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Morning Coffee: Nothing will ever compare to the buzz of working for Goldman Sachs. Families on $500k living paycheck to paycheck

If you leave Goldman Sachs you may never be truly fulfilled again. This is one conclusion to be drawn from Gary Cohn’s exit from Trump’s White House this week.

Ostensibly, Gary’s getaway was inspired by a difference of opinion. Trump wants to impose a 25% tariff on imported steel and a 10% tariff on imported aluminium. The president reportedly asked Cohn if he would support him in this and Cohn didn’t respond.  Axios says Cohn had been boasting to “buddies” on Wall Street and in the Hamptons that he was keeping the president on the track on trade; suddenly Trump was totally off-piste.

Cohn’s resignation appears to have been about more than just conscience though. Even before Trump began banging the drum for a trade war, Cohn seems to have been shaking his maracas for a more fulfilling role. "I’ve got to tell you. I’m working at like 20% of my capacity," Cohn’s said to have told Trump in February, adding that if Trump could put him in a role where he would use 80% or 90% of his ability, he'd stay. Otherwise, he would go.

It’s possible that Cohn’s lack of stimulation was because his government role, as White House chief economic advisor., simply wasn’t that interesting. Bloomberg notes that it was created by Bill Clinton to coordinate advice to the president from overlapping and sometimes competing economic agencies. No one stays in it much beyond two years anyway. Cohn’s exit after 13.5 months is therefore premature, but not by that much.

The more tempting conclusion, though, is that after the excitement of working his way to the top and subsequently spending 11 years as chief operating officer of Goldman Sachs, everything else seems a bit pedestrian – even working in close proximity with the president of the United States.

Either way, if Cohn were only using 20% of his brain with Trump, he will now be using none of it at all. This raises the question of what he'll do next. Dina Powell, another Goldmanite who left to join the Trump administration, has gone back to Goldman.  Will Cohn do the same? Lloyd Blankfein has said he's "disappointed" about Cohn's exit from government. He has reason to be. At a time when questions are being raised over the efficacy of Goldman's leadership, big Gary may suddenly be back in the game.

Separately, CNBC cites the case of some families with incomes of $500k a year who can barely make ends meet. After taxes, fixed costs, childcare and discretionary expenses, one only has $7,300 left each year to go towards other savings goals, investment accounts or retirement funds. Unnecessarily lavish housing is partly to blame; so too is "lifestyle inflation."


What a gig.

Got hundreds of millions tax free when he left $GS, got himself a tax cut on top of that, and is not sticking around to see the consequences of it all play out avoiding all future potential blame.

Game theory: Level expert

— Sven Henrich (@NorthmanTrader) March 7, 2018

Goldman is moving six investment bankers, mostly in DCM, from London to Frankfurt. Jens Hofmann, managing director of Goldman’s financing team, whose coverage focuses on Germany, Austria and Switzerland, has gone already. (Irish Independent) 

Goldman Sachs has informed members of its London-based derivatives and debt capital markets teams working on German accounts that their activities will be relocated to its base in Frankfurt and to make the necessary preparations to move to those offices by end-June. (Reuters) 

Goldman's decision to move some jobs to Frankfurt is unrelated to contingency planning around the UK's departure from Europe and were part of a broader strategy to place staff closer to clients in the region. (Financial News) 

The EU draft made clear that U.K. banks will be allowed to sell services in the EU “under host-state rules." The commission is expected to interpret the equivalence concept rather strictly, meaning rules in the U.K. will not be able to stray far from those in the EU after Brexit. (Bloomberg) 

Scott Duffy, head of physical and structured crude and products trading at Bank of America Merrill Lynch (BAML) has left the firm. (Reuters) 

Citadel has now cut staff by more than 30% at its Aptigon stock-picking unit. (Reuters) 

Millennium hired Sebastian Ridd, who had been head of program trading and cash trading in the US at Citigroup. With Armando Diaz leaving too, this marks a big change at the top of Citi. (Business Insider) 

Over 91% of decision-makers at U.S. venture capital firms are men. (Axios) 

J.P. Morgan wants a VP to work in its "robotics innovation office." (J.P. Morgan) 

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AUTHORSarah Butcher Global Editor
  • Gu
    9 March 2018

    The world has changed. New League Table for Trading
    Tier 1: BAML, JP Morgan
    Tier 1.5: Morgan Stanley, Goldman Sachs
    Tier 2: Citi, Barclays
    Tier 3: Credit Suisse, UBS, SocGen, BNP, Nomura
    Tier 4: Deutsche Bank and rest
    New kings on Wall Street belong to BAML and JP Morgan
    Kneel down!

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