si trasforma la finanza in america - gz
By: GZ on Mercoledì 21 Agosto 2002 03:11
Jack Grubman l'analista forse più pagato del mondo è stato costretto a dimettersi da Citibank-Travelers-Salomon-Smith-Barney ieri.
Grubman, sui 36 o 38 anni, guadagnava 20 milioni di dollari annui, circa 40-45 miliardi di vecchie lire, quanto Colannino alla telecom.
Non è indagato e non ha problemi legali, ma ha raccomandato Worldcom fino alla fine ed era legato a doppio file ai capi di worldcom ed è stato mostrato a sufficienza che c'era un conflitto di interessi enorme perchè worldcom pagava decine di milioni di $ di fees a Solomon.
In questo pezzo affascinante Kessler mostra che queste dimissioni sono un segno del fatto che le grandi organizzazioni come Solomon, Morgan, Lehman sono in declino.
A Merril Lynch il fatturato sono 20 miliardi di $ e 10 miliardi sono stipendi e bonus oggi. Strapagano traders , banchieri e analisti e ogni due anni se li strappano, ma se si guarda bene ora i top analisti e traders di qualche anno fa sono passati sempre più in proprio e mettono in piedi delle boutique di analisi (vedi ad es Tom Brown che era l'analista numero di wall street per le banche e ora è in proprio a www.bankstocks.com)
Come dice Kessler 10 anni fa occorreva essere Merril solo per il fatto di avere i mainframe computers da milioni di dollari.
Ora la tecnologia consente ai loro analisti e traders migliori appena hanno una reputazione di mettersi in proprio (kessler è uno di questi) in centinaia di hedge funds e boutiques di analisi (come Soundview o Sanford Bernstein)
Uno dei motivi è che i conflitti di interessi di Merril, Lehaman, Solomon, Goldman, Morgan sono semplicemente ineliminabili, per definizione una banca che fa affari e poi trading e poi gestioni patrimoniali e poi IPO ha dei conflitti interni enormi.
Ma se si guarda bene ad es il business delle analisi e raccomandazioni lo stanno perdendo nei confronti delle società piccole che fanno solo analisi. E sul trading ci sono ora 5-6 mila hedge fund contro 3 o 400 di solo 10 anni fa.
Qui sotto da un idea di come si trasforma la finanza in america
-------------------------------------------------The Rise and Fall of Full Service
By ANDY KESSLER WSJ di oggi
Mr. Kessler is a former hedge-fund manