Breakingviews

Goldman pulls every lever to make machine run

October 16, 2014

Bankers and traders helped the firm increase profit 50 pct from a year ago. Investments like Tesla supplier Mobileye contributed, too. Socking away less for pay, though, provided the real fillip to 11.8 pct return on equity. In tough times especially, that’s how it should work.

Traders need help to make Wall Street shine

October 8, 2014

Markets are more volatile, but not enough to ensure decent Q3 profitability for Goldman, JPMorgan and Morgan Stanley. That’d take up to $12 bln of extra revenue trading bonds, FX and commodities among them. Expect additional cost cuts. And other businesses will have to step up.

Banks need to take the guesswork out of Libor

March 16, 2012

Probes into alleged manipulation of the benchmark interest rate have exposed a crucial flaw: sometimes it’s based on an educated guess. That won’t restore confidence in a figure that underpins $360 tln of loans and derivatives. A better approach would be to use real transactions.

Review: Fictional financiers remain elusive

March 30, 2012

Despite the crash, recent novels have produced few memorable investment bankers. Roger Yount, the anti-hero of John Lanchester’s “Capital”, might have been an exception. Sadly, his tale is lost in the sprawling novel’s attempt to capture a cross-section of London.

Libor rigging looks like victimless crime

July 2, 2012

Barclays’ deception is bad for the banking industry, but the artificial quotes probably didn’t significantly distort borrowing costs or the economy. There may have been big losers in this scandal, but they aren’t likely to be found too far afield from other banks’ trading desks.

Review: Banks bet their lives on neurochemistry

August 3, 2012

John Coates shows that trader activity is heavily subject to their neurochemistry. High testosterone brings more profit and risk and cortisol shuts traders down in crashes. The obvious regulatory implication: too-big-to-fail banks need women traders, paid flat salaries.

UK gas price probe another jolt to cosy markets

November 13, 2012

Allegations that traders rigged UK wholesale gas prices, if true, would be another blow to the public’s faith in market indicators. Libor was bad enough. Anger at rising heating bills makes a gas scandal more politically explosive, even if the financial stakes look smaller.

Banker-versus-trader duel over on Wall Street

July 28, 2010

Picking the chief of an investment bank used to be a relatively straightforward process. By and large the business that made the most money got to put its man forward. So when trading profits ruled the day, the shirt-sleeved denizens of the desk won out over the pinstriped dispensers of financial advice -- and vice versa when mergers and IPOs reeled in the big bucks. That relatively simple duel of thumb may, however, be a casualty of the recent crisis.

JPMorgan’s coal lump wobbles trading gravy train

June 8, 2010

Wall Street trading may be returning to reality.

Wealth Addicts Anonymous? It misses the point

By Edward Hadas
January 20, 2014

Ex-trader Sam Polk says that money-sucking finance types should meet up to get a grip on their bonus addiction. If such support groups are needed, meetings should start with a firm lecture on why greed is not good. But there’s a better way – common-sense pay regimes.