Morning Coffee: Goldman Sachs' covert Brexit confession. This is what Wall Street sexism really looks like
You've always know that Goldman Sachs was up to something with regards to Brexit. As one of the most vehement pro-remainers,it was sort of bound to be. There were those rumours about the 'firm' being willing to let entire floors of its up-and-coming office in London's Farringdon lie empty if Brexit came to pass. There was some vague talk of spreadsheets containing the names of the people likely to be exported out of the City. And there was the official line from Lloyd Blankfein to the extent that Goldman would adapt if necessary, but that necessity was not yet upon it.
With Article 50 not even triggered yet, the moment for mandatory adaptation has still not arrived but Goldman Sachs is already making noises in dark corners about what happens when it does. The Financial Times reports that the firm made reference to the impact of Brexit in a regulatory filing from its U.S. business on Thursday. There, it reportedly stressed that the "timing and outcome" of Brexit negotiations are "both highly uncertain," and said explicitly that Brexit, "may adversely affect the manner in which we operate certain of our businesses in the European Union and could require us to restructure certain of our operations.” So, now you know - if you didn't already.
Separately, if you thought sexism on Wall Street was the sort of thing women exaggerate for the sake of big discrimination payouts, you were not paying attention. In an article for Xojane, Sallie Krawcheck, former equity analyst and COO of the wealth management division of Bank of America (turned CEO of a women's investment firm, Ellevest) spells out exactly what sexism in finance is like. "How do you react when your boss (actually, your boss’s boss’s boss) is caught in a sex act with a woman in his office — by another woman he’s having an affair with — just a handful of yards from your desk?," she asks bluntly, adding that this - and worse - happened to her during her banking career. Krawcheck also makes it sound like equity research is a good option for diligent women: ultimately you're judged on the success of your research calls, not the opinion of your (male) boss.
Xavier Rolet, head of the London Stock Exchange, says the EU can't force euro-denominated clearing out of London. "That would require an [EU] treaty change. An EU treaty change is not an easy thing . . . so that is not impossible but at this time, for the moment, there is no immediate threat from that standpoint.” (Financial Times)
Jeremy Browne, previously a minister of state in the Foreign and Commonwealth Office and now the special representative for the City to the EU, says that by demanding controls on European immigration, the UK will inevitably lock itself out of the single market: "The City still thinks that it will be such a soft version of Brexit. I am not at all sure that the Europeans will be willing to deliver something that easy and palatable to us." (Financial News)
The best Brexit option for the City of London is to start out with Norwegian-style European Economic Area access with free movement of people and to move to a negotiated free trade agreement over time (10 years). (Open Europe)
The City is pinning its Brexit negotiation hopes upon Shriti Vadera, a sometimes rude former business minister and banker: "She is a force of nature." (Reuters)
Goldman Sachs has taken five years to cut its non-Volcker compliant investments by 60%. It now has less than a year to cut the remaining 40% (it's not going to happen). (WSJ)
Salespeople are safe after all: Institutions trade about 20% of investment-grade corporate debt electronically, according to a new survey from Greenwich Associates. And 83% of them have the capability to trade electronically, which means that most of the time, those institutions are choosing the phone. (Alphaville)
J.P. Morgan just struck a deal with automated trading firm Virtue financial to provide electronic fixed income trading in the dealer-to-dealer market for US treasuries for the next three years. (Reuters)
In the war room of LME Clear, numbers turn from green to amber as the amount of risk taken by a client account climbs above half of the collateral held. The field turns red when it breaches 80%. At 100%, it turns purple. That’s when humans take over. (Bloomberg)
Point72 just hired Olivier De Bellefonds from a New York quant hedge fund for its London office. (Financial News)
Do not believe CEOs bearing bad news if you're an equity research analyst. - They just want you to cut your projections so that they can be seen to beat them. (WSJ)
"I hear constantly from traders who say that the daily work of buying and selling bonds or stocks, and thus the amount of money they can take home, is constrained by the capital limits." (NY Times)
Goldman Sachs MD accused of stealing government data to woo clients faces a personal fine of $338k. (Bloomberg)
The head of Rothschild's North American business is stepping down. It had to hire two people to replace him. (Reuters)
When you partake of team games at Goldman Sachs: "I didn’t get a chance to stretch. I don’t want to make excuses, but Goldman doesn’t let us outside all that often. Look at that analyst -- she’s white as a sheet." (Bloomberg)
When you and your cousin are elected as directors of the family bank. (FiNews)