At the end of October, Deutsche Bank held a town hall on the topic of electronic communication, specifically the perils of making statements re: engaging in fraud, even in jest. To be safe, one should reserve such riffing for face-to-face conversations, or, to avoid headaches in the form of house calls from the FBI, insert some sort of disclaimer in the chat making clear that any talk of breaking the law is not to be taken seriously. Clearly, these are good tips that Deutsche employees will presumably employ moving forward. Unfortunately, they came a bit too late for trader Richard Whalen, who in retrospect would’ve appreciated hearing them before taking part in the “ill-advised” banter that led to this: Read more »
Deutsche Bank Warning To Employees Re: Not Joking About Market Manipulation Would’ve Been More Useful To Robert Wallden Yesterday!By Bess Levin
Florida-Based Deutsche Bank Investment Bankers, Traders Can’t Even Remember What It Was Like To Consider It A Victory To Get To Sit Down During Their Commute To WorkBy Bess Levin
As those of you outside of New York City can attest, in other parts of the world, people do not need to limit their grocery store purchases to the number of bags they can carry (if they prefer not to order food online, sight unseen), wait for the B for what feels like an eternity while F train after F train after F train passes through the station, stake their claim to an apartment the second they walk through the door if they want any shot of getting it,* fantasize about having an in-unit washer/dryer, or feel like they’re taking crazy pills while watching the featured couple on any give episode of House Hunters declare they are looking for “At least 4 bedrooms, a minimum of 2,000 square feet, big backyard, granite countertops, stainless steel appliances, double vanity in the master bath, finished basement, gotta have a finished basement” on a $185,000 dollar budget, a wish list that turns out to be totally doable.**
None of these are the reasons why Deutsche Bank is moving a whole bunch of bankers and traders to Jacksonville, Florida– those would be the immense cost savings, of course–, but they are some of the factors being cited as bright sides among the relocated. Read more »
“[Deustche Bank chief Anshu] Jain is a hard-charging investment-banking veteran with a well documented interest in tigers.” [WSJ]
Bloomberg has an absolutely amazing story this morning about political economy and going the extra mile to build a successful business. Specifically it’s about a guy who
- worked as a mortgage banker,
- left to be a senior banking consumer-protection regulator,
- wrote regulations prohibiting big banks from providing certain kinds of mortgages because they were too predatory, and
- then left to start his own company to provide those mortgages.
That’s pretty much the American dream is it not?
The story is unimprovable so go read it; I have exaggerated but only slightly.1 The guy is Raj Date, a former Capital One and Deutsche Bank2 banker who became deputy director of the Consumer Financial Protection Board, wrote rules making it hard for banks to make mortgages that don’t satisfy certain bright-line requirements, and then left to start a company called Fenway Summer LLC that will do what banks can’t: Read more »
I used to work in a business that, among other things, helped clients get financing against securities. One thing that you learn quickly in that business, and then spend the rest of your career trying to forget, is that the simplest way to get financing against securities is to sell them. You’ve got $100 of stock and want to borrow $80 of cash against it? Just sell the stock, now you have $100, you’re welcome.1
This is not a perfect solution, of course, because you presumably owned the stock for a reason, and that reason was presumably that you thought it would go up.2 And if you sell it you lose the chance to participate in that upside. So one thing you could do is (1) sell your stock for $100 today and (2) enter into some sort of transaction that gives you some or all of the upside in the stock over some period of time. Like, you could buy a call option struck at $100, giving you all the upside and none of the downside, though at the cost of having to pay premium for the call option. Or you could enter into a total return swap struck at $100, giving you all of the upside and all of the downside at a zero-ish cost. Or you could enter into a forward contract to buy back the stock, which is the same as the swap, more or less. That last one – sell stock today, enter into a forward to buy it back in the future – is so common that it has a name, and the name is “repo.” Read more »