Morning Coffee: Deutsche Bank confirms these jobs are the most precarious. The 1980s Goldman Sachs hustle
If you work for an investment bank and are concerned about the security of your spot, you might want to ask yourself a few yes-no questions: Do you cover the cost of your seat? Could a machine do your job more cheaply? Could a cheap person do your job more cheaply? Could your role be eliminated by fusing it with another similar one in a different division and getting someone else to do twice the work?
If the answer to any of these questions is yes, you might want to start paying down your mortgage. If the answer to the final question is yes, you might want to make the necessary psychological adaptions for the discovery that your services are no longer required. You are deep in the danger zone.
Following the ongoing fusion of the back offices to the Global Banking and Commercial Banking businesses at HSBC and the 'simplification of the corporate structure' at Nomura, Deutsche Bank said yesterday that there is more juice to squeeze and the juice will come from, "interlocking more closely the back office of the corporate bank and the investment bank.”
Coming from Deutsche Bank CFO James Von Moltke, who last year spoke about a "glide path" of "something like a thousand heads a quarter" when it came to layoffs, eliminating more jobs through "interlocking" is a pleasantly mechanistic euphemism. It's kind of surprising that DB needs to cut jobs relating to its investment bank at all given that it achieved a cost income ratio of just 52% in the first quarter. The corporate bank is looking less healthy though - costs ate up 84% of revenues there, so the interlocking could come down to cutting support jobs in that unit most of all. Either way, it's a reminder that even after a strong quarter banks are on the lookout for duplication across divisions.
Separately, the revelation that cold-calling is being replaced by the sending of cold messages on LinkedIn at Merrill Lynch, has prompted some nostalgia for the old days before the internet, when brokers were the main way for the public to get financial information and smiling and dialing was a valuable part of the financial ecosystem. Blogger the Reformed Broker, who spent 10 years cold calling, says it was "terrible, thankless, soul-crushing work" undertaken by people with "nearly unlimited chutzpah and absolutely no fear of rejection." Because there was no internet, he says Goldman Sachs and others would teach young recruits in the 1980s to go to local libraries and scour back editions of local newspapers for the names of rich people in towns across Upstate New York, so they could sell to them. Because there was no LinkedIn, he says young brokers who gained access to a Manhattan office for a single meeting would roam its corridors knocking on doors trying to build extra connections...
Singapore is getting snarled up with Chinese, Malaysian and Indian billionaires. Merely wealthy Singaporeans are just spending money on food. “Eating is the new travel—I think that’s why restaurants are doing so well." (Bloomberg)
Singapore bank DBS would like to let it be known that it has twice as many engineers as bankers. “We are now increasingly thinking of ourselves as a technology company offering financial services, rather than a traditional bank. The fact that we have twice as more engineers than bankers is perhaps a testimony to the shift in the nature of the company that we are.” (Coindesk)
Zopa, a fintech firm, has thrown down the gauntlet to banks demanding people return to the office and says people can work where they want in their home country for the rest of the year, including spending 90 days abroad. (Financial News)
Goldman Sachs lent over $5bn to SoftBank. (Bloomberg)
After offering Peloton bikes and exercise equipment, Jefferies cut the length of its analyst programme from three years to two. (Financial News)
Amy Cooper, the white woman who called 911 over an encounter with a black man while walking her dog in Central Park, has filed a racial and gender discrimination case against her employer, Franklin Templeton. It says she was "characterized as a privileged white female 'Karen'" because of the company's statements, and that the black man, Christian Cooper, was "an overzealous birdwatcher engaged in Central Park's ongoing feud between birdwatchers and dog owners." (ABC News)
The rush of being a retail investor. It feels great. It feels like us against them. Like retail against Wall Street.”... "God told me to put money into Hertz. I know it sounds crazy.” (WSJ)
Upstart hedge fund Engine 1 successfully persuaded ExxonMobil shareholders to vote two of its four candidates on to the board where they can push for a carbon reduction strategy. (Guardian)
Jamie Dimon doesn't like Biden's plan to tax households earning over $400k. He does like the idea of a carbon tax. (Bloomberg)
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