The Pained Trader: Square Mile Fairytale

A wicked spell has been cast over the Pained Trader's commissions.

  • By The Pained Trader
  • 04 Jan 2018
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Once upon a time in a place called The City, far, far away, there was a research analyst, a fund manager, a salesman, a relatively unattractive sales-trader, a buy-side dealer and a trader and they all got along like a house on fire, a house made of flame-accelerant straw with petrol-soaked barrels of gunpowder in the basement.

It seemed as though everyone in this kingdom, including the depressive sales-trader, might live happily ever after, but suddenly, in a puff of puritanical smoke, Maleficent Mifid, a wicked witch from Brussels, appeared and, after claiming generous expenses, began the mad, cackling crone thing.

“I am the arch-nemesis of the affirmative impulse. I am the demoraliser of entrepreneurs. I am the rigid stifler of mercantile ambition. I….”

“Alright, Mifid, you old fun-sponge, bereft of moral probity, we catch your drift so get on with it,” chorused the dramatic personae of the City, even those with walk-on parts in its daily drama: the barman, the sommelier, the bookie, the drug-dealer, the lap-dancer, the vendor of overpriced sandwiches and so on.

Mifid was twitter and bisted because she had never been invited to the bull-market party and so she cast a powerful spell over the whole shebang and sentenced it to one hundred years of hypersomnia.

Whereas before, the trading floors in London’s financial heart throbbed and hummed with activity, now everyone was cast into a deep sleep, volumes shrank by a quarter, commissions contracted by a third and once-buzzing dealing rooms were silenced and benighted by the prescription of powerful drugs: excess regulation and sharia compliance.

Eurocrats must be watching the tumbleweed blow across the wasteland of the City and clapping their hands with excitement: “Perfect! Now no one can make any money”. 

Market participants sleepwalk around their desks, and leave the building at close of business looking like patients who have been to see the dentist and emerged with their upside capped.

This seems to have been the motivation for the whole process. The evil charm placed on Sleeping Beauty was broken by true love’s first kiss, but what osculatory substitute can take the place of this in the post-Weinstein era?

Insubstantive comments

At Salvation Bank I have not changed my modus operandi in the post-Mifidian landscape because there are no alternatives available to me.

While the latest fatwa from Mifid proscribes the despatch of “substantive comments” to fund managers without payment, “insubstantive comments” are apparently still halal.

As one who has only ever dealt in hearsay, speculation and finger-in-the-air misprognosis, this is undoubtedly to my advantage. To slip through the regulatory net, my advice is don’t write anything worth reading, assert the unverifiable and the unfalsifiable — preferably at the same time — and give pure wind the appearance of solidity.

My output is not muscled with fact or forecast, research or insight and my piffle soufflé therefore fails to fall foul of the firewalls erected by buy-side compliance.

I provide no analysis of great depth but like a fly-fisherman in a chalk stream, I work the shallows brilliantly. No one ever rewarded me for my input before, and recipients always regarded my stockbroking services as ex gratia, so now, to make payment for it compliant does not change the paradigm; it was well-entrenched already.

It’s not as if I’m casting my stockbroking bait so broadly in any case. Natural attrition, a reluctance to engage with the overbroked or the unappreciative, and a petulant winnowing of my distribution list on the first day back this week means I now have so few clients, they could all share the same taxi.

Those who found themselves excommunicated from The Pained Trader’s church are at least relieved of the heavy burden of receiving my top trading predictions for 2018.

Once they have been registered by the careless reader who mistakenly opens the email, it is difficult to deregister them until the moment when each forecast in turn, is dismayed by events in a car crash of skid marks, broken glass and recriminations — quite often before the end of January.

The intellect of man, wrote WB Yeats, is forced to choose perfection of the life, or of the work. I don’t know which I’m aiming at but I suspect I’m missing both.

“When all that story’s finished, what’s the news?/ In luck or out the toil has left its mark/ That old perplexity an empty purse/ Or the day’s vanity, the night’s remorse.”

Legislator of the markets, I have never been. I can commentate on the fluctuations in financial asset prices with effortless fluidity — but unerring inaccuracy. 

If there were an exchange on which the reputations of stockpickers and strategists traded like any other investment, so they could boom and bust like the punts they peddle, I would be a penny stock threatened with delisting, but probably still commanding a premium to the likes of celebrity and perennial misprognosticators like Albert Edwards and Marc Faber.

In truth, though, there would not be many blue chips in that peer group. 

Prophets are ephemeral and most of the “What to Expect in 2018" pieces will prove far less than fatidic. This brings us back to the original question which Mifid sought to address: paying for research of dubious merit.

Maybe Maleficent Mifid is not just some dull but earnest and well-intended functionary dead set on protecting the rights of investors. More probably, it’s a former money manager who acted on duff advice, bust their fund and then nursed a grievance ever since. That at least would make sense.

I will make one confident assertion about 2018 (although I may not be here to see it fulfilled): it will be worse than last year but better than next.

  • By The Pained Trader
  • 04 Jan 2018

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 30,363.50 109 7.56%
2 JPMorgan 27,423.07 94 6.82%
3 Goldman Sachs 27,365.68 53 6.81%
4 Barclays 25,009.79 63 6.22%
5 Deutsche Bank 22,679.02 69 5.64%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Mizuho 299.85 1 21.73%
1 ING 299.85 1 21.73%
1 Commerzbank Group 299.85 1 21.73%
1 BNP Paribas 299.85 1 21.73%
5 UBS 60.22 1 4.36%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 1,607.28 5 22.59%
2 Credit Suisse 1,301.65 4 18.30%
3 UBS 970.80 3 13.65%
4 BNP Paribas 522.35 4 7.34%
5 SG Corporate & Investment Banking 444.17 3 6.24%