Morning Coffee: Q1 wasn't just bad for banks, it was disastrous. Hedge funds and PE bashed in British budget

Suddenly, a lot of banks are making job cuts. Last week, Bank of America Merrill Lynch (BAML) cut 150 people from its global markets arm. This week, Citi is said to be readying cuts across its investment bank and UBS is said to be culling 300 of its 5,000 people in Europe. Nomura is alleged to be preparing some nasty cuts in equities.

There's a reason for the robustness with which banks are reducing personnel: the first quarter. The first three months of 2016 have not been tough, they have been cataclysmic.

Analysts at UBS have called it. They reportedly think that first quarter trading revenues across the industry were at their lowest level for, "at least seven years."  In other words, only 2009 - the year directly after the financial crisis, started this badly. At Morgan Stanley, first quarter trading revenues - which usually enjoy a seasonal high - are on a par with revenues in the fourth quarter, when there is usually a seasonal low. Most banks were primed to expect a recovery this year. For the moment, they could not have been more wrong.

Separately, yesterday's British budget helped do away with some of the reasons for working in the hedge fund and private equity industries. As Financial News notes, both areas of the buy-side have had some of their tax advantages removed. Carried interest payments at private equity funds will continue to be taxed as capital gains at 28% and will not benefit from the reduction in capital gains tax to 20% for everyone else (making carried interest a distinct category which can be taxed more heavily in future). And, if hedge funds sell assets they've held for less than three years, the proceeds will now be taxed as income rather than as capital gains. Might as well stay in a bank.

Meanwhile:

Bond traders are now leaving Morgan Stanley of their own accords. (Bloomberg) 

The new German-British stock exchange would employ 10,000 people. (WSJ) 

"Life after FX? I’ve heard of people who just end up driving taxis." (Euromoney)

How it is when you're deputy CEO at Bridgewater: 'About three years ago, he supervised subordinates stripping off articles of clothing and setting them on fire during a team-building exercise at an official company retreat.' (WSJ) 

Never, ever agree to work a four day week. (Financial Times) 

From the Tom Hayes trial: ""I used to turn up for work with holes in my clothes looking like a tramp,"  (Bloomberg)

Pay your nanny $75k. (DNA info)

Are there "too many Duke graduates" at Citi? (WSJ)

66 year-old ex-mathematics professor turned quant pulls all-nighters in the desert. (Bloomberg)

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