Lunchtime Links: Disturbing implications of Jefferies' results

Jefferies'third quarter results suggest banks have not been having an easy time. They also suggest pay will fall, there will be redundancies, and there won't be nearly so much hiring. Everywhere.

Richard Handler, Jefferies' CEO, said: "Trading volumes across the board were painfully slow during the months of June, July and August." Even worse, Jefferies' enthusiastic hiring hasn't really come to much. Making allowances for differing time periods (this year's results cover 9 months, last year's covered 8) revenues have only risen very slightly. All that's gone up is the compensation ratio, now at 59%, higher than all previous five quarters.

In the circumstances, Jefferies has had little option but to cut compensation, which is now 15% lower on an equivalent period basis than this time last year. Will it have to cut headcount too? Maybe not, but it surely won't be doing much more hiring.

If you are depressed by all this, there is - however - some good news. Financial News points out that some analysts are actually bullish about the third quarter. Morgan Stanley analysts think, 'Q3 has very tough market headwinds for trading.' And JPMorgan analysts think people are being excessively gloomy and that Q3 could be surprising, in a nice way.

Goldman Sachs has raised its head count by 7.5 percent since last September. (NY Times)

BofA has hired two more senior M&A bankers, one from Nomura. (Reuters)

Paul Marshall: Mr Cable is behaving like a "minister who wants to make his mark" rather than doing what was "important for the country". (Telegraph)

Citigroup's opening new brokerage businesses in Malaysia and Indonesia. (Financial Times)

A new Wall Street power look. (WSJ)

Jamie Dimon forced to halve the price of his 8 bedroom mansion. (WSJ)

Which language should you earn to break into investment banking? (MergersandInquisitions)

Why are the rich so rich? (The Atlantic)