Unstructured Finance

The reshaping of commodity markets: John Kemp

Only the brave or the foolish would make predictions about the future amid the biggest market upheaval in three generations. But it is already clear the crisis is profoundly reshaping the commodity trading industry. 
Our commodities and energy columnist John Kemp, formerly an economist for RBS Sempra in London, lays out his thoughts on how the industry will be remade over the next few years. Click here to read. 

Executive payout: confused yet?

Anyone scratching their heads over executive compensation can be forgiven for being a bit puzzled. These days, it’s hard to keep track of who owes what, which executives are getting a fat bonus, and what might happen if government bailout money reaches bankers’ pockets.

The Wall Street Journal sparked more debate today in a report outlining that the same financial giants getting cash infusions contractually owe executives more than $40 billion in deferred pay, including bonuses.

Now banks are grappling with how to retain and attract top talent without setting off a storm of criticism by angry taxpayers and regulators alike.

Job Bank – Oct. 31

The following financial services industry appointments were announced on Oct. 31, linked where possible to personal profiles on LinkedIn. To inform us of other job changes, please e-mail moves@thomsonreuters.com.

Law firm Linklaters elected Alberto Luzarraga as a partner in its corporate/mergers and acquisitions practice group in New York. Luzarraga joins from Shearman & Sterling.

The holding company for the Jupiter group of companies appointed Matteo Dante Perruccio as nonexecutive director. He was recently appointed as chief executive of Hermes Funds of Hedge Funds.

Check Out Line: Sales up at Burger King, profit misses view

Check Out Burger King missing Wall Street views but saying sales grew 12 percent worldwide, with sales at restaurants open at least a year up 3 percent in the United States and Canada.

Lower-cost fast-food chains have benefited in the economic downturn, while higher-priced sit-down restaurant chains like Applebee’s and Chili’s Grill & Bar have been hit particularly hard, as consumers slash discretionary spending to adjust to falling home prices, a credit crunch and higher food and fuel costs.

The home of the Whopper hamburger has been sprucing up aging restaurants, extending hours and adding value menu items to better compete with rivals like McDonald’s, Taco Bell, Pizza Hut and KFC.

GM comes up empty

GM went trick-or-treating early but it looks no one answered the door. Either that, or its trick wasn’t very good. Either way, it appears to have come up empty-handed in its bid for government goodies.

The much-talked about General Motors-Chrysler merger is off the table for now. Reuters is reporting that talks hit an impasse after the Bush administration said “no” to funding for the deal, citing three people with direct knowledge of the talks.

GM had approached the Treasury in recent days about support for the merger through some $10 billion in new funding that would have included taking an ownership stake in the merged company, people familiar with the talks have said.

Desperate times

The extent of the shrinking economy became abundantly clear today to American Express employees, a whopping 7,000 of whom will be laid off in a massive restructuring plan. Similarly, Legg Mason Capital Management says it will cut up to one-third of its workforce in a move described by one analyst as “inevitable”. The downsizing amounts to only about 50 employees, but more importantly marks the asset manager’s first job cuts in 26 years.

Is any sector or company safe? The short answer is no, although some industries are safer than others.

On a brighter note, ex-Wall Streeters are pursuing some unusual career paths. Bloomberg reports that enrollment at the American Bartending School is at a 5-year high as laid off workers — including thousands of former financial industry types — troll the job market.

Clueless about copper … in Chile?

Nearly 20 foreign correspondents showed up this week to a meeting at the Chilean Copper Commission (Cochilco) to hear the world’s top authority on copper give guidance on where prices were headed.

Maybe copper has not been the sexiest story.  But as a mining correspondent based in Santiago, it must be the first time I’ve attended a news conference where most of the reporters had absolutely no clue about the metal.

Maybe copper has been taken for granted here. For as the copper futures price halved in a matter of months, the news corps is suddenly very interested in a metal that is central to Chile’s economic future, accounting for over 50 percent of exports and the lion’s share of government revenue.

Job Bank – Oct. 30

The following financial services industry appointments were announced on Oct. 30, linked where possible to personal profiles on LinkedIn. To inform us of other job changes, please email moves@thomsonreuters.com.

London Stock Exchange on Thursday appointed former Lehman banker John Wilson as chief executive of Baikal and promised to announce a revised plan for the pan-European nondisplay, or ‘dark pool’ platform in a few weeks.

Bank of New York Mellon said it hired Richard Brown as managing director and head of international payment and trade services for Asia. Brown, who most recently worked at Bank of America, will be based in Hong Kong.

NRG’s waiting game

A week and a half has passed since Exelon Corp made its unsolicited bid for NRG Energy Inc. But NRG still kept mum on the offer in both its third-quarter earnings pres release and its conference call with investers on Thursday morning.

“Our board is continuing to review the proposal,” Nahla Azmy, NRG’s director of investor relations said on the conference call. ”With that said, please keep in mind the purpose of today’s call is to discuss our third quarter performance and thus we will will not be making any formal remarks nor commenting on any aspects of Exelon’s proposal until an official board response has been issued.” 

So what does the lack of action mean?

“We think this might indicate that NRG is looking at a variety of alternatives beyond simply accepting the offer or remaining a stand-alone company,” Wachovia analyst Samuel Brothwell said in a research note.

Schwarzman’s birthday party – any regrets?

Any regrets about the now-infamous birthday party, Steve?

That was the question asked by Fortune Magazine’s Andy Serwer at an intimate breakfast gathering at posh New York restaurant Per Se.

For those that have forgotten, Schwarzman’s 60th birthday party on Valentine’s Day in 2007, to which hundreds of guests were invited, featured British rocker Rod Stewart, comedian Martin Short, singer Patti LaBelle, two Harlem choirs and a marching band. It came to symbolize an era of excess — memories that some would now rather forget.  Months later, the financial crisis hit and Blackstone’s stock plummeted. It is currently about a quarter of its June 2007 IPO price.

“Obviously, I wouldn’t have wanted to do that and become some kind of symbol of that period of time — who would ever wish that on themselves? No one,” said Schwarzman, when asked if he’d do it again.