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Morning Coffee: Ex-Citi, Barclays' director's optimal career plan after avoiding a "massive" heart attack. Goldman Sachs not expected to cut bonuses enough in a crisis

With heart problems among overworking junior bankers in focus recently, it's worth bearing in mind that most heart attacks still take place in later life. When he had his near heart attack, Tom Rayner - an equity researcher who covers banking stocks and who's spent his two decade career working for Citi, Barclays, Exane and elsewhere in London, was 45 years old. He was working for Exane as an executive director covering UK banks.

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Writing on his blog, Rayner says he "narrowly avoided having a massive heart attack and instead received emergency angioplasty to unblock a coronary artery, followed by the insertion of two stents." Nine years later, aged 54, he says the experience prompted some heavy reflections on his working life. 

Ever the economics graduate, Rayner has produced the following chart on utility maximization. Beyond the age of 55, Rayner says it's all downhill for health. If you want to do particular things in life, it's therefore good to do them before or soon after this point. 

Instead, Rayner says there's a temptation to keep going as long as possible. "I remember sitting in Canary Wharf one morning, having once again got up at 5.15am to be at my desk for 7am, pondering why it was necessary for all of us to be in the office at this time every day," he muses, adding that he's still stirred by the sight of former colleagues moving into big jobs.

Rayner is no longer working in banking. His most recent job at Numis came to a sorry end when the brokerage house was acquired by Deutsche Bank last year, and since then no one has responded to his applications. Even when he applies for roles paying less money than he'd like, Rayner says he's ghosted: "Often not even a rejection email, just silence."

He admits this is no bad thing. Like Mary Callahan Erdoes at JPMorgan, Rayner is all for working hard when you're young, but beyond the age of 40 he thinks you should be taking things a bit easier. Aged 45, he went to a four-day week after his heart attack. This dropped to a three-day week at 48. He's now on a no-day week aged 54. The chart suggests he needs to find two days somewhere. 

Not everyone will be able to achieve this. Rayner acknowledges that he has sufficient financial endowments to opt out. He also says that while he won't be working as an equity analyst, he'll still be "involved in managing my family’s business and property interests." His non-working life probably won't involve too many privations. 

Rayner's target audience is senior people in banking who are still on the hamster wheel despite being in a similar position. If they took a long look at his chart, they too might be encouraged to do less work. "We should be careful not to sacrifice too much today simply to fund tomorrow. Especially when many of these sacrifices are both precious and ephemeral, such as time spent with a young family or the vigour of your youth," opines Rayner. "It is easy to see why people in my position decide to throw themselves back into high-powered jobs, if only to prove to themselves and others that they have still got what it takes."

Source: Tom Rayner 

Separately, Goldman Sachs didn't fare well in last month's stress tests and the Financial Times is suggesting why. 

Although Goldman passed the stress test, the FT notes that it predicted Goldman would lose more than $40bn in a severe economic downturn, or nearly half the capital that regulators required it to have to cover losses last year. This was a worse result than rival banks and means that Goldman may be required to set aside an additional $6bn. 

The FT notes that Goldman's poor performance wasn't down to insufficient capital but to the fact that the Fed thinks that in the event of a downturn, Goldman won't be able to cut costs much. Goldman, however, has reportedly been arguing that it would trim bonuses and "other costs" (headcount?) if things get bad. The Fed has its doubts. 

Meanwhile...

Keir Starmer interviewed badly. "He lacked confidence and dress sense and looked about 14. But he turned out, as could be predicted from his written work, to be brilliant — my new secret weapon.” (Financial Times) 

Rishi Sunak will not be joining Blackstone yet. (New York Times) 

Investec is cutting 10 jobs in London. (Financial News) 

The second half of the year may not be great for IPOs. “There is a more limited time window in the second half of the year, with the period between September and mid-December affected by the US election, so activity may be more muted than the first half. We are still in a thawing period from what was a pretty long freeze in IPO land.” (Bloomberg) 

Lisbon reintroduced ex-pat tax breaks, just not for wealthy retired people this time. (Financial Times) 

Bobby Jain hired Ali Rauf from Squarepoint. (Financial News) 

More than 30 publicly listed companies based in mainland China have dropped PwC as their auditor and people there are looking for new jobs. Some senior partners could have non-compete clauses in their contracts that would limit what they can do within a year of leaving PwC. (Bloomberg) 

Some industry executives have questioned whether private fund managers will continue to give information to Preqin given BlackRock manages nearly $250bn of alternative funds of its own. (Financial Times) 

Banks may have increased tier one capital from 5% in 2008 to 10-15% now, but they're still exposed in a crisis.  The rise of private credit and the growing popularity of derivatives through which banks sell credit risk to hedge funds imply that risk has been transferred out of the system, and it could come back to bite. (Economist) 

A recently published study of American prize winners finds that for every $100,000 of extra wealth, the chances that the winner is employed falls by just under 4 percentage points. Poorer people are more likely to quit their jobs, while richer people are more likely to stay in work but reduce their hours. (Financial Times) 

A 27 year-old Tik-Tok content creator spending the summer in the Hamptons with her banking partner is surprised at the price of things. “I was pretty shocked when I spent $20 on two tomatoes. I was even more shocked to find out that they weren’t even locally grown.” (WSJ) 

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AUTHORSarah Butcher Global Editor

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