Levine on Wall Street: Unhappy Captains, Unhappy Analysts

Important lessons here include (1) don't eat cereal while driving, (2) don't take lunch breaks, and (3) if your chairman falls asleep at a shareholder meeting, wake him up.

Our Gross is an unhappy captain.

If you suddenly develop a public reputation for being sort of nuts, and you decide to fix that by giving an interview to Bloomberg Businessweek, one good thing to ask yourself is, "will I sound sort of nuts in that interview?" Bill Gross gets pretty deep into existential questions here ("Sort of like the caterpillar in Alice in Wonderland—instead of who are you, who am I?"), and also "drives himself to work along the Pacific Coast Highway in a black Mercedes, controlling the steering wheel with his knees," while he eats a "to-go box of Special K with blueberries." But overall it's a pretty endearing portrait. If you're going to be a wildly successful bond manager for many years, you'll probably have some unusual personal traits, and the best you can do is try to fix the ones that hurt other people and own the rest of them. And focus on making money for your clients:

Because, I'm sure they want us to be happy and joyful and have good lives, but their primary concern is that they're happy, which I think has always been our focus—you be happy first, and we'll worry about our happiness second.

It's still no fun being an analyst.

I can't say I'm that surprised by this, but the new round of protected-weekend policies haven't made junior investment bankers happy:

A number of young bankers say that while they can now enjoy a leisurely brunch or a binge of television watching on Saturdays, their overall workload has not changed noticeably. It just gets pushed to a different day.


JPMorgan Chase has given its analysts the option of taking a "protected weekend" — Saturday and Sunday — each month. While several analysts spoke positively about the change, one, who recently left the bank, complained that the weekends had to be scheduled four weeks in advance, requiring the kind of planning that can be incompatible with a young person's evolving schedule.

One theory behind these policies is that junior bankers don't actually do 80 hours of work in a week: They do, I dunno, 40 hours of work, but all at the worst possible times, and a little bit of decent planning during the week could avoid Saturday work without making Sundays any worse. This article is evidence against that theory. Another theory is "junior bankers like being martyrs, so we need to save them from themselves," and that one remains tenable.

How're things at SAC?

Introspective, is I guess the takeaway from these Bloomberg News and Wall Street Journal articles that check in with Point72 Asset Management and reminisce about the glory days, when the firm was called SAC, made a lot of money, and did a lot of insider trading. "Prosecutors have undoubtedly broken SAC as a major force on Wall Street, but they have not sent Mr. Cohen to prison," says John Coffee to the Journal, which I guess is bittersweet for the prosecutors but still has to be a bummer for the people at the broken SAC.

Is there a bubble?

Here you can read a claim that we're in a tech bubble. Here is an important caveat. Here is a discussion of the state of the tech initial public offering market. Here you can read Congress's take:

"America's startups and small businesses continue to encounter difficulties accessing U.S. capital markets to finance their operations," said New Jersey Republican Scott Garrett, who chaired Wednesday's hearing.

This is a Harry-Frankfurtian sentence; by all indications America's startups are actually having a grand old time accessing U.S. capital markets. But there might be a new "JOBS Act 2.0" to make it even easier for startups to raise money.

Bank of America did some naughty credit-card stuff.

And is paying $772 million in fines and refunds. The story is basically that it mis-sold and overcharged for various credit monitoring services, but if you want the fuller story I'd send you to the Consumer Financial Protection Bureau's web page, where there is a very clear press release and explanation of the consumer compensation. (Compare the Office of the Comptroller of the Currency, which sounds more like a banking regulator.) It can't be easy setting up a new financial-institution regulator with the goal of communicating with consumers in plain English, and this is pretty impressive work.

What's next for capital regulation?

Some thoughts include "a new call for big US banks to retain a portion of their earnings in a special capital account (SCA) that can be tapped to replenish their core capital instantaneously, and automatically, when it is diminished due to losses" and calls to "increase the risk-based capital surcharge for US systemically important firms to a higher level than the minimum agreed to internationally, such as by reference to dependence on runnable short-term wholesale funding."

Win with teamwork.

Harvard Illinois Bancorp is a wee bank that is in a proxy fight with an activist investor named Joseph Stilwell. Harvard Illinois's chairman apparently enjoyed a brief nap at last year's annual meeting. Stilwell knows how to run a proxy fight, and I highly recommend reading this filing. Carl Icahn had better hire him quick, because he's going to be a star.

Things happen.

Citadel is 8.8 times levered. Be careful, lunch breaks may increase volatility. Analyst commutes. Reporter swims. Where were you when you got into Phi Beta Kappa? Let's get social (social) with social media. (Related.) "SEC Announces Charges Against Honolulu Woman Defrauding Investors Through Social Media."

Is kosher the new organic?


This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

    (Matt Levine writes about Wall Street and the financial world for Bloomberg View.)

    To contact the author on this story:
    Matthew S Levine at mlevine51@bloomberg.net

    To contact the editor on this story:
    Toby Harshaw at tharshaw@bloomberg.net

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