Information Arbitrage is back with the second installment of his fantastic Wall Street Series. (If you missed the first installment, click here.) This time the focus is on the conflict between investment banking and sales & trading, and on the conflict between the sales guys and the traders.
So is there some way for a Wall Street firm to put together these groups to eliminate the legendary conflicts? IA answers: “NO. It's Us versus Them. It always has been and it always will be, given the structure of the Street and the chemical differences among the species in question.” And that’s just the sort of negativity we love.
Here’s his description of the world view of sales & trading guys:
We're smart. We're creative. We know how to monetize an asset. Bankers are stupid and weak, bending over backwards to kiss the client's a** while jamming us. Screw them. We deserve the big cash. Sales & Trading says things like, "You got that deal because the client wanted to expand the syndicate to diversify financing risk" or "The Equity Trading desk took on a load of principal risk to get that block trade done for your client" or "The creativity of the Tax Structuring team was the catalyst for getting that buy-side assignment that saved a client $20 million on a cross-border acquisition." In essence, Bankers are overpriced pieces of sh*t in suits that benefit from the creativity, capital and risk-taking skill of those in S&T. And it gets really complicated when you have client-type guys in Sales & Trading who, in fact, have better relationships with the clients than the Bankers themselves. This really, really pisses Bankers off. This is just too in-your-face for these guys to tolerate. And it just turns up the volume on the systematic conflict that already exists.
The Wall Street Series Part II: Investment Banking vs. Sales & Trading - Can't We Be Friends? [Information Arbitrage]