Feel free to exchange exultations, insults and sour-grape rationalizations below. Read more »
Umm so maybe someone wants to explain to me what happened to Glenn Hadden? He’s the head of rates at Morgan Stanley, formerly at Goldman, and he was just banned from all CME trading floors for ten days, which is a little funny because, like, what, was he going to walk around on an exchange floor? Like in a tour group? But actually he can’t use computers either,1 so basically, no Treasury futures for ten days. That starts in mid-July and, god, I’d like to be banned from a computer for ten days in July, but I guess the perks of being a successful rates trader include punishments like that.
Anyway the thing he did was … well here is the Notice of Disciplinary Action, which says that the thing he did was violate CBOT Rule 560, which requires that big “positions must be initiated and liquidated in an orderly manner.” So his offense was to trade in a disorderly way when he was at Goldman five years ago. Specifically:
December 19, 2008, during the final minute prior to expiration of the December 2008 10-Year Treasury futures contract, in order to cover the tail (a standard form of risk management activity associated with holding a Treasury futures position at expiry) for the position held by Goldman, Sachs & Co.’s Treasury Desk, Hadden, then a Treasury trader for Goldman Sachs & Co., executed a 100-lot market order, and then submitted a 50-lot limit order, which was only partially filled as a result of illiquidity in the market. During the course of these orders and subsequent fills, the market traded up 27+ ticks resulting in the final price of the December 2008 10-year Treasury futures contract settling above what was indicated by the December – March calendar spread.
So: he tried to buy a lot of Treasury futures real fast, and as a result of that he ended up paying too high a price for them. I guess that’s a little “disorderly” but also sort of underwhelming.2
What is going on? Obviously there are two possibilities: Read more »
Mr. Gorman sent an e-mail on Wednesday promoting the music career of his daughter, whose band, Madness and the Film, released an EP, four songs on iTunes, over the weekend. “She recorded the music with a British musician over the past six months,” Mr. Gorman wrote in the e-mail. “They co-wrote lyrics, music and play and sing the songs. He is lead vocals and she sings back-up and plays numerous instruments.” In an interview, Mr. Gorman said Caroline, 17, has always had a passion for music and plays piano in her school’s orchestra. When she was 15, Ms. Gorman was playing in bars and had booked studio space in Chelsea. She spent every Friday night for months recording her first CD. “She plays everything,” he said. Last year, while in upstate New York, Ms. Gorman met David Breeze, a British musician, and the two of them joined together to form Madness and the Film. The songs released on iTunes have a melodic, indie pop rock feel to them. [Dealbook, related, related, related]
The Fed has some “large U.S. financial services firms” by the balls. Morgan Stanley is not among them. Read more »
“The fixed-income rebuild hasn’t worked as well as they had hoped,” David Trone, an analyst with JMP Securities LLC in New York, said in a Bloomberg Radio interview. “They want to be more of an asset-gathering institution that also does investment banking and a little bit of trading. They’re not yet really to the point where they’ve convinced all of us what they are yet.”
One way to think about Morgan Stanley is that it’s a big room full of people who invest (or, trade with) other people’s money.1 That money finds its way into Morgan Stanley’s hands in different ways, and those ways change (slowly) over time. Some of it comes from individual investors whose wealth Morgan Stanley Global Wealth Management manages, globally. Some of it is from mutual funds and institutional assets managed by Morgan Stanley Asset Management. Some of it is from shareholders. Some of it is bank deposits. Quite a bit of it is repo and whatnot.
Here’s the mix of where it comes from over the past few years:2
This is pretty unscientific, and Morgan Stanley’s ability and desire to do stuff with its repo funding differs from its ability and desire to do stuff with non-fee-earning client cash. Still you can see some trends there I guess? Read more »
For the last number of years, private equity firms and hedge funds slowly moved up the time at which they recruit that gotta-have-it talent, junior banking analysts, until it got to the point that they were making offers of employment to people who had graduated college and started working on Wall Street but months earlier, and still had a year and half of servitude left at their respective banks. While employers were used to having second years check out vis-à-vis doing any kind of productive work a couple months before moving on, they finally decided enough was enough. Feet were put down, expectations (that people would stop interviewing shortly after their first day on the job) communicated.
Knowing it’s one thing to smile, nod, and then tell Apollo HR that you look forward to seeing them on Monday and another to put your name on a contract promising you’ll do no such thing or risk getting canned, Morgan Stanley sought to get a little extra assurance its worker-bees would fall in line, requiring them last summer to put it in writing or beat it.
One might think that being terminated by Goldman Sachs for taking “inappropriately large proprietary futures positions in a firm trading account” and “violating investment-related statutes, regulations, rules or industry standards of conduct” might make it hard to get another job on Wall Street.
Not at all. It might make it hard, however, to get your deferred compensation after you plead guilty to fraud, re: said inappropriately large futures position. Read more »