mail - a quick search in other mails in the folder revealed the password. So within a minute, to my surprise I had come across a breakdown of what my entire team earned in 2008 (base and bonus), along with base for 2009.
That only made me feel better because I am amazed how little some of them are earning. If ever you needed proof that a strategic move or two throughout your early career - along with renegotiation on the way - pays better than serving your time at the same bank, then I have it. Put it this way, I won't be complaining too much going forwards. What it did *not* do was answer the more important question: so besides taking a print out to browse for my own amusement on the Tube home, I closed that and sifted his folders. Nothing in there I could see of relevance either, and then I found his notebook under some papers on the desk.
Sure enough a number of pages back from the most recent was a header scrawled 'Resource Review'. Here I could see the Boss had listed the entire team's names (except his own, naturally) with a couple of comments. These seemed to be justification (or otherwise) for keeping each of us - perhaps during a roundtable session with other Desk managers to discuss headcount reductions, who knows? Next to mine were the words "business critical work, high experience", which sounded nicely like a justification. Others had similar comments, and by contrast several others who were in my own 'bottom 5' assessment had comments such as "low experience, low impact", "project coming to end", "issues working with xxxx".
It felt rather like a conspiracy reading through those notes, but I am 90% sure I found what I was looking for. It was further confirmed when I noticed a black line next to the left of two of the names. That would tie in with my view of the percentage reduction required for the cull but he might have been idly doodling I suppose.
One is a nice chap who has just joined in January to backfill a voluntary leaver - for me he was only taken on to keep up our numbers and so is prime cannon fodder. The other was the junior trader who has just quit under those somewhat mysterious circumstances. I have also confirmed the date of the cull through a source, but am not going into any details.
Anyway, suffice to say that I am feeling about as relaxed as anybody in the firm can be right now, knowing not only that I am almost certainly safe (this time), but seem to be doing relatively well on the cash front compared to most of my colleagues. Disgraceful I know, I'll down an extra shot of Ruski tonight with my Hail Mary's.
Given the importance of the impending cull, I have been naturally keen to confirm that my neck is not going to be on the block when the big day comes. It makes a few spending decisions such as my Spring holiday that bit easier to decide - will it by Cyprus or Great Yarmouth?
Whenever I am the last one in the office, which is a frequent occurrence at present even when not that busy (now is a time to be 'seen', which is bullshit I know, but is the way it works), I often take a moment to go around and turn off some people's monitors. I have a strong green streak within me that hates to see energy wasted, even when I am not paying for it.
To my surprise, when I glanced into my Boss' office last night, he had clearly left for the day, but had left his PC on and completely unlocked. What would you do? Perhaps you would feel an ethical dilemma - wanting to respect privacy and not take advantage. To do unto others as they would do to you.
I on the other hand had no such conflict, given that my Boss probably browses our mails, and would stab any of us in the back in a second to save his own well-endowed behind.
So after moving the mouse to ensure his PC did not auto-lock, I quietly went back to my desk for another 15mins to ensure there was no return. I then scouted around the office to confirm nobody important was still around. After that, I completed a highly efficient turnover of his office and mailbox that would have made a professional burglar proud. Let me add I did not look for or read anything personal - none of my business and frankly I have no interest in his family life. There was no wasting time on anything other than a search for those small items of interest.
It took all of about 30 seconds to open his various folder trees and locate the Budget --> Resourcing --> 2009 folder that was most of interest. There was nothing too obvious apart from a locked spreadsheet attached to one mail - a quick search in other mails in the folder revealed the password. So within a minute, to my surprise I had come across a breakdown of what my entire team earned in 2008 (base and bonus), along with base for 2009.
That only made me feel better because I am amazed how little some of them are earning. If ever you needed proof that a strategic move or two throughout your early career - along with renegotiation on the way - pays better than serving your time at the same bank, then I have it. Put it this way, I won't be complaining too much going forwards. What it did *not* do was answer the more important question: so besides taking a print out to browse for my own amusement on the Tube home, I closed that and sifted his folders. Nothing in there I could see of relevance either, and then I found his notebook under some papers on the desk.
