You've heard of webcasts and podcasts...now, welcome to cubecasts. From our cubicle to yours, here is the first edition of The Weekly Oasis, a newsletter in which Bankerella shares her views on market events, financial news, and things of interest to everyone from gorillas to prospective monkeys.
Ka-ching!
According to the Financial Times, JP Morgan reported earlier this week that it will pay a retention bonus of up to 100% of the annual revenue produced by brokers in Bear Stearns' prime brokerage unit. Of course, the prime brokerage is one of the choicest cuts of Bear, and brokers who've built a loyal client base are well-known for taking their books of business elsewhere (and getting a fat incentive check) if they're not happy with their firm.
Will analysts and associates at Bear's less-profitable investment bank be greeted by the same welcome wagon? Many aren't waiting to find out. According to recruiters I've spoken to at two major financial recruiting firms, there is a sudden wave of Bear Stearns analysts entering the job market. Some say they're "just testing the waters," while others say, "I'll consider anything." Looks like the handshake for young bankers won't be quite as golden. If you're at Bear, we want to hear from you. Stop by WallStreetOasis.com and let us know how the transition is treating you.
Grounded!
Remember getting those speeches from your parents that always started with, "As long as you're living under my roof…."? On Wednesday, Hank Paulson called for the Fed to supervise investment banks as long as they're receiving emergency aid. The House Financial Services Committee has also called for the Fed to broaden its powers and become a "financial services risk regulator". Shadows of Glass-Steagall, anyone? After all, economists like Robert Kuttner believe that the 1999 repeal of Glass-Steagall (a 1933 act which reformed and regulated retail and investment banks) contributed to the collapse of the subprime market and our current economic mess. From there, it's no huge leap of logic for someone to say that if deregulation got us into this mess, re-regulation could get us out of it. So far, Hank sounds like he doesn't think Fed supervision should become permanent, but it's pretty safe to say that these firms won't be getting the keys to the car for a little while.
Public Service Announcement
Public Service Announcement for all my models-and-bottles guys out there. When spending a little quality time with a high-priced escort, if your pants come off, your socks need to join them. In fact, I'll give you a little tip – take the socks off first just to be safe. Why bother, you ask? Well, you may enjoy your four-thousand-dollar session in the sack, but how much fun will you be having when you find out later that she's been laughing about "the sock guy" with all her friends? Party foul, Mr. Spitzer.
Questions? Comments? Send an e-mail to Bankerella@WallStreetOasis.com or send a private message to her at WallStreetOasis.com
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"JP Morgan reported earlier
"JP Morgan reported earlier this week that it will pay a retention bonus of up to 100% of the annual revenue produced by brokers in Bear Stearns' prime brokerage unit. Of course, the prime brokerage is one of the choicest cuts of Bear, and brokers who've built a loyal client base are well-known for taking their books of business elsewhere (and getting a fat incentive check) if they're not happy with their firm. "
The guys getting paid are NOT prime brokers. They are private client, ie retail brokers. Big difference.