Morning Coffee: The sorry story of the 36 year-old trader and the most enormous bonus. Threat to Barclays' investment bank
There are bonuses, and there are bonuses. Any risk takers at Deutsche Bank who are feeling happy with their $1.1m bonuses for 2017 might feel a little less so when they consider that 10 years ago, a 36 year-old trader at the bank received a bonus of £90m ($140m) for a single year.
That trader was Christian Bittar, the French-born favourite of then Deutsche Bank CEO Anshu Jain. Bittar didn't get his big bonus for nothing. He was one of Deutsche's most profitable rates traders ever, and was rumoured to have made nearly €2bn in audited profits for Deutsche Bank over a five year period, partly by betting that the cost of borrowing in euros for three and six months would rise more quickly than one-month rates, something that paid-off amply when Lehman Brothers collapsed.
As with many good traders, Bittar was parsimonious, fussy about food, and relentlessly dissatisfied with his giant paychecks. Bloomberg reports that neither his car nor his clothes were flashy, that he alternated between eating only eggs and guzzling junk food and Diet Cokes, and that he kept lobbying DB for ever-higher bonuses by threatening to leave for a hedge fund.
Bittar has now crashed Icarus-like down to earth. After being fired by DB in 2011, losing $50m in unvested stock and being fined £10m by the FCA, he confessed earlier this month to rigging Euribor and is now in police custody awaiting sentencing when a related trial ends this summer. Sometimes it's better to be slow and steady than fast and flashy and fueled by nothing but boiled eggs.
Separately, a dark rider has drawn up alongside Barclays. It is the trim figure of Edward Bramson, an activist investor who reportedly thinks he can double Barclays' stock price by effecting a "turnaround" and "pushing for change." What this will involve exactly is not clear, but Bramson has a history of being both aggressive and successful and Barclays' under-performing investment bank is a big reason for its stock trading at only 68% of book value.
Meanwhile:
A reminder: Barclays' investment bank consumes two thirds of its capital and has made sub-par returns for many years. (Evening Standard)
Poor Gary Cohn: Trump said he could be director of the CIA and then appointed Gina Haspel instead. (Business Insider)
Jörg Kukies, the former co-chief executive officer of Goldman Sachs for Germany and Austria at Goldman Sachs has taken a huge salary cut and joined the German finance ministry. This kind of thing almost never happens in Germany. (Handelsblatt)
Citi hired Michela Ferrulli from BAML as its head of equities sales and sales trading for the Central and Eastern Europe, Middle East, and Asia. (Business Insider)
James Gorman the arch-strategist: Ssnce he took over as chief executive in 2010, Morgan Stanley’s share price has outpaced Goldman’s by more than a third. (Financial News)
Jimmy Cayne is still playing bridge. (Wall Street Journal)
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