In 10,000 words:

A bank that really takes pleasure in proudly advertising any award it gets, howsoever ludicrous the honour, is HSBC. One honour it’d loath to advertise, but unarguably deserves the most is the bank that most royally screws its employees. It is no secret that HSBC’s senior management gets paid ridiculous amount of compensation. What however is not well known is how shoddily the junior and middle level staff is paid. One rather remarkable fact is that on parameters like average employee salary and percentage of profits paid as staff compensation, HSBC is in line with the best paying investment banks. However, the salaries of its junior-middle level staff are right there at the bottom of the industry. Their loss is “senior management’s” gain, the bureaucrats who spend most of their time strategising and talking vision.

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“Don’t go expecting a movie that will give you some great intellectual or emotional insights into the Wall Street crisis. Sure, there are the obligatory “life on the trading floor” scenes and quasi-faithful recreations of arguments between Treasury and Wall Street at the oak-paneled New York Fed. And there are lots of cameos of CNBC anchors and Nouriel Roubini (as “Dr. Hashimi”) to give the movie “authenticity.” But the authenticity is as phony as Bernie Madoff’s investment returns. How many Fordham-educated prop traders with the last name “Moore” speak fluent Mandarin?” [WSJ via BI]

An email apparently going around today.

“We are Wall Street. It’s our job to make money. Whether it’s a commodity, stock, bond, or some hypothetical piece of fake paper, it doesn’t matter. We would trade baseball cards if it were profitable. I didn’t hear America complaining when the market was roaring to 14,000 and everyone’s 401k doubled every 3 years. Just like gambling, its not a problem until you lose. I’ve never heard of anyone going to Gamblers Anonymous because they won too much in Vegas.

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  • 22 Jan 2010 at 10:58 AM

Volcker Rule: WTF?

paul-volcker.jpgNow, you can think what you want about the Obama proposals, but there is something I find more than strange. What is happening about what caused the crisis in the first place and why is there no mention of it anywhere anymore in none on of the proposals?
Maybe I missed something here, and maybe someone can help me understand, but as far as I can remember, what was at the root of the problem, were OTC derivatives and securitized products based on bad loans. Oh wait, we did have a program to solve that and relieve banks from those “toxic assets” off their balance sheets: the Troubled Asset Relief Program, our beloved TARP. We kinda strayed away from its original intent, no?

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From the mailbag:

Jon Ezrow, who was head of HY capital markets is leaving GoldenTree this week. This marks another of many high profile resignations at the firm in the last 24 months and calls into question the leadership of the firm. Since 2007, many of the top analysts and PMs have resigned from the firm or left to pursue other opportunities (AKA quit).
– Tom Shandell (Institutional Investor Magazine All-Star, ranked number one US gaming analyst)
– David Allen (Institutional Investor All-Star, ranked number one US Media Analyst)
– Andrew Susser (Institutional Investor All-Star, ranked number one lodging analyst)
– Oliver Wriedt (Head of Marketing)
– Wilfred Finnegan (Head of Sourcing)
– Larry McCarthy (Head of risk management, former Lehman Brothers star)
– Eduardo Cabral (now at Goldman)
– Raul Ramirez (left for Avenue)
Additionally over 10 other analysts have left, making the turnover one of the highest for any hedge fund. Combined with Steve Tananbaum’s poor performance in 2008 due to his strategy of going long the loan market with leverage in the Spring of 2008 (See his Barron’s interview from May 2008 called: Leveraged Loans: Ready for Takeoff!”) calls into question whether anyone will stick around since he is known to be one of the worst managers on the street. His flagship credit fund was down 70% and investors have been blocked from taking out money.

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