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Champagne Days Over As Traders Hold Wake For Bear Stearns

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http://business.timesonline.co.uk/tol/busi...icle3571866.ece

Having been made redundant myself I do feel for people who lose their jobs but some of these guys have been earning huge amounts and bonuesses, have they not been putting a few quid away for a rainy day ?

A Sterns Insider says

"As the Reuters screen flashed “London traders told stop dealing with Bear” we cheered. After a couple of hours drinking, the news the bank I worked for was in so much trouble had finally sunk in.

Like hundreds of my colleagues, I had left work for the afternoon. There didn't seem much point in sticking around. Nobody would trade with us, and we certainly couldn't work on any deals. There was a steady trickle to the area in Canary Wharf around the Slug & Lettuce and All Bar One from lunchtime, until hundreds of Bear employees - about 90 per cent of all the people left after the job cuts - were gathered.

It was a bit like a wake for the bank. We had been out around here before to celebrate, when deals had just been done or we had just got bonuses and the champagne was flowing. Tonight was more of a beer night.

It all started in the morning when it was obvious the share price had tanked. Then we got an email saying we had liquidity problems, and then heard market gossip that the Fed deal was effectively JP Morgan buying us. The traders all walked out at about lunchtime, and soon most people were sitting around talking about what had gone wrong.

None of us could believe it. Banks don't go bust. It is not meant to happen.I was quite prepared for potential redundancy but other people did not see this coming at all and were devastated. It is almost worse for the senior people who have just lost all their wealth. Their bonuses are usually around 60percent made up of stock options in the bank. Those won't translate into a lot of JP Morgan shares once we get taken over.

All the other banks are on a hiring freeze, so there's not much chance of getting a job anywhere else. There's a slim chance for some of the younger people that they might be kept on by JPMorgan but if they don't there's just the hope of a decent redundancy package. You might be able to live off three months' banking salary for up to a year. All confidence that something could be done all these people who are paid extortionate amounts of money have lost their jobs. They don't understand that it means much more than this. If we can get taken down, who's next? "

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"None of us could believe it. Banks don't go bust. It is not meant to happen.I was quite prepared for potential redundancy but other people did not see this coming at all and were devastated. It is almost worse for the senior people who have just lost all their wealth. Their bonuses are usually around 60percent made up of stock options in the bank. Those won't translate into a lot of JP Morgan shares once we get taken over.

All the other banks are on a hiring freeze, so there's not much chance of getting a job anywhere else. There's a slim chance for some of the younger people that they might be kept on by JPMorgan but if they don't there's just the hope of a decent redundancy package. You might be able to live off three months' banking salary for up to a year. All confidence that something could be done all these people who are paid extortionate amounts of money have lost their jobs. They don't understand that it means much more than this. If we can get taken down, who's next? "

We are witnessing History in the making here.

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It is almost worse for the senior people who have just lost all their wealth.

I suspect that this is a slight exaggeration; they have lost their bonus BS shares, but I guess that they have more than most elsewhere.

But leaving that aside, does it surprise us that more people in the heart of the beast didn't see this coming?

Peter.

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I did hear somewhere yesterday that most of the lags at Bear Stearns London have for the past few years been taking up to 50% of their salary as stock...

Hilarious!!

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Having been made redundant myself I do feel for people who lose their jobs but some of these guys have been earning huge amounts and bonuesses, have they not been putting a few quid away for a rainy day ?

You've hit the nail on the head there. Do I feel sorry for a 1M per year trader who's now claiming poverty? No, of course not. I don't feel any degree of schadenfreude since who knows how I would have acted had my life lead me to that job and position. Do I feel sorry for a junior ops guy earning 30K with a 5K annual bonus living in a 1 bed shoe-box in East London with a 120K mortgage to pay? Yes, I do.

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I did hear somewhere yesterday that most of the lags at Bear Stearns London have for the past few years been taking up to 50% of their salary as stock...

Hilarious!!

Not so much taking, as being given - mostly there isn't a choice in such things.

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Guest KingCharles1st

"You might be able to live off three months' banking salary for up to a year" TRANSLATION=

cont. After that you might have to trade the Aston in for an Audi- the shame of it, and cut down on the holidays- maybe only one overseas holiday- shrug- but I suppose it's still cheap living in the villa in France- so that is an option.

Never really thought about a mortgage- but might have to get a small one for tax purposes- and maybe get rid of the nanny too- the wife may be able to cope with just the maid- we'll have to see how we go"

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Guest X-QUORK

Oh diddums. Has little city boy lost his jobby-wobby buying and selling junk?

Bl00dy lucky he escaped a lynching from taxpayers.

If I was a bit harder I'd love to go down to one of those city bars and stand around just to laugh at them as they try to consol each other.

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But leaving that aside, does it surprise us that more people in the heart of the beast didn't see this coming?

Peter.

It's really quite amazing that people don't see it coming and protect themselves. Are Lehman staff offloading their stock or saying it can't happen to us? I think if I worked at Lehman I'd be offloading, even at the reduced price.

JPM might be a buy. It seems they have special pull with the Fed. Dimon being on the Fed board in NY is obviously totally coincidental. ;)

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No sympathy whatsoever. I'll save it for someone worthy. If we're really lucky the shareholders will sue and take the directors for whats left.

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If I was a bit harder I'd love to go down to one of those city bars and stand around just to laugh at them as they try to consol each other.

