The Pained Trader: zero-sum game

The Pained Trader has no interest in a hot new assignment

  • By The Pained Trader
  • 26 Oct 2017
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“Se non e vero, e ben trovato”.Even if it’s not true that Donald Chump told the widow of a US soldier killed in action her husband “knew what he’d signed up to but I guess it hurts anyways”, what matters is not the reality of the actual conversation but that, insensitive and emotionally cloth-eared braggart that he is, we can imagine him saying it. We will side with her version. A man who can claim, “I’m more humble than you can comprehend”, unwittingly creating the most perfect paradox by boasting about his humility, is not a man who should be taken at his word.

The reason this undignified and lavishly presidential spectacle is uppermost in my mind today is that I called my mother from the desk during the quiet period between 8am and noon and whinged for the entirety of the half-hour-long phone conversation about the investment banking industry and its Cyclical Downtick Bolted Onto A Structural Decline. I was whingeing about the parlous conditions in which we operate but because my mother, like the majority of the population, believes we fritter away our outrageous bonuses drinking Flaming Ferraris when not driving gleaming Ferraris, she offered very little by way of sympathy and rounded up the conversation by saying, in not so many words, I knew what I’d signed up to but she guessed it hurt anyways.

About that, but not much else, she is right, my mother. It seems as though there is no limit to how much turd can be spread on that sandwich from we must all take a bite. This has not been a vintage week for the industry or its public relations, which were dented somewhat by the forex scandal at HSBC, or its reputation for competence as Barclays and Deutsche Bank both demonstrated that turning around an investment bank was beyond the capabilities of their respective CEOs, both paid handsomely to that end.

Reading accounts of the trial of HSBC trader Mark Johnson, found guilty of fraud in the US this week, introduced me to a new euphemism: ‘pre-hedging’. It sounds so much less criminal than ‘front-running’ or ‘ramping’ but would appear to replicate the primary characteristics of both practices. Even in conversation with serial murderers, I have never occupied the moral high ground but I do think Mr Johnson was foolhardy to exult “Oh, fucking Christmas” on hearing Cairn Energy was to proceed with the purchase of sterling and was premature to ask “Do you think we got away with it?” immediately afterwards on a recorded line. 

Architect of his own downfall he may be, but the trader can count himself unlucky to be the one who was caught doing something that, industry-wide, was considered standard practice for decades. Pump and dump was the business model on which many brokerages were founded. At the Russian bucket shop that once employed me, I inadvertently cost the prop trader a small fortune when he decided to anticipate a client order of mine, only for us to discover that, for the umpteenth time in my so-called career, I had confused buy and sell. I know stock trading is meant to be a zero-sum game but on that occasion it seemed that everybody lost. No Russian I worked with was ever obliged to translate ‘apotropaic’ back into his mother tongue on my behalf.

I bear no animus towards Barclays and Deutsche Bank, although I have interviewed at both firms and found my candidature summarily rejected. No, even though I adhere closely to my grandad’s dictum, “Hold your grudges, son, never let them go”, I take no especial pleasure in their inability to operate a brokerage profitably and I wish them no harm. I don’t need to — because if they are struggling to make a return now, then what chance come January when the dread spectre of MiFID II materialises? It hovers above us all like the shadow of the sparrow-hawk over the partridge chick on the moor.

Where will they turn to make a return? Hands up who would like to work in Saudi Arabia? The Saudis have dreamt up a Vision 2030 and have all sorts of ambitious plans for a new $500bn city and financial centre in a port called Neom, a privatisation boom and the liberalisation of stock and bond markets. (Personally, I think they should start with the liberalisation of society and life itself before they think about a derivatives exchange.) At present, Saudi Arabia is the only area I can see where bulge brackets are actually deploying capital and resources to take advantage of this imaginative project, spearheaded by Crown Prince Mohammed bin Salman. This isn’t going to be the Middle-Eastern equivalent of equities in Dallas, though. These will be plum assignments, because while you may have an image in your mind of a booze-free desert, Prince Mohammed wants to effect real change and modernise the Gulf kingdom.

Really? Well, I don’t know about you, but MIFID or no MIFID, Corbyn or McDonnell, bear market or bull market, rich man, poor man, I think I’m going to take my chances here.

  • By The Pained Trader
  • 26 Oct 2017

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 396,777.09 1492 9.04%
2 JPMorgan 362,850.76 1643 8.27%
3 Bank of America Merrill Lynch 347,296.27 1234 7.92%
4 Goldman Sachs 258,020.28 869 5.88%
5 Barclays 254,568.76 1002 5.80%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 40,406.23 179 6.71%
2 Deutsche Bank 36,549.85 129 6.07%
3 BNP Paribas 30,861.76 187 5.12%
4 Bank of America Merrill Lynch 30,788.61 98 5.11%
5 Barclays 30,558.69 87 5.07%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 21,646.51 97 8.86%
2 Morgan Stanley 17,632.84 92 7.22%
3 Citi 16,974.50 104 6.95%
4 UBS 16,761.62 67 6.86%
5 Goldman Sachs 16,222.71 88 6.64%