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Derivatives

The wit and wisdom of Ian Kerr

For over 20 years Ian Kerr’s writing was the must-read of the capital markets. Provocative, funny and thoughtful by turns, he managed to inject fun into markets and situations both triumphant and disastrous. Michael Halls reflects on his style and offers samples of his different voices.

Ian Kerr’s writing was divisive. There was no question about that — you either agreed with his views or you disageed, and that of course is the secret of a good columnist. Although Ian might have blushed at the comparison, he followed in a direct literary line that stretched from Daniel Defoe through to Beachcomber in the UK or from Mark Twain to PJ O’Rourke in the US.

A dapper Euromarketeer -

... lunch today at the Paris Grill. For fun I try to disguise myself as a Eurobond trader. I ask the Claridge’s valet how this should be accomplished. I am informed that I should wear:

1) A brown suit, with very wide lapels

2) A shirt of violent hue, without top button

3) A Kipper tie, to clash with the shirt

4) Wide round-toed shoes (circa 1969) last cleaned at least a month ago.

I tell the valet he is out of date. All my trader friends are extremely smart. Some have even been to Oxford, although I’m not sure whether this was to the university or on a day excursion.

Diary of a Eurobond Salesman,

Euromoney, July 1981

, July 1981

He was also eminently readable. Even his fiercest critics — who claimed his column was a triumph of style over substance — would read him each week. And of course his fans, and they were many, would simply say that in both style and substance he excelled. His view of his job was a simple one. A decade ago he set out his goal: "Our only objectives have been to ruffle a few feathers, tease, cajole, praise and on occasions even to applaud — contrary to popular opinion we have never set out to be deliberately destructive.

"In the highest paid industry in the world there are inevitably some hugely inflated egos. Because such feelings of self-importance are often totally unjustified, it is sometimes necessary for an outsider who used to be an insider (you don’t truly understand the business if you haven’t been there) to prick a few ego balloons — and every year we buy a new long hatpin from the Harrods gift department."

That ability to deflate the pompous often made Ian dangerous to publish.

Anticipation and dread
The subeditors in particular approached editing his column with a mixture of anticipation and dread. Anticipation in that he was always a good and entertaining read. And dread because Ian wrote right up to the brink of what was printable.

"The problem was not that Ian would be saying bad things about people or institutions for the sake of it — almost invariably his facts or inside knowledge were spot on — but could that be proven in a court of law?" said one sub-editor.

One way he found to tone down some of his views was through the creation of a mythical set of contributors — a cast of characters that might have been straight out of a Dickens novel.

Who can forget his renowned Swiss bureau chief, Brunhilde Grossrösti, sipping her coffee and eating cream cakes in a café on the Bahnhofstrasse in Zurich, always ready to divulge the latest dirty goings-on at UBS and Credit Suisse? And then there was Heidi Von Grippenutz with her predilection for corporally punishing miscreant bankers and whom Ian described as "that stern black leather-clad disciplinarian whose clients tell her their every secret on German banking".

The statuesque Slapper Alice

Nor should we forget Mee No Li, his column’s louche hat check lady in a Hong Kong night club, always willing to exchange personal favours for hard cash and news of Asian dirty dealing. There was the monumentally statuesque Slapper Alice, behind the bar of the City pub The Dog and Puddle, Russian informant Nookya Plentiov, and many more ...

Then there was always Ian’s interpretation of the real world. And getting to grips with that was frequently confusing.

It was well known, for example, that his faithful Labrador puppy Portia had been bought a chunk of Lehman shares in the early 1990s — Ian with characteristic modesty always said that he was a mostly indifferent stockpicker — but did Portia really give him investment advice?

Certainly Ian claimed that was the case. When Portia buried the Lehman stock in the rose garden, did Ian really know that she was making a buy and hold recommendation, as he later claimed?

Early years in the bond market: gentlemen to the core

I started work in the City in February 1963 at the long-forgotten stockbroking firm of Norris Oakley, with offices in Telegraph Street, off Moorgate. The address was better than the offices, but at least we were right next door to the famous Butler’s Head pub. There was no Mr Norris nor Mr Oakley, but the partners were all gentlemen to the core, who came to the office between 9.30am and 10.00am and left shortly after 4.00pm.

I was very happy, learned a little about how to appraise a company, helped to hand-deliver mail within the City if one of the messengers was sick, and lusted, without any success whatsoever, after a girl called Vivienne who processed customer order tickets and seemed to be a much better mathematician than myself.

The introduction of the very first international bonds between 1959 and 1961, and certainly the famous Autostrade offering on July 17, 1963, therefore passed me by completely.

It was only when I moved to Strauss Turnbull & Co in late 1964, whose shabby and cramped offices centred on 36/38 Cornhill had once included the premises occupied by Scrooge, that I was first introduced to Eurobonds by the legendary Julius Strauss.

He took me under his wing because American companies were starting to come to London and I claimed to know just a little about US stocks — haven’t we all told at least one tiny white lie?

Look Back at the 1960s, EuroWeek

Celebration of Excellence, June 2003

The Dead Canary
For almost 15 years, Ian campaigned against the move of the City to Canary Wharf. His frequent references to the wild, dangerous marshlands around the ‘Dead Canary’ hit a chord with many readers. Ian’s descriptions of the first generation of bankers as exiles cast into the windswept, desolate wastes were not such an unfair description of Canary Wharf in the early 1990s.

And when it came to individual banks and their shareholders, Ian’s remarks were an extraordinary mixture of acid wit and meticulous phraseology.

Who else but Kerr would permanently add brackets after Bank of America (Charlotte NC), immediately making the largest bank in the US sound parochial and full of good ol’ moonshine boys? Or similarly refer to the shareholders of Barclays as gentlemanly East Anglian landowners whose only expertise was in root crop farming and agricultural machinery?

An almost evangelical sense of campaigning sometimes characterised his writing. Unkinder elements said the vitriol of his remarks about the skills of ‘Chuck’ Prince or Philip Purcell were vindictive to the point of obsession. But quite often events proved him right. Some of his campaigning lasted for years. Although sympathetic enough to Charles Prince, when he succeeded the legendary Sandy Weill as top gun in Citigroup, within months he had dismissed him as a lawyer who had made good.

A similar view emerged with the demise of Morgan Stanley’s Purcell where, thanks to high level sources, he was able to follow each twist and turn of the battle for control of the bank in exquisite and hilarious detail.

But critics of this approach would be missing the point — Ian’s writing always contained a strong sense of mission. When he thought someone was unfit for the job for whatever reason, he would say so unequivocally. And he was never as spiteful as some of those whose pride he had wounded were about him.

Certainly Ian predicted with characteristic forthrightness the eventual demise of many senior names and institutions. For years he insisted that NatWest was ripe for a take over. Take for example his hyperbole in 1995:

"What a lot of fuss about National Westminster, the bank that time forgot ... any news which does not involve NatWest shooting itself in the foot is considered so unusual that the bank’s shares briefly danced a highland fling ... but does NatWest Markets possess a single banker in its ranks who is capable of closing a deal?"

From acid wit ...

While profit margins are under consistent pressure and competition threatens extinction for about a quarter of the Euromarket houses next year, all of these houses are falling over themselves to hire more staff.

Anything with an IQ higher than Neanderthal man can command a six-figure salary in either London or New York. (Anyone with an IQ of less than a Neanderthal man can join a London regulatory committee.) ... and as for the traders they have an unswerving sense of corporate loyalty which has been known to last five minutes.

Diary of an Investment Banker,

Euromoney, November 1985

... to gentle snipes

What is the latest news from PaineWebber International, the house which has stayed on the edge for so long that friends now refer to it being in the ‘fringe bracket’?

A Week in the Markets,

EuroWeek, May 2, 1997

He could be uncannily prescient as well, reading the writing on the wall well ahead of the others. The demise of Rolf Breuer, first at Deutsche Bank and then later at Deutsche Börse, was uncannily predicted by Kerr who, months before either event, was offering bookmaker’s odds on how long he would stay in the top job. Multifaceted
And the humour was very often tongue in cheek. His annual expeditions to Sotogrande in the south of Spain would invariably be accompanied by scathing descriptions of his fellow Brits’ tattoos, string vests and lack of refinement.

Something that strikes one from reading through his stories again are the vast array of cultural allusions. His knowledge of history was extensive and the fate of obscure battles fought between relatively unknown protagonists would be rewarmed as they formed a powerful parallel to a capital markets issue. Kerr also knew to Ian Fleming precision what shops, shoes, hats, nightspots and food the successful and cultured would patronise — they were exactly his own tastes.

But there was another side of Ian too that came out occasionally in his columns. With heart-wrenching simplicity he outlined the unexpected death of a beloved wife. So too, over the last couple of years when he battled but never quite shook off illness, he would mention his trials without the slightest trace of self-pity. It was simply part of his duties as a columnist.

Lovers of intelligent, stylish, witty writing will join with those who knew Ian in the flesh to agree that the death of Ian is a loss to us all, both as a writer and a man.

Life in bonus-challenged Frankfurt

From snowy Frankfurt we hear from our famously stern, fur-wrapped bureau chief, Heidi von Grippenutz. She says the city is awash with banking rumours and grumpy socialist citizens threatening to revolt.

What is the problem? Have Commerzbank and HVB finally resolved who should be allowed to propose marriage, or will they just continue to dance around their party hand-bags?

Has Dieter Rampl of HVB been seen dining with Commerzbank’s Klaus-Peter Müller and scribbling notes on the back of an envelope?

Has Mehmet Dalman agreed his last bonus pool at Commerzbank? And is he about to ride off into the sunset towards a land populated solely by hugely rich hedge fund managers?

No, the delicious Heidi says that Germany’s loony left-wing socialists are taking to the streets about the Eu11m compensation package awarded to Deutsche Bank’s chairman, Josef Ackermann.

A Week in the Markets,

EuroWeek, March 19, 2004

NatWest’s trading hole

What a difference three days can make. On Tuesday last week Martin Owen’s NatWest Markets was on a roll. Employees were dancing in the streets.

A special run of ‘we just kicked BZW in the bollards’ T-shirts sold out in minutes. Lock of St James, hatters to the gentry, sent around a director to take measurements for Martin Owen’s crown. Deep in the Welsh valleys sheep looked nervous, the price of leek futures soared.

That was Tuesday. Come Friday afternoon the sheep could relax ... not only was the news of a £50m black hole devastating but it made the bank and NatWest markets look very foolish. Would sheep make better managers than the present directors?

A Week in the Markets,

EuroWeek, March 7, 1997

A tale of two Stans [Yassukovich & Ross]

I hope that these stories are not true about Stani Yassukovich leaving Ebic. If this were the case the Eurobond market would lose one of its most elegant, erudite and best loved heroes. Stani alone managed to raise the image of the AIBD from that of a vegetable barrow stall at least towards the shelf of, say, a Marks and Spencer.

Stani’s legacy will always be that he held the first ever AIBD board meeting where everyone wore a suit. His absence would also dilute one of the best Eurobond stories. Stani approaches a central banker saying "My name is Stani". The central banker smiles. "I’ve heard a great deal about you Mr Ross."

Diary of a Eurobond Investor,

Euromoney January 1984


The cultured Merrill Lynch

As I was not a voting delegate [at the AIDB meeting, Venice 1982] I accepted an invitation to go to a Merrill Lynch concert in the afternoon.

I can see you saying to yourself "Isn’t a concert slightly up-market for Merrill Lynch?" and everyone in Venice was asking the same question. However, out of the 1,700 bondies in Venice no less than 700 worked for Merrill Lynch and they were assured of an audience.

It was a great success though some of the medieval chamber music was drowned by the snoring of the Merrill Lynch bond traders in the front row.

Debris in Venice,

Euromoney, July 1982


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