Morning Coffee Sep 21 2011

"Brutal" Fixed-Income Performance, Brutal Layoffs?

By julie steinberg

Jefferies was first up to report third-quarter results and if its fixed-income revenue is any hint of what's to come from the rest of the Street, it's going to get ugly.

The firm reported fixed-income trading revenue of $33 million, down 79% from $161 million in the year-earlier period. Global economic conditions contributed to the shortfall.

On a conference call yesterday morning, CEO Richard Handler said August was the third-worst month for credit markets in history (after September and October 2008). He said the third quarter had been "brutal."

Jefferies is considered the canary in Wall Street's coal mine, which means bigger firms like Goldman Sachs and Morgan Stanley may report equally dismal results. If that's the case, those working in fixed income might be the first to be let go at firms implementing layoffs.

Even before the trading scandal hit UBS, the firm was planning to pull back from its fixed-income operations. Some have recommended that UBS get rid of its commodities unit but keep its foreign exchange and equities divisions. Many of the firm's announced 3,500 layoffs are supposed to fall in the fixed-income division.

Nomura is also reportedly cutting of some of its fixed-income workers.

Which banks will be next?

Related: Jefferies to Slow Hiring

Getting Along (Bloomberg)

What do you do when your two co-heads of investment banking don't see eye to eye? Split up the duties and send one to London so they don't have to interact, of course.

David Spade's Handiwork (Washington Business Journal)

Could it be that those awesome commercials for Capital One have earned the company more customers, fueling the need to hire? The bank will hire 1,800 financial analysts and call-center employees by the end of 2011.

Berkshire's Pay (DealBook)

Ted Weschler is giving up a handsome pay package to work under Warren Buffett. He'll still be getting a seven-figure salary, but he'll be taxed at 35% on income, instead of the capital gains rate of 15% most hedgies pay.

More Loans, Fewer Jobs (MarketWatch)

As FINS predicted in January, commercial and industrial loans have increased this year compared to last year. But most companies are choosing to spend the loans on equipment instead of new employees. That said, there have been more opportunities at banks for those interested in commercial lending.

Best of the Best (Vault)

Here's a surprise: JPMorgan beat out Goldman Sachs in a recent ranking of the best banking employers. Could it be because JPMorgan has largely avoided both layoffs and the limelight?

Spending It (Here is the City)

You've picked up your $100,000 razor; now you need something to offer your guests when they come to your penthouse. Enter Vallure Gold Standard Vodka, a German triple-gold-filtered spirit sold in bottles made from gold and jewels. Because there's obviously nothing more impressive to the ladies than a gold bottle you can't eat, drink or utilize in any real, useful way.

Doing the Laundry (FINS via Corruption Currents)

Catching money launderers is a growing area for compliance departments, according to a new survey from Dow Jones.

Buzz Around the Office

The Dreams of Children (

Ever wish your doodles could become reality? Now, they can. In related 3-D printing news, this.

List of the Day: Three Salary Negotiating Tips

Don't sell yourself short:

1. Research the potential salary for someone with your qualifications.

2. Talk to others in the field about what you might be worth.

3. Respond confidently when answering any interview questions about salary.


Play the new finance career game from FINS!

Financial Dream Jobs - Sign Or Decline
You just got an offer for your dream job,
you must change your name to Bernie Madoff.

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