Were Obama’s comments on Wall Street pay out of touch?
It’s been a while since President Obama took a public shot at Wall Street. Maybe he was just saving up for a good one.
The president, while lauding the positive effects of Dodd-Frank, went out of his way to criticize trading desks at big banks, which he feels incentivize risk through, among other things, their bonus structure.
He called profit incentives at big banks an “unfinished piece of business” for his administration, and said he will look to take “additional steps” to rein in risky trading behavior. He didn’t offer any suggestions as to what those steps would be.
“Right now, if you are in one of the big banks, the profit center is the trading desk, and you can generate a huge amount of bonuses by making some big bets,” he said on an American Public Media’s Marketplace radio show. If those bets go south, “everybody else is left holding the bag.
His comments are, quite frankly, a bit odd, if no other reason than their timing. Trading desks are being throttled by low volatility, new regulations and fallout from maneuvers of central banks.
Traders saw a huge pay cut last year and are on pace for an even less fruitful 2014. Layoffs are occurring across the board. And reform over how traders are paid has already happened, though maybe not to his standards.
Most traders aren’t sitting at their desks, smoking cigars and counting hundred dollar bills. They’re grinding it out, trying to stay employed.
Plus, with the ban on proprietary trading, banks are no longer placing singular bets that could cripple their institution or affect the overall economy.
Obama’s comments were “just weird,” said Alan Johnson, founder of Wall Street compensation consultancy Johnson Associates. I have to agree. His words would have been more befitting in years past. I felt like I was reading an old interview someone dragged up.
Office Habits That Drive Bankers Nuts (eFinancialCareers)
We asked several investment bankers what office habits of their colleagues have them gritting their teeth. We got plenty of unique responses. Anywhere from constant complaining, to general malaise, to even poor bathroom etiquette.
No Pay for Fish in a Barrel (eFinancialCareers)
If you’re working for Barclays’ investment bank and are hoping to join RBC’s expanding fixed income business, you might want to send your resume directly. The bank told recruiters they’ll receive no fees for Barclays’ staffers.
The U.S. added 288,000 jobs in June, pushing the unemployment rate from 6.3% to 6.1%, the lowest since 2008. Big news for the economy and bigger news for the Fed and its next move.
New Jersey’s Sun Bancorp plans to cut more than 240 jobs and dispose of its home mortgage and commercial specialty business units. That’s 38% of its workforce.
Why Are You Looking to Leave? (Business Insider)
It’s a question that’s asked in virtually every job interview. Why do you want to leave your current employer? Here’s some good advice on answering.
‘Thought Leader’ in Compliance (WSJ)
Barclays has launched a Compliance Career Academy aimed at better educating the bank’s 2,100 compliance staffers. Eventually, the academy will be open to employees at other banks. Honestly, Barclays may want to worry about themselves first.
Off By a Few Letters (Reuters)
A Goldman Sachs contractor mistakenly sent an email containing confidential client information to a random Gmail user. He used the wrong email suffix. Goldman email addresses end in ‘gs.com.’
Buzz Around the Office
Google has deleted an article about the ousting of former Merrill Lynch CEO Stan O’Neal. It was required to do so under a new European law that gives people “the right to be forgotten.” Or are we censoring the Internet?
Quote of the Day: “Trading is so far down from the peak, they’ve spent an endless amount of time and energy to reform trader pay -- to say that trader pay needs to be reformed is just bizarre.” – Alan Johnson
