The Wall Street jobs story everyone's talking about today is in The Wall Street Journal, and it's ugly.
The gist is this: Get ready for a mass exodus of traders from top Wall Street banks.
It's not hard to understand why. The market is quiet. As a result, trading — in bonds, credit, currencies, what have you — just isn't the moneymaker it used to be. People have been warning of this hole in bank balance sheets for months.
Especially in the second quarter, analysts expect trading revenue to nosedive, and it's key revenue — at Goldman it makes up 30% of their quarterly haul. This deficiency means banks must find a way to cut down unnecessary costs.
Headhunters such as Richard Stein, senior partner at executive-search firm Caldwell Partners, told The Journal that there are "too many people on these trading floors" and that he's starting to get calls from people who want to jump ship before they're pushed out.
From The Wall Street Journal:
Mr. Stein of Caldwell Partners says he has received between 17% and 19% more calls in the past month than in the same month a year earlier from managing directors inquiring about job opportunities. Managing directors inhabit the top rung of the Wall Street career ladder.
"It's very clear to most people that making money and profits is harder," said a credit trader who left a large U.S. bank earlier this year. "There's a high probability you're going to be pushed out. Most people don't come into a bank thinking they're going to be there 15 or 20 years, even if they do well."
Until the market changes — interest rates rise or things become more volatile — traders will be twiddling their thumbs. And Wall Street can't afford that.
Maybe we will see these people on futures.io (formerly BMT). I worked on the Cbot floor for JPM and dealt with Wall Street traders and I often wondered how they would do trading their own money without all of the advantages of trading for a Wall Street firm...I guess we'll find out.
The Market is Smarter than You Are
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Not well, in my opinion. Largely due to lack of risk control and oversight/accountability, again in my opinion. Less so due to 'edge' of size of firm.
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Thanks for the report. Informative, but wish there was more to it or a follow up article.
i.e who profited in the end? Any speculation why the markets are so "quiet"? due to lack
of real "liquidty"? lack of regulation of forces that took liquidity and activity by more participants
away from the market? or they're too embarrassed to explain why? an overwhelming fear of something very big and bad coming? or just too hard to find inefficiencies in the market. i.e. computer trading has taken over? etc.
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