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Morning Coffee: UBS Departure Leaves Fixed-Income Rivals Salivating

UBS’s exodus from investment banking may be good news for rival banks, which are sure to gain market share and may, eventually, be required to add talent to compete in a more consolidated industry.

Competitors like Barclays and Deutsche Bank, which each recently reported strong third quarter earnings backed by corporate and investment banking revenues, are well-positioned to take market share from UBS. The Swiss bank confirmed this week it will let go as many as 10,000 employees, mostly in its fixed-income trading unit, as it refocuses on the wealth management business.

“It’s positive for the banks that remain active as new business will be split among fewer players,” one industry vet told Bloomberg, adding that investment banking and lending margins should increase as consolidation deepens.

Sure, less competition means fewer jobs across the industry. But those that survive may find themselves in a position to grow their team.

Another Probe (WSJ)

U.S. Regulators are investigating whether Barclays violated anticorruption laws by soliciting funds from Middle Eastern investors during the onset of the financial crisis.

London Whale Sinks Boss (NY Times)

J.P. Morgan Chase has filed a lawsuit against the former boss of the trader allegedly responsible for the bank’s $6.2 billion trading loss this summer.

Tragedy (Bloomberg)

William Sword Jr., longtime managing director of Princeton, N.J. investment bank Wm Sword & Co., was killed on Monday after being struck by a tree damaged by Hurricane Sandy. He was 61. Jack Miller, the 39-year-old managing director in fixed income at Brean Capital, was killed in a similar accident.

Braving the Conditions (Bloomberg)

The markets may have been closed, but some big names on Wall Street worked through the chaos of Hurricane Sandy to stay ahead of the curve.

Buffet’s Big Bet (Business Insider)

Need more proof of the U.S. housing market turnaround? Warren Buffet is joining forces with Brookfield Asset Management to expand Berkshire’s brokerage business.

BOE’s Short List (WSJ)

The list for the next Bank of England governor is reportedly down to four candidates, led by current Deputy Gov. Paul Tucker, a 30-year veteran of the bank.

Without Bad Luck…(Reuters)

Knight Capital, which lost $440 million this year due to a one-time trading glitch, suffered an electrical outage on Thursday and was forced to shut down trading.

Buzz Around the Office

King’s Ransom (Radio Iowa)

Iowa Rep. Steve King offered up a bit of advice to victims of Hurricane Sandy, who will eventually receive federal aid: Don’t spend it all on “Gucci bags and massage parlors” like you did last time. Yikes.

List of the Day: Cell Batteries

Here are a few battery-saving tips for the millions without power who need to keep their cell phone charged to stay connected.

  1. Turn off push notifications, WiFi and Bluetooth.
  2. Turn down the brightness on your screen.
  3. Send texts rather than making calls.

(Source: Quartz)


AUTHORBeecher Tuttle US Editor

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