Morning Coffee: Goldman Sachs exec plays Trump card in crypto denial. Deutsche Bank’s favorite clients

Goldman Sachs Chief Financial Officer Martin Chavez dropped one of President Trump’s favorite phrases on Thursday, calling a report that the bank is ditching plans to open a crypto trading desk “fake news.” However, in his denial of the reporting, Chavez then appeared to confirm that the bank in fact does not have any near-term plans of setting up a trading desk to make markets in digital currencies. It’s all very confusing.

"I never thought I would hear myself use this term but I really have to describe that news as fake news," Chavez said in response to Wednesday’s Business Insider report, according to CNBC. He noted that Goldman’s initial conversations over potential cryptocurrency offerings, first reported back in December, were exploratory and would evolve over time. "Maybe someone who was thinking about our activities here got very excited that we would be making markets as principal and physical bitcoin, and as they got into it they realized part of the evolution but it’s not here yet,” he said.

Chavez is therefore confirming the crux of Wednesday’s report – that Goldman has no immediate plans to trade cryptocurrencies – and is rather taking issue with the idea that bank ever set ink to any physical trading plans in the first place. “The CFO of Goldman Sachs just called a story 'fake news' while also confirming the contents of said story. Weird,” Matt Turner, Business Insider’s executive editor, tweeted on Thursday night.

The issue, it seems, goes all the way back to late last year, when Bloomberg reported that Goldman is “setting up a trading desk to make markets in digital currencies,” and was assembling a team in New York. With that narrative set, anything other than the launch of a trading desk would appear like a deviation in strategy, though in fairness the bank didn’t confirm Bloomberg’s initial report, noting at the time that it was “exploring how best to serve” client interests in digital currencies.

At the end of the day, Goldman Sachs isn’t playing market maker in crypto – at least not in the near-term. Instead, the bank is exploring over-the-counter bitcoin derivatives Chavez referred to as “non-deliverable forwards,” according to CNBC, which said Goldman has been clearing bitcoin-linked futures contracts since May. Chavez may have been inclined to clear the air on Goldman’s cryptocurrency strategy as the price of bitcoin and other cryptocurrencies fell off a cliff on Thursday following the Business Insider report. Historically, Goldman remains rather mum on media reports.

Elsewhere, Deutsche Bank is letting it be known which clients it loves best. The German lender, which has taken a knife to its U.S. prime brokerage unit, invited a select group of hedge fund managers and other institutional investors to a Thursday meeting aimed at reassuring big clients that it’s pared down unit can still deliver all the required brokerage services, according to Bloomberg. Deutsche Bank is reportedly severing ties with less valuable clients to concentrate its efforts more on high-revenue generating funds. The bank trotted out all its big-name U.S. executives for the meeting. No attendees were named, though Renaissance Technologies, Och-Ziff Capital Management and AQR Capital Management are among Deutsche’s biggest clients.

Meanwhile:

Amid speculation, Credit Suisse Chief Executive Tidjane Thiam said he will not be leaving his post to run for president in his native Ivory Coast. “My task is not yet completed and I have every intention of continuing,” he said. (Bloomberg)

Citigroup is combining its corporate and investment bank (CIB) with its capital markets origination business under the leadership of Manolo Falco, formerly head of corporate and investment banking in Europe. The reshaped global investment bank has an acronym that is bound to confuse more than few people: BCMA. (Financial News)

The Wall Street Journal just published a profile on Kathleen McCarthy, Blackstone’s co-head of real estate. The former Goldman Sachs exec has turned into a fundraising superstar. She once turned some heads of investors by setting a specific day when fundraising needed to be completed: her due date. The real-estate fund raised a record $14.5 billion, closing one day after she gave birth to her daughter. (WSJ)

Berea College, the University of North Carolina at Chapel Hill and the University of Washington, Seattle offer the best bang for the buck when it comes to the value of undergraduate degrees, according to a new study. Harvard University, which has earmarked $200 million in financial aid this year and doesn’t expect contributions from parents earning less than $65k annually, finished in 6th. (WSJ)

An unnamed U.K. hedge fund manager carried on an extramarital affair that included role play at his office, where the woman dressed as a sexy secretary for a “job interview.” When the affair went south, she allegedly repeatedly contacted the man’s wife and eventually showed up to confront him at his office. (The Sun)

The Justice Department has launched an investigation into Wells Fargo’s wholesale unit following a Wall Street Journal report that indicated some employees had been altering documents of corporate customers without their knowledge. Officials are reportedly looking into whether pressure from management could be partially to blame for some of the bank’s recent scandals. (WSJ)

J.P. Morgan CEO Jamie Dimon said that any law-abiding graduate from a U.S. university should be given a green card, and that President Trump told him behind closed doors that he agrees. (Business Insider)

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