When it comes to telling employees to take a long lunch and not come back. Read more »
It’s not Venezuela, now that old Hugo is gone. It’s not Cuba. And it’s definitely not the U.S. Indeed, the ballsiest country on this side of the globe seems to be measuring its cojones against us, in a series of direct throw-downs. And Argentina’s are bigger. Read more »
Getting caught money-laundering for the Iranians and drug cartels is pretty bad for business, as HSBC’s 2012 results demonstrate. But coming into compliance with all these new banking regulations is even worse.
Disgraced though HSBC may be, what with the $4 billion-plus it paid in fines to regulators last year, and the 17% drop in profit that entails, the old Hongkong and Shanghai Banking Corp. managed to shrink less than its friends in Frankfurt in an unusual race backwards, thereby dethroning the Germans as Europe’s largest bank. Read more »
Swiss Banks That Tasked Employees With Helping Clients Evade Taxes Are Saving Themselves By Turning In Said Employees, Muttering “I can’t believe you’d do something like that, don’t you know tax evasion is illegal” Loud Enough For Others To HearBy Bess Levin
Swiss banks are turning over thousands of employee names to U.S. authorities as they seek leniency for their alleged role in helping American clients evade taxes, according to lawyers representing banking staff. At least five banks supplied e-mails and telephone records containing as many as 10,000 names to the U.S. Department of Justice, according to estimates by Douglas Hornung, a Geneva- based lawyer representing 40 current and former employees of HSBC Holdings’s Swiss unit, Credit Suisse, and Julius Baer Group Ltd. The data handover is illegal, said Alec Reymond, a former president of the Geneva Bar Association, who is representing two Credit Suisse staff members. “The banks are burning their own people to try and cut deals with the DOJ,” said Hornung. “This violation of personal privacy is unprecedented in the Swiss banking industry.” [Bloomberg]
Oh, the world. Go read Jeremy Grantham’s GMO quarterly letter; as always it’s pretty fun. Then go read this HSBC report that Paul Murphy wrote about on Alphaville. These are things you probably know already but are worth remembering. First, Grantham:
The central truth of the investment business is that investment behavior is driven by career risk. In the professional investment business we are all agents, managing other peoples’ money. The prime directive, as Keynes knew so well, is first and last to keep your job. To do this, he explained that you must never, ever be wrong on your own. To prevent this calamity, professional investors pay ruthless attention to what other investors in general are doing. The great majority “go with the flow,” either completely or partially. This creates herding, or momentum, which drives prices far above or far below fair price. There are many other inefficiencies in market pricing, but this is by far the largest. It explains the discrepancy between a remarkably volatile stock market and a remarkably stable GDP growth, together with an equally stable growth in “fair value” for the stock market. This difference is massive – two-thirds of the time annual GDP growth and annual change in the fair value of the market is within plus or minus a tiny 1% of its long-term trend. The market’s actual price – brought to us by the workings of wild and wooly individuals – is within plus or minus 19% two-thirds of the time. Thus, the market moves 19 times more than is justified by the underlying engines!
You probably knew that, though the numbers were new to me.* This though seemed like a useful breakdown: Read more »
Yeah, well. Apparently someone has been snacking between meals, and now there will be purges:
“There was a lot of talk about streamlining going on at the last strategy day, so I suppose this is a function of that,” one top 10 HSBC shareholder told Reuters. “It is a quite sprawling bank, and I wouldn’t be surprised if it has got a bit bloated here and there,” he said.
Sky News reports 10,000 cuts to save $3.5 billion. Many cuts will be in retail – shutting down 39 unprofitable markets, selling U.S. credit cards business, and shrinking U.S. retail. Read more »
HSBC Banker Who Got Knife Pulled On Him By Ex-Girlfriend For Going On A Date One Day After Break-Up Headed To JailBy Bess Levin
Remeber Toby Carroll? To recap, he’s a New Zealand-born real estate analyst for HSBC who’s been stationed in Dubai for the last several years. In January, he was jailed after his ex-girlfriend, Priscilla Ferreira, found him and a new girl, Danielle Spencer, in his apartment and proceeded to start slashing curtains, furniture, etc, and go after the Danielle with a knife.** The police were called and all three were sent downtown because in Dubai, sex outside marriage is illegal. After a week in the clink Carroll, who friends describe as “a fun-loving party boy who was dedicated to his job, a snappy dresser who liked women but wasn’t womanizer,” was released (as were the ladies who became friends after being forced to share a mattress in the women’s cell at Bur Dubai police station. Hopefully Carroll’s made the most of his freedom over the last 6 months, because he’s set to be sent back after receiving his sentencing last week. Read more »