Deconstructing the hiring noises at BAML and Morgan Stanley

It's all the over. The wild euphoria, the crazy expectation that 2009 was just the beginning and that FICC revenues would in time become larger than the US budget deficit, the notion that, 'if you hire them, it will come.' Over.

Revenues have not come. 2011 will not be a big hiring year. - At least not at Morgan Stanley or BAML, unless you work in mortgage foreclosures.

The non-hiring at Morgan Stanley

In case there were any doubt, James Gorman spelt it out:

"We're not aggressively hiring right now," he said.

And then:

"Obviously, if a specific opportunity comes up, we fill it. But we want to see some of the progress from those hires...So this is a year where we are now digesting the expenses and if things go as we planned them to go, we'll see good returns come off those."

Meaning: we spent too much in 2010, we need to make some more money before we can really hire anyone else.

(Nevertheless, Morgan Stanley HAS just picked up former Goldmanite Edward Glenn Hadden as its global head of rates trading, but Glenn appears to have been surfing the market since August and may have been in a similar position to Ian Slatter who, we suspect, could only join UBS once a 6 month non-compete had expired).

The non-hiring at BAML

There will not be big hiring at BAML either. Or at least, there will be big hiring, but it will

not be related to investment banking.

Last year, BAML hired 13,000 people to deal with mortgage foreclosures. Everywhere else, it said headcount was, 'flattish.'

This year, it says it might need hire even more foreclosure persons, but that in the investment bank it will be about, 'shifting the talent' and "adding new talent out of the business schools" and universities.

Meaning: We want to expand our investment bank in Asia and Latin America, but because we're spending so much money hiring people to deal with foreclosures, we can only do so if we get rid of investment bankers in the US (and possibly Europe) or shift them overseas. We are also eager to hire cheap junior talent wherever we can.

There was no mention whatsoever of Christian Meissner's proclamation that he fancies hiring 30 managing directors in investment banking in EMEA this year. It is therefore conceivable that Christian may have got a little carried away.