Sure enough a number of pages back from the most recent was a header scrawled 'Resource Review'. Here I could see the Boss had listed the entire team's names (except his own, naturally) with a couple of comments. These seemed to be justification (or otherwise) for keeping each of us - perhaps during a roundtable session with other Desk managers to discuss headcount reductions, who knows? Next to mine were the words "business critical work, high experience", which sounded nicely like a justification. Others had similar comments, and by contrast several others who were in my own 'bottom 5' assessment had comments such as "low experience, low impact", "project coming to end", "issues working with xxxx".
It felt rather like a conspiracy reading through those notes, but I am 90% sure I found what I was looking for. It was further confirmed when I noticed a black line next to the left of two of the names. That would tie in with my view of the percentage reduction required for the cull but he might have been idly doodling I suppose.
One is a nice chap who has just joined in January to backfill a voluntary leaver - for me he was only taken on to keep up our numbers and so is prime cannon fodder. The other was the junior trader who has just quit under those somewhat mysterious circumstances. I have also confirmed the date of the cull through a source, but am not going into any details.
Anyway, suffice to say that I am feeling about as relaxed as anybody in the firm can be right now, knowing not only that I am almost certainly safe (this time), but seem to be doing relatively well on the cash front compared to most of my colleagues. Disgraceful I know, I'll down an extra shot of Ruski tonight with my Hail Mary's.
Friday, February 6, 2009
From Ruski With Love
I had a night out with some colleagues at the bank last week who were over from Moscow, and opted to take them to an excellent Russian restaurant over in Chelsea called Nikita's. It's rather like taking an American to the Texas Embassy Cantina I suppose, but I couldn't resist getting their opinion on London's alleged best for Russian cuisine. Sadly none of this is on expenses anymore - a tragic sign of the times.
Actually we had an excellent evening, and I was introduced to their nectar of choice - a fantastic vodka called 'Ruski Standard Platinum' (aka 'Russian Standard' over here). Apart from eating the finest beef stroganoff I have ever tasted, on the recommendation that "it will make it easier for you in the morning" (presumably because it is such a heavy, rich dish), we polished off two full 75clr bottles of Ruski between the four of us, and it took restraint not to order a third. [note: I have just ordered 4 bottles - a couple as gifts I might add]
To my surprise I not only slept fine, but woke up without the slightest hint of a hangover. This could be my new tipple of choice now that I'm getting a bit too old for beer. Let's face it, lager in particular is devil's piss by comparison to fine wine and spirits, and with the added bonus that it wakes you up throughout the night to continually empty your bladder.
As usual, once we had got through the first bottle, we moved away from tedious work discussions such as the Desk performance (bad), and rumours about job cuts (very bad, for an emerging market heavily reliant on commodities for revenue), and onto the requisite exchange of office stories that can only ever be passed on verbally. On the subject of job cuts, it has already occurred to me that I cannot refer to any details around the timing of the impending cull, because it will be too indicative of where I work. As such I shall likely write some entries at the time but not publish them until some time afterwards.
The best story of the night for me was finding out that one of the senior traders I know on the Moscow desk, whom we call Shriek due to her piercing voice, has a husband known in the office for his odd behaviour that verges on psychosis. He apparently calls Shriek at the office 30 times a day, and it has got to the extent that her team has learned his number and filters it out where possible.
It is presumably jealousy, as Shriek's psycho husband even went so far as accusing her of having an affair with one of my colleagues (at Nikita's with me that evening). Shriek's husband had 'proof' - namely that my colleague's wife "told him of the affair". Since both Shriek and my colleague knew this was utter fantasy, rather than her assuming she had a husband who was bonkers, she decided it was a plot by my colleague to ruin her marriage - and aggressively confronted him in the office.
It ended up escalating until even the regional head MD got involved.. before being hastily covered up. From what I hear, they are now quietly compiling a dossier on Shriek for a range of her own odd activity. This one will doubtless be tucked away in her HR file for use at an appropriate time. Like a round of job cuts for example.
