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GUEST COMMENT: I left banking because it was like working on a high end supermarket checkout; now am I am unsure what to do

“C.B.R EMERGENCY RATE HIKE 300BPS.” The big red letters flashed over my Reuters screen as I pondered the consequences for my book. Wasn’t I long in both the 1mth and 3mth buckets? A quick check of my risk confirmed that not only was I long the 1mth and 3mth buckets, but that I was long Russian rates in every maturity up to and including the two year point. I had just lost the best part of USD 1.5 million.

Except that I hadn’t. Courtesy of a contract I had signed just 24 hours hence, I was no longer an employee of this fine establishment, meaning that the rightful owner of said losses was now the bank and not my compensation package. Returning to my Wikipedia article on the Falklands war I ruminated over that old trading dictum, what was it they said? Ah yes: “Better lucky than good.”

In 2009, I had been trading fixed income derivatives for the best part of 5 years, but what had started off as an interesting job with a myriad of new things to learn was now pedestrian and routine. Everyday I would price up the same interest rate derivatives for the same thankless hedge funds, like some kind of high-end supermarket checkout worker, but subject to the ‘winner’s curse’ that came with executing a trade. Worse still, the hours had become longer, bonuses were down and stress was up; there was every likelihood that this wasn’t some ephemeral aberration, but rather the convulsions that signified a fundamental change in the industry was coming.

It would however be disingenuous of me to claim that the impetus for my leaving lay solely in the job itself. For I had also changed: dramatically. I wanted to see more of the world than the 10-day breaks (any longer would be frowned upon) would afford me, I wanted to learn another language, to spend more time on my hobbies and possibly turn them into a career. I couldn’t keep rolling over these personal ambitions into that box labelled “things to do when we retire” (even if it is 40), in fact, the very nature of my ambitions and interests meant they could only be fulfilled in my twenties.

Very few people attain their ‘dream’ job after leaving university, and even fewer find that it meets their expectations. I was lucky in achieving the former, but back in 2009 it seemed the latter was out of reach.

And now? I’ve been traveling and living overseas for the past two years. Newly returned to the UK, I now survey a banking industry that is severely emasculated. Yet even in this much diminished form the allure remains. There’s something compelling about the financial services industry, but do I really want to get back in?

Comments (12)

  1. clearly if you were running a book where you only lost $1.5mm for a 300bps rate hike, then you must have been a very small cog in the machine. Perhaps you should consider moving to our small provincial town. Given that you have been away for 2 years, then you might not be familiar with its attractions which are 4 distinct seasons, beautiful sandy beaches with azure blue waters, well groome ski slopes with moderatley priced hill top restaurants, 6 star hotels, a plethora of 3 Michelin star restaurants etc.

    Charlie and I await you.

  2. Glad to hear you do something interesting now – hopefully you don’t feel that you wasted those years in the bank (..you live and learn I suppose)

  3. did you manage to turn any your hobbies into something of a career? I want a new life too but can’t afford it. My wife would kill me.

  4. @kidsatschool – If your wife kills you, affordability is no longer an issue for you.

  5. “clearly if you were running a book where you only lost $1.5mm for a 300bps rate hike, then you must have been a very small cog in the machine.”

    prescient. This guy would have had to have some serious gamma hedging skillzz to keep his losses that small. This guy is full of sh*t.

  6. Just walk home today and tell your wife you have been sacked, and you now have money problems.

    Then pretend to look for a job for a few weeks, and tell her you can’t find it. Tell her she needs to start moving her ass (be more gentle if she is an ok lad).
    Then observe the reaction. If she is in control, supportive and caring – well, you are a very lucky man. Go back to work in financial services and be a slave for her, women like those are rare.

    If she is a bitch – guess what? Just dump her and move on with your life. Chase your ideal job.
    If she tries to get a disproportionate amount of money out of you – go live abroad and show her the middle finger, you can speak english and there is plenty of places where you can go.

    Having kids make things different, but perhaps they need to get real too, get through life the hard way i.e. no private school and swiss skiing holidays?

    Just don’t be afraid of stepping out of your daily routine, you only have 1 life.

  7. methinks that someone ( @adam ) is not completely clear about basic financial engineering
    to be honest its so quiet that i might even feel the urge to help him out ..but then again…the daily maily is looking interesting today

  8. @ AQD => that is probably the most insightful comment I have read on this forum for a while..good lad!!

  9. There was no rate hike by CBR in 2009. Last rate hike was in late 2008 (and again this year) and certainly less than 300bps.
    Also there was supposedly a rate HIKE and you were LONG short term rates and yet your book would LOSE money. Can you please elaborate on that?
    Nice fiction otherwise.

  10. theta- if you are long STIR’s , you are looking for a rate CUT and vice-versa…………. in pricing terms 99.50 = 0.50% 00.05 = 99.50%

    basic stuff , no ?????

  11. adam,
    He said rate hike, not cut. And he said he was long rates, not long IR futures. Therefore, a HIKE should result in a GAIN, no?

  12. theta
    if you re-read the article, he goes on to say
    ” Everyday I would price up the same interest rate derivatives ……….”
    IR futures , no ?

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