Once upon a time, you could spend a decade in banking and be financially set for life. Not any more. These days, you need your finance career to last - you need to play the long game, to avoid the man-traps that can consign you to a life of day-trading and helping friends draw up business plans. Helpfully, therefore, a sagacious senior banker has pointed out exactly where these traps are located.
Writing on Wall Street Oasis, the anonymous ex-managing director (MD) in an investment banking division (IBD), says he saw plenty of colleagues crash and burn and that it was often the most impatient and ambitious among them who came over all Icarus-like.
For example, he advises against moving to another bank for more money - especially at the peak of the market: "..one of my fellow VPs got a bid for 50% more money to go to a European bank. He took it. His view was it's more money today... My view was that, it was 2006 and it felt close to the top of the market, if he got laid off it was going to be harder to get back in the game from where he was... 2008 happened, his new team lost a few hundred million, and he left the Street forever."
He advises too against moving into hedge funds (or private equity for that matter) before you've built a solid network in banking: "I had another friend who...had been in FX sales and was getting a shot to be a hedge fund trader...When 2008 happened, hedge funds began to close. CJ had been great as a trader, but he hadn't spent enough time building a network and building skills outside of being a flow trader. The hedge fund closed, and CJ is still unemployed..."
He advises against relying on your work to do all the talking ("You need to have [internal] relationships.") And he admonishes anyone who would spend their money as fast as they make it ("Don't let your lifestyle grow with your income. If you let that happen, you will be forever trapped at the desk.") Most of all, he warns against getting into debt and letting your health subside: " I'll tell you the story of an MD.....who worked so hard, that his last two wives had divorced him, the stress of making his budget on the desk and paying alimony and child support for his families caused him to smoke a pack of cigarette a day...he passed away - while sitting at his desk at work. You don't want to go out like that."
Separately, Credit Suisse CEO Tidjane Thiam has a rejoinder for anyone who needs to justify the social import of their finance career. "Investment banking is a legitimate business,” Thiam told the Financial Times. “Companies need to grow. There’s a real job to do there. Europe needs growth desperately...European companies need more routes to the market and a strong European banking sector is part of that.”
Tidjane Thiam says you can thank him for resisting calls to "destroy" Credit Suisse's investment bank. (Bloomberg)
European investment banks are cutting 30,000 jobs. (Bloomberg)
Standard Chartered shows that European banks can now offer only utility-like returns. (Breaking Views)
Standard Chartered expects its return on equity to remain below 10% until 2020. (Breaking Views)
Bill Winters might not move Standard Chartered's HQ away from the UK: 'We find the UK to be a very pragmatic and predictable place to do business.' (Reuters)
John Cryan has been telling Deutsche Bankers not to worry about their bonuses: "We want to remain competitive to retain good people and attract good people.” (WSJ)
Deutsche's equities trading business didn't do very well in the past quarter. Now it's got a new global boss. (Bloomberg)
Gary Cohn at Goldman Sachs: Ok, there might be some times when people at Goldman have to get their head down and work extra hours to deliver to a client, but internal surveys suggest that most people at the firm are incredibly happy: "The numbers we get are off the charts statistically." (CNBC)
Richard Gnodde, co-head of the European business at Goldman Sachs, says trading will come back "for sure" and that Goldman wants to build its private banking and asset management businesses in Germany. (Handelsblatt)
Morgan Stanley's (ex) head of M&A for the Americas is off to join a client. (New York Times)
A 49 year-old Vietnamese man who's family escaped Vietnam on a military plane as communist rule began, was Blackstone's longest serving dealmaker. Now he's leaving. (Bloomberg)
Coffee works best when you have one cup every 48 hours. (Qz)
Photo credit: William Warby