Actually we had an excellent evening, and I was introduced to their nectar of choice - a fantastic vodka called 'Ruski Standard Platinum' (aka 'Russian Standard' over here). Apart from eating the finest beef stroganoff I have ever tasted, on the recommendation that "it will make it easier for you in the morning" (presumably because it is such a heavy, rich dish), we polished off two full 75clr bottles of Ruski between the four of us, and it took restraint not to order a third. [note: I have just ordered 4 bottles - a couple as gifts I might add]
To my surprise I not only slept fine, but woke up without the slightest hint of a hangover. This could be my new tipple of choice now that I'm getting a bit too old for beer. Let's face it, lager in particular is devil's piss by comparison to fine wine and spirits, and with the added bonus that it wakes you up throughout the night to continually empty your bladder.As usual, once we had got through the first bottle, we moved away from tedious work discussions such as the Desk performance (bad), and rumours about job cuts (very bad, for an emerging market heavily reliant on commodities for revenue), and onto the requisite exchange of office stories that can only ever be passed on verbally. On the subject of job cuts, it has already occurred to me that I cannot refer to any details around the timing of the impending cull, because it will be too indicative of where I work. As such I shall likely write some entries at the time but not publish them until some time afterwards.
The best story of the night for me was finding out that one of the senior traders I know on the Moscow desk, whom we call Shriek due to her piercing voice, has a husband known in the office for his odd behaviour that verges on psychosis. He apparently calls Shriek at the office 30 times a day, and it has got to the extent that her team has learned his number and filters it out where possible.
It is presumably jealousy, as Shriek's psycho husband even went so far as accusing her of having an affair with one of my colleagues (at Nikita's with me that evening). Shriek's husband had 'proof' - namely that my colleague's wife "told him of the affair". Since both Shriek and my colleague knew this was utter fantasy, rather than her assuming she had a husband who was bonkers, she decided it was a plot by my colleague to ruin her marriage - and aggressively confronted him in the office.
It ended up escalating until even the regional head MD got involved.. before being hastily covered up. From what I hear, they are now quietly compiling a dossier on Shriek for a range of her own odd activity. This one will doubtless be tucked away in her HR file for use at an appropriate time. Like a round of job cuts for example.
Thursday, February 5, 2009
More Baracking Gets A Reaction
I am a firm believer in the need for regular, institutional change at the highest level; you only have to look at how power corrupts over time, or leads to grotesque complacency of the worst kind. For examples in politics, you need only think back to the detachment from reality of Margaret Thatcher towards the end, or New Labour now, and of course George W Bush for the last.. 8 years. Okay he's a special case but you take my point.
With institutions such as banks, that complacency (and in some cases corruption - you know who you are Bernie), has had longer to fester right up to the top. As we all know, it has been spectacularly laid to bare in the last year, what with the problems requiring vast government bail outs to save many financial institutions. A recent point of major angst with the politicians and public at large are the continuing ramifications from the presumption of bonus payments as some kind of right by many at the top of those banks which have performed worst.
One point on that is to note that some are indeed contractually guaranteed - particularly the rainmakers that bring in vast sums for a bank and could walk to a competitor in a second. However, that is a small percentage of the overall pot so it is not an excuse.
However an interesting development today was Barack Obama's latest announcement that all banks that have received bail outs will need to cap executive pay to a mere $500,000. I think that I can safely disclose that we are one of the 90% of banks that have received some kind of financial package from a government. The reaction here at the bank has been impressive - faced with the prospect of having their pay limited to such trifling levels, the order has come from the very top to immediately investigate ways to pay back the government.
It is hilarious how the moment executives at the top find the trough being emptied, they're squealing with indignation and looking for ways to get their snouts back in. So let me see - your priority is helping fund all those businesses suffering as a direct result of the systemic failure of which you have to accept a proportion of responsibility? No, it seems to be working out how to squeeze internally through the coming cull, or externally via recalling loans, to ensure we remain fully independent of the US government.
Away from the subject of bonuses, it is interesting to see that momentum is building up through the press for the strong case of investing in gold as a good option for 2009. I continue to recommend placing significant funds into a gold ETF and moving some away from Sterling and the US dollar this year, but the linked article gives a good summary with some options.
