Morning Coffee: Do you want to work in Hong Kong now? Bill Gross's last straw
Is Hong Kong as appealing a destination for expat bankers at it used to be? Finance staff arriving for work in Hong Kong today came face to face with pro-democracy protesters after a weekend of rioting. The protesters spent the weekend blockading roads. Police responded with tear gas and pepper spray. On Sunday, the ground floor entrance to the Cheung Kong Centre - where Goldman Sachs' Hong Kong office is based, was reportedly barricaded off.
Some finance firms have already decided to spare staff the hassle of coming in. Reuters reports that Deloitte has told its people in Hong Kong to be 'cautious and avoid large gatherings', adding that they might want to work from home. EY and Citic Securities have suggested their staff might want to work remotely too. DBS (Development Bank of Singapore) has gone the whole hog and suspended its business Hong Kong's Admiralty district because of the protests.
Reuters notes that bankers working for Credit Suisse, Deutsche Bank and Morgan Stanley in Hong Kong, should have nothing to worry about in the unrest - their offices are based across the harbour from the financial district, away from the turbulence. Goldman Sachs, however, is in the protests' epicentre. Citigroup, JPMorgan and UBS are close by too. It's not clear whether their staff will be compelled to come in, but a spokeswoman for UBS told Reuters the bank expects, 'business as usual'. In June, the Big Four accountancy firms took out advertisements in local papers warning that large scale protests could drive investors and foreign companies out of the territory if they got out of hand.
Separately, Bill Gross's final act of bad behaviour at Pimco has been identified by the Wall Street Journal. Gross, who had already been cautioned and commanded to moderate his outbursts, reportedly sent a 10 point email to other top Pimco Executives a few weeks ago. In this missive, Gross is said to have blamed specific other executives for the problems at the firm. This was the last straw, says the Journal, claiming that 'one by one' Gross's senior colleagues went into the chief executive's office with an ultimatum. - 'Either Bill goes or I go.' Needless to say, Gross has gone. But he did so in typically trenchant style. Prior to his departure, Gross reportedly said: "I've made you all rich…See how you do without me."
Bill Gross was wrong footed by the British government. He bet that UK bond yields would rise after the financial crisis, but they fell to an all time low as the government bought its own debt. (Financial Times)
Following concerns over conflicts of interest, Goldman Sachs' investment bankers are no longer allowed to buy individual stocks and bonds. This could be an issue for bankers who feel strongly about a particular security, but they can still purchase fund products and we assume that senior Goldman bankers will still have the opportunity to invest in the firm's own funds, so they'll survive. (Bloomberg)
Leda Braga, one of the most powerful women in hedge funds, is leaving BlueCrest and taking taking almost a third of its assets in a 'spin-off' focused on systemic computer-based investing. Braga joined BlueCrest in 2001 from JPMorgan, where she was a quantitative analyst in the derivatives research group. Now that she's gone, BlueCrest will focus on discretionary investments only. (Bloomberg)
Braga says systemic funds will benefit from pressure to drive hedge fund fees lower. - They're cheaper to run. (Financial Times)
FX traders fingered by the Financial Conduct Authority (FCA) in its investigation over price fixing have nothing to fear. - They won't be fined on an individual basis (unlike Libor traders). (Bloomberg)
The European Union has removed oversight of bankers' pay from the European Commission's portfolio just as Jonathan Hill, Britain's candidate, is appointed as the EU's financial services commissioner. But the British should not take it personally. (Euractiv)
Neil Woodford discusses what makes him such a great investor. (BBC - audio)
EY employs 190,000 people globally, but hired 60,000 last year - suggesting staff turnover is pretty high. (EY)
There are some good parties at KPMG in London. (Evening Standard)
How a positive password can radically change your life. (Brazen Careerist)