Morning Coffee: The angst of the middle class banker with $1.2m in net worth. UBS's new weapon
Matthew Stewart is not a banker. He's a Princeton and Oxford-educated writer and philosopher who was once a management consultant, but he's written an article for the Atlantic which helps explain the lot of the banker, the management consultant and the lawyer mostly in the U.S., but also in the UK.
Stewart's exposition is on the 9.9%, or what he calls, 'The New American Aristocracy.' These are people with at least $1.2m in net worth (you'll need $2.4m to be in the median of the group). They are, "a well-behaved, flannel-suited crowd of lawyers, doctors, dentists, mid-level investment bankers, M.B.A.s with opaque job titles," says Stewart (who counts himself among them). "The kind of people you might invite to dinner." They're also "5Gs": people of good family, good health, good schools, good neighborhoods, and good jobs.
If you're part of this group, Stewart says you're not playing it fair. It's not entirely your fault, but however self-effacing, however high your grades and however, organically-nourished you are, he suggests the new cognitive aristocracy are pulling up the drawbridge for the remaining 90% - or more particularly for the offspring of the remaining 90%. If you have more than $1.2m in net worth, your children are disproportionately likely to mimic your success.
While Stewart doesn't exactly say so (being focused more strongly on the social instability of a situation which strongly replicates parental advantage), entry into the 9.9% and access to all its associated joys, implies a degree of stress. $1.2m in net wealth is not really enough to secure your position. And wealth alone is insufficient: you need the social group, the zip code, the high achieving children in the high achieving schools. You need to be thin and nourished on organic foods and eating the sorts of protein omelette popular with Goldman Sachs bankers five years ago.
If you don't have all this, your position in the 9.9% is precarious. Having told yourself that you got there in a meritocracy, you will only have yourself to blame if you plummet from the pedestal. At the same time, says Stewart, you will, "gaze upon the 0.1% with a mixture of awe, envy, and eagerness to obey." Fundamentally, Stewart is describing the lot of the aspirational vice president (VP) in an investment bank: if you can stay in the game, you (and your descendants) will seemingly be sorted forever (barring social upheaval). If you can't, you have a lot to lose. No wonder it's all rather stressful.
Separately, Financial News reports that UBS has opened a new unit called the, "Strategic Development Lab," and populated it with 80 people. Led by the co-head of fixed income trading, Chris Purves, it includes data scientists, technologists, machine learning experts and electronic trading specialists. Together they will ensure that UBS's fixed income trading business will be "fit for purpose" come 2025. Presumably those 80 will still be part of the 9.9% at that point in time.
Credit Suisse named electronic trading veteran Anthony Abenante to a new role heading global execution services within its equities unit. The new unit will bring high touch, program trading and electronic trading groups that were previously separate together. "How do we incorporate machine learning to help our sales traders be better at their job?" Abenante said. (Business Insider)
Before Deutsche Bank dispensed with John Cryan the New York Fed said the company’s units were still relying on dysfunctional technology and managers needed to do more to change the culture - urgently.(Bloomberg)
Deutsche Bank just named John O'Brien head of its institutional client group in the Americas. The group will distribute equities and fixed income products. (Business Insider)
Saudi Arabai's Prince Mohammed bin Salman turned $100k into $450m through a combination of stock, real estate, and private equity investments. (WSJ)
“KPMG’s audits of Carillion were not isolated failures, but symptomatic of a market which works for the Big Four firms but fails the wider economy. There are conflicts of interest at every turn.” (WSJ)
The Big Four are making plans for a forced break-up of their accounting and consulting businesses in the UK. (Financial Times)
Stanford MBAs are all about middle America. (PoetsandQuants)
We have LSD to thank for the computer mouse and "key components" of the internet. (Recode)
Photo: Jacob Ammentorp Lund/Getty