Otherwise I have found out some interesting office rumours from a recent night out, as well as confirming whether I am to be included in the coming job cuts. Both can wait for another entry.
With institutions such as banks, that complacency (and in some cases corruption - you know who you are Bernie), has had longer to fester right up to the top. As we all know, it has been spectacularly laid to bare in the last year, what with the problems requiring vast government bail outs to save many financial institutions. A recent point of major angst with the politicians and public at large are the continuing ramifications from the presumption of bonus payments as some kind of right by many at the top of those banks which have performed worst.
One point on that is to note that some are indeed contractually guaranteed - particularly the rainmakers that bring in vast sums for a bank and could walk to a competitor in a second. However, that is a small percentage of the overall pot so it is not an excuse.
However an interesting development today was Barack Obama's latest announcement that all banks that have received bail outs will need to cap executive pay to a mere $500,000. I think that I can safely disclose that we are one of the 90% of banks that have received some kind of financial package from a government. The reaction here at the bank has been impressive - faced with the prospect of having their pay limited to such trifling levels, the order has come from the very top to immediately investigate ways to pay back the government.
It is hilarious how the moment executives at the top find the trough being emptied, they're squealing with indignation and looking for ways to get their snouts back in. So let me see - your priority is helping fund all those businesses suffering as a direct result of the systemic failure of which you have to accept a proportion of responsibility? No, it seems to be working out how to squeeze internally through the coming cull, or externally via recalling loans, to ensure we remain fully independent of the US government.
Away from the subject of bonuses, it is interesting to see that momentum is building up through the press for the strong case of investing in gold as a good option for 2009. I continue to recommend placing significant funds into a gold ETF and moving some away from Sterling and the US dollar this year, but the linked article gives a good summary with some options.
Otherwise I have found out some interesting office rumours from a recent night out, as well as confirming whether I am to be included in the coming job cuts. Both can wait for another entry.
Friday, January 30, 2009
Oh, Stop The Baracking
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.
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.
Thursday, January 29, 2009
For Whom The Bell Tolls
"Perchance he for whom this bell tolls may be so ill, as that he knows not it tolls for him; and perchance I may think myself so much better than I am, as that they who are about me, and see my state, may have caused it to toll for me, and I know not that."
In John Donne's round about way, he was observing how interconnected we all are, which was a good effort in a world before globalisation. On the other hand I recall learning that same lesson on the bus on the way home from school aged 14, as I sat next to one of my best friends, Birdshit. I should qualify he was named that because of a permanent, natural little blond patch in his hair that.. well, you get the idea.
I recall turning to say something to Birdshit, with my mouth wide open, and at that exact same moment he (with a streaming, heavy cold) turned and sneezed in my face. I can still remember that feeling as his snot was catapulted down my throat. The cause and effect was apparent within seconds. I had him in an armlock and was repeatedly beating his head against the glass, and then two days later I had a streaming, heavy cold up at my Grandma's.
Anyway, the events of the last year can only have confirmed to those in the City that their welfare was actually strongly interlinked with red necks in the States. I know a few who would probably snort indignantly now at such a suggestion, but the facts speak for themselves given how many currently give a best case scenario of ending 2009 still with a job.
That process of interconnectedness is beginning to get juicy here at the Bank. The bell is busy tolling like a death chime for the coming cull on the trading floor - only really noticeable during the quiet periods before Squark Box. A number of my fellow bankers have had a quiet shoulder tap or 'invitation upstairs for a chat' from an unknown HR manager in recent months, and as I mentioned previously, that process has actively fuelled fear and I think is soon about to continue.
For some who are more in need of a job than me, supporting families with all the costs associated, I can almost see the sense of semi-permanent desperation and fear. But actually the whole thing *is* an enormous joke, and we really need to confront it and realise that the worst case scenario isn't actually that big a deal.
Otherwise I wish people would stop bringing their stress to work, the City just isn't as much fun as it used to be. Until something interesting kicks off at the bank, I think it's time to get back onto investing again next time.