C'mon, let's do it anyway... it'll be a laugh :D

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I have no empathy for those who are on £1m plus packages. They should know the risks and should see this as an opportunity to make changes in their lives. They should have sufficient wealth to be able to pursue another options. Some will experience relative poverty to the peer group and may find this awkward but if they have saved a few years at the rate of £400k they should have other opportunities to explore.

However for the minions on packages of around £60k to 70K and below (and there are armies of them in the square mile) they will be in a mess because the city will be shedding staff. Jobs outside the square mile paying £60k are not plentiful for a young person and many will find it difficult to find this sought of remuneration if at all.

A friend of mine’s eldest started last year in the City for a Hedge fund after just 1 years experience was expected to earn £80k and those with a couple of years experience were on packages of £250K plus

I think many on this site (like myself) would be aghast if they saw the salaries paid to the bright young things in the square mile. Over 5000 people in the city were paid over £1m a year with the average male earning £105k.

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Guest KingCharles1st
Anyone up for a HPC Meet at the Slug & Lettuce or All Bar One one lunchtime ?

OH F*** YEAH :P

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I have no empathy for those who are on £1m plus packages. They should know the risks and should see this as an opportunity to make changes in their lives. They should have sufficient wealth to be able to pursue another options. Some will experience relative poverty to the peer group and may find this awkward but if they have saved a few years at the rate of £400k they should have other opportunities to explore.

However for the minions on packages of around £60k to 70K and below (and there are armies of them in the square mile) they will be in a mess because the city will be shedding staff. Jobs outside the square mile paying £60k are not plentiful for a young person and many will find it difficult to find this sought of remuneration if at all.

A friend of mine’s eldest started last year in the City for a Hedge fund after just 1 years experience was expected to earn £80k and those with a couple of years experience were on packages of £250K plus

I think many on this site (like myself) would be aghast if they saw the salaries paid to the bright young things in the square mile. Over 5000 people in the city were paid over £1m a year with the average male earning £105k.

I still have no sympathy, how many of these bright young things went into the industry to build productive long term careers and how many just saw pound signs before their eyes? For a few years now theres been people taking degrees in engineering and the like just as a means to enter the financial industry. For most, they were in it for the money just as all the rest in the square mile were.

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Anyone up for a HPC Meet at the Slug & Lettuce or All Bar One one lunchtime ?

I'm wondering whether Canary Wharf will go back to what it was in the early 80's. A deserted dock!

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[deleted]

I think many on this site (like myself) would be aghast if they saw the salaries paid to the bright young things in the square mile. Over 5000 people in the city were paid over £1m a year with the average male earning £105k.

do you have a source for this? That the average male salary in the city was 105k? Seems high to me.

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Guest KingCharles1st
I'm wondering whether Canary Wharf will go back to what it was in the early 80's. A deserted dock!

GOD- can you imagine the price hits on canary Wharf.... :unsure:

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do you have a source for this? That the average male salary in the city was 105k? Seems high to me.

I think the figure comes from a study of average earnings of people working in financial companies at Canary Wharf rather than the City and is the mean value. Mean financial salaries in the square mile were quite a bit less (around 60IIRC), reflecting the different types of companies there, and mean salaries for all occupations were lower again. Median salaries were also quite a bit lower than the mean reflecting a highly skewed distribution.

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I think the figure comes from a study of average earnings of people working in financial companies at Canary Wharf rather than the City and is the mean value. Mean financial salaries in the square mile were quite a bit less (around 60IIRC), reflecting the different types of companies there, and mean salaries for all occupations were lower again. Median salaries were also quite a bit lower than the mean reflecting a highly skewed distribution.

thx, makes sense!

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I am not surprised that a bank has finally gone bust....losing 98% of the value off its shares...

The mortgage lending policies of so many institutions has been totally crazy - bordering on the corrupt. When I was selling my house in London, I was approached twice by buyers who wanted to get a 125% mortgage and/or a cashback mortgage. They never had any intention of really living in the property as a home or paying back the mortgage. One even suggested that I inflate the value of my property and we split the difference after the sale had gone through. I was amazed at the audacity of these buyers - and have no doubt many transactions of this nature took place. The banks are paying for their own stupidity/greed. unfortunately, allowing banks to go bankrupt seems an option which could lead to anarchy. The banking crisis (the unwinding of their crazy lending policies and their bad debts) is going to be painful...Quarterly losses being chalked up in the billions by so many banks is beyond comprehension...whose money is it they are losing and how can they keep operating?

Soon, the only safe place for anyone with any savings will be in a suitcase under the bed...Conceivably, if property funds can be frozen, how about current and savings accounts next? If they dont have the money, they cant give it back to you, even if it is yours.

I live in France and bank with Societe Generale and admit to thinking about moving my savings given the recent debacle...are we unreasonable in expecting banks to be wise and careful and not lend money if there's no hope it can be repaid? I blame estate agents, surveyors and the banks for this mess - and they will get their comeuppance in due course...problem is that when shit hits a fan it doesnt only fly on the person responsible for it...

Edited by Penny Drop

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I live in France and bank with Societe Generale and admit to thinking about moving my savings given the recent debacle...are we unreasonable in expecting banks to be wise and careful and not lend money if there's no hope it can be repaid?

I also live in France (on the Riveira) and bank with SG.

The French govt and business community would do everything in their power to stop SG going kaput, as it is so large. Like the Credit Lyonnais crisis of the 90's, they would let the taxpayer take the hit rather than let SG crumble.

Some of the smaller banks might go bust........but more probable is that 1 of the big 3 French banks buys them up for 1 symbolic euro.

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  • 295 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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