The Pained Trader: I remember, I remember

The Pained Trader meets an ancient rival fallen on hard times.

  • By The Pained Trader
  • 19 Jul 2018
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Two landmark events in the calendar: Monday occasions the 29th anniversary of my debut in the City and tonight the annual emerging markets knees-up in some bumcrack Irish boozer in the heart of the Square Mile.

This evening’s bash is open to both buy and sell-side and because this species is endangered and numbers in seemingly irreversible decline, the net has been cast far and wide to include those among the fallen.

In fact, I suspect there will be more people there who used to do EM than those currently occupied with it. I’m still employed but I reckon my line manager would describe me as someone who used to do EM, as well.

The last time I attended one of these functions — against my better judgment — I enjoyed it primarily because all the belligerence and bravado of the bullish years had dissipated and been replaced with a combination of ennui and resignation. Which I for one was pleased to see, having been alone down there in the gutter, patiently waiting for everyone for some time.

I also saw on a collective basis the cumulative toll that a decade-long bear market in broking had taken on these people, who had been my competition or customers for so long.

In these dress-down days, down in the mouth accompanies down at heel and I was surprised at the disheveled types slouching in looking pinched and paunchy. There were a few keeping up with it for appearance’s sake. For my own part, I had rented a power suit from a gentleman’s outfitters that very afternoon, borrowed someone else’s snappy tie from the cupboard, polished my shoes with my turd-buffing cloth, slathered on some fake tan and took a crafty snifter of some Colombian snow.

Thus fortified, I think I gave a passable impersonation of someone at the top of his game even if that were very subjacent to the bottom of everyone else’s.

At one point, my nemesis from over a decade ago showed up. So many years had not dulled my desire for retributive, violent revenge on the man who had expended a great deal of energy intriguing for my dismissal, an endeavour in which he was ultimately successful.

He had been in my ‘Top 10 Tossers In the City’ list ever since and I harboured many macabre fantasies about retribution one dark night. And here he was before me. But did I recognise the man who had thrown me under a bus and asked the driver to reverse back over the corpse to make it a road burger?

Gentle Reader, I did not. Rag-clad and bushily bearded, he resembled a street sleeper who had been brought in out of the cold and bought a beer out of the goodness of someone’s heart (not mine).

The last conversation I had with him was in about 2005 when, under the influence of intoxicating liquors, I called him up at his desk one afternoon and offered to fight him, shoes and socks off, mano a mano  on the Finsbury Circus bowling green and settle our differences. He had moved on. And down. He had developed a drink problem (ironic considering how many stilettos he had planted between my shoulder blades back in the day when I was out at lunch) which had been the main factor determining his unemployability. He greeted me warmly, though, and told me I looked well. The voice was familiar. It took me a while to reassemble his runty features and then it clicked: “You don’t.”

I bought everyone in there a drink that night but, Gentle Reader, not him and it was worth going, just for that. (Granddad: I kept the promise I made to you on your deathbed. I held my grudges; I never let them go.) In this business you take your satisfaction where you find it.

The way things are going — if you’re new to this column, that’s badly — this evening’s drinks will be the last of their kind because I doubt there’ll be anyone left standing next year to organise it.

As with almost all financial instruments in the Mifid era, there is no margin left in emerging market equities and nor is there any volume. There is no spread in developed market equities, either, but they at least still have high turnover, for now at least, until regulators get to grips with that, too. In any case, I have rented the same suit for tonight. It’ll be like a war veterans’ reunion. Who’s shuffled off this mortal coil this year?

Back in 1989, when the alarm rang at 6am for my first day in the Salomon Brothers cockpit, I remember thinking: “There must be some mistake. Surely, I’m not meant to feel like this every day?”

I wore my own suit and an expression of confidence that only naivety confers. There was a semblance of welcome from HR and a breakfast at which I discovered relations between me and those stainless steel coffeepots with unfathomable lids would always be problematic. Then, barely within an hour of walking through the door, before I’d even had a chance to check out the lavatorial arrangements, this student of English literature found himself — along with other graduates, professors of finance, engineers, economists specialising in statistics and a nuclear physicist — in a maths test without even a calculator to help him.

The exam was designed to make a preliminary assessment of our aptitude for bond portfolio analysis. Of that graduate and post-graduate intake, everyone apart from your humble correspondent runs a hedge fund or set up a fintech as a hobby or, in one instance, became the chairman of Brazil’s central bank.

It transpired the calculator would have been superfluous in any case because I could not understand any question from number four onwards and sat there sporting an expression of bovine vacancy for most of the hour allocated. The results came in fast. The lady from HR had participated simply out of curiosity and she had the lowest score of 12 out of 25.

The lowest score, apart from me that is, who had answered the first three questions correctly and then not answered any of the others at all because they were posed in a language I did not speak. The average score was something like 23.

It was no surprise, then, when HR started allocating initial desk assignments, to see that I was not heading to fixed income research to work under Myron Scholes. But I am shocked now, with the benefit of hindsight, and my awareness then, that Salomon Brothers was the most punchy debt trading powerhouse out there, to see I had been assigned to the junk bond trading desk. Emerging markets had not emerged then. Nor had sales-trading.

The first two things my boss did were to instruct me to replace my plastic shoes, which squeaked, with genuine leather ones and give me a calculator, telling me: “By all accounts you’ll be needing this.”

He was right — for a bit. But I still have it. It sits on my desk before me now as I type.

If it had brought me anything but bad luck, I would call it my lucky charm. I don’t need a calculator or even my fingers to add up my commission right now. Add nought to zero and you have nothing. Which is how I started. It’s how I’ll end.

  • By The Pained Trader
  • 19 Jul 2018

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 67,814.25 217 8.37%
2 JPMorgan 64,786.86 230 8.00%
3 Barclays 55,262.22 183 6.82%
4 Bank of America Merrill Lynch 48,274.42 172 5.96%
5 Deutsche Bank 43,665.36 159 5.39%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Bank of America Merrill Lynch 6,217.19 6 15.22%
2 Deutsche Bank 3,538.77 6 8.66%
3 Citi 2,570.45 7 6.29%
4 Commerzbank Group 2,532.05 5 6.20%
5 BNP Paribas 1,798.71 8 4.40%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 UBS 998.25 3 12.17%
2 Citi 693.55 2 8.46%
3 Morgan Stanley 606.80 4 7.40%
4 Bank of America Merrill Lynch 509.34 3 6.21%
5 Jefferies LLC 409.89 4 5.00%