In John Donne's round about way, he was observing how interconnected we all are, which was a good effort in a world before globalisation. On the other hand I recall learning that same lesson on the bus on the way home from school aged 14, as I sat next to one of my best friends, Birdshit. I should qualify he was named that because of a permanent, natural little blond patch in his hair that.. well, you get the idea.
I recall turning to say something to Birdshit, with my mouth wide open, and at that exact same moment he (with a streaming, heavy cold) turned and sneezed in my face. I can still remember that feeling as his snot was catapulted down my throat. The cause and effect was apparent within seconds. I had him in an armlock and was repeatedly beating his head against the glass, and then two days later I had a streaming, heavy cold up at my Grandma's.
Anyway, the events of the last year can only have confirmed to those in the City that their welfare was actually strongly interlinked with red necks in the States. I know a few who would probably snort indignantly now at such a suggestion, but the facts speak for themselves given how many currently give a best case scenario of ending 2009 still with a job.
That process of interconnectedness is beginning to get juicy here at the Bank. The bell is busy tolling like a death chime for the coming cull on the trading floor - only really noticeable during the quiet periods before Squark Box. A number of my fellow bankers have had a quiet shoulder tap or 'invitation upstairs for a chat' from an unknown HR manager in recent months, and as I mentioned previously, that process has actively fuelled fear and I think is soon about to continue.
For some who are more in need of a job than me, supporting families with all the costs associated, I can almost see the sense of semi-permanent desperation and fear. But actually the whole thing *is* an enormous joke, and we really need to confront it and realise that the worst case scenario isn't actually that big a deal.
Otherwise I wish people would stop bringing their stress to work, the City just isn't as much fun as it used to be. Until something interesting kicks off at the bank, I think it's time to get back onto investing again next time.
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.
Monday, January 26, 2009
Whispering Rumours, Job Cuts & Backstabbing
It goes without saying that the mood in the City right now is sombre, and as bad as I have ever seen. What's more worrying is that even the old timers who are serving life sentences at the bank also comment on how they have never seen anything this bad.
However as with investing, people need to detach those emotions and put everything into perspective, or we risk sensationalising the situation like the press.
Yes we're in for a tough year or two. For the vast majority of us that simply means a little belt tightening and dealing with some jobs worries. Otherwise there is really no meaningful difference. For that minority who end up out of work or losing their homes it is a different story of course, but that's not something that will happen to me as I'm financially insulated. While I feel sorry for those in that position, you make your own bed in life to a large extent, whether you realise it or not.
Strangely I'm still fending off calls from headhunters despite the downturn, and am delaying final round interviews at a couple of decent firms purely to cover my angles ahead of the next round of job cuts at my bank. It seems a little odd to me to be in such a fortunate position, especially as I know plenty of people who have already been out of work for as much as 15mths now, which I'm sure must be horrendous.
Everyday at work, beyond the buzz of the trading floor, there are whispers as bankers quietly discuss the latest job rumours. Despite assurances from senior management after the last round before Christmas that that was it, these mostly focus upon when the next round will be. I for one am far too cynical to believe the last cull was anything other than the start of the process. Why? I researched and asked old timers what has happened before in these circumstances and they knowingly told me the process.
Senior bankers seem to actively do their best to depress their workforce in times like this. Mostly it's because rather than biting the bullet and cutting 25% of the workforce in one go like they ought to, and being able to convincingly tell all the remainder they are now safe, they instead go about it via 3 or 4 rounds of 10% cuts (or smaller rounds that are not noticed as much), spaced over a year or more. That leaves everybody scared, depressed and fearing they will be next.
The City's an interesting place to work, where people do take a certain malicious glee in discussing and joking about the possibility of job losses in the same way we discuss companies and financial opportunities. I am no exception, and as such have been busy spreading the rumour that a cut is imminent in early February, and bandying around figures as high as 10-15%.
In my case I have analysed the percentage gone so far, and that estimate seems quite realistic. I have even gone so far as to draw up a spreadsheet of my team members, to work out who the next 1 or 2 should be to go in the next round. I'm being honest with myself and don't think I factor in the bottom 5, hence my assumption I should be some way off the firing line at present. Or so I like to comfort myself.
Nonetheless that doesn't take into account the huge amounts of political maneouvering and backstabbing that is an everyday part of City life. You never quite know what else is going on out of sight, particularly in earlier times at some of the other places I worked.
At another bank, when I joined I quickly worked out that a colleague, Irish Al, had a deep loathing of our manager. Not so unusual you might think, until I learned that 'The Dome', as he was known due to his shining, bald head and apparent desire for all of us to worship at his feet whenever possible to feed his ego, had secured a fast promotion from the new group head when he took over. He did this by meeting with him and planting the idea that he had come up with the idea for a new product that was making us lots of money in the markets.
However as with investing, people need to detach those emotions and put everything into perspective, or we risk sensationalising the situation like the press.
Yes we're in for a tough year or two. For the vast majority of us that simply means a little belt tightening and dealing with some jobs worries. Otherwise there is really no meaningful difference. For that minority who end up out of work or losing their homes it is a different story of course, but that's not something that will happen to me as I'm financially insulated. While I feel sorry for those in that position, you make your own bed in life to a large extent, whether you realise it or not.
Strangely I'm still fending off calls from headhunters despite the downturn, and am delaying final round interviews at a couple of decent firms purely to cover my angles ahead of the next round of job cuts at my bank. It seems a little odd to me to be in such a fortunate position, especially as I know plenty of people who have already been out of work for as much as 15mths now, which I'm sure must be horrendous.
Everyday at work, beyond the buzz of the trading floor, there are whispers as bankers quietly discuss the latest job rumours. Despite assurances from senior management after the last round before Christmas that that was it, these mostly focus upon when the next round will be. I for one am far too cynical to believe the last cull was anything other than the start of the process. Why? I researched and asked old timers what has happened before in these circumstances and they knowingly told me the process.
Senior bankers seem to actively do their best to depress their workforce in times like this. Mostly it's because rather than biting the bullet and cutting 25% of the workforce in one go like they ought to, and being able to convincingly tell all the remainder they are now safe, they instead go about it via 3 or 4 rounds of 10% cuts (or smaller rounds that are not noticed as much), spaced over a year or more. That leaves everybody scared, depressed and fearing they will be next.
The City's an interesting place to work, where people do take a certain malicious glee in discussing and joking about the possibility of job losses in the same way we discuss companies and financial opportunities. I am no exception, and as such have been busy spreading the rumour that a cut is imminent in early February, and bandying around figures as high as 10-15%.
In my case I have analysed the percentage gone so far, and that estimate seems quite realistic. I have even gone so far as to draw up a spreadsheet of my team members, to work out who the next 1 or 2 should be to go in the next round. I'm being honest with myself and don't think I factor in the bottom 5, hence my assumption I should be some way off the firing line at present. Or so I like to comfort myself.
Nonetheless that doesn't take into account the huge amounts of political maneouvering and backstabbing that is an everyday part of City life. You never quite know what else is going on out of sight, particularly in earlier times at some of the other places I worked.
At another bank, when I joined I quickly worked out that a colleague, Irish Al, had a deep loathing of our manager. Not so unusual you might think, until I learned that 'The Dome', as he was known due to his shining, bald head and apparent desire for all of us to worship at his feet whenever possible to feed his ego, had secured a fast promotion from the new group head when he took over. He did this by meeting with him and planting the idea that he had come up with the idea for a new product that was making us lots of money in the markets.
The reality was that Irish Al had devised it, but to his amazement soon found himself working for the underachieving Dome - and suffering his wrath for the classic reason that he was a perceived threat. Actually now I think of it, I found out that Irish Al was fired last Wednesday from the bank.. something tells me that The Dome will still be there in his kingdom. He'll probably have his entire team sacrificed this year in order to save his own skin.
It might just disappoint you by my saying that where I work now is a refreshing improvement. That might be part of what makes it more successful. Having said that, I'm sure as times get tougher we'll see the real character of a few of those around me.
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