Lunchtime Links: Why banks' prop traders are useless next to the 'real men' at hedge funds

Last time we published something saying banks' prop traders might possibly be welcome at hedge funds, lots of you commented to proclaim that banking prop traders are herbivorous ruminants next to the carnivorous beasts of the hedge world.

Reuters confirms this to be so. It says banks' prop traders won't make it in hedge funds for the following reasons:

1) Funding costs at independent hedge funds are higher, making it harder to pursue a strategy demanding a lot of borrowed capital, such as fixed income arbitrage

2) Without a banking infrastructure prop traders will have to lower

themselves to things like marketing and managing accounting staff

3) Investors expect hedge funds to follow a single strategy; prop traders can pretty much do what they like (within reason)

4) Hedge funds need to keep cash on hand to deal with redemption requests, which can reduce returns.

Goldman Sachs considers three options for its prop unit. (WSJ)

JPMorgan has been trimming prop traders. (WSJ)

Blythe Masters assures JPMorgan commodities people that their bonuses will be FINE. (Observer)

After eliminating 400 people and cutting pay, MF Global is profitable again. (Financial Times)

One striking feature of this summer is that trading volumes in many asset classes have tumbled. (Financial Times)

BarCap weighs option of leaving the UK. (Guardian)

Standard Chartered might contemplate quitting London. (Guardian)

"This is the real stuff. It shows that if you squeeze Wall Street, like a balloon it will come out somewhere else, and we really are squeezing Wall Street. Their business models are changing." (NY Times)

Tabloids combusting with rage over still-existent bankers." (Alphaville)

Maybe you should be in Seoul? (Deutsche Bank)

Women don't actually do more work than men. (Reuters)

Disappointing 2010 analyst bonuses. (Mergers & Inquisitions)

Andrew Ross Sorkin is rich. (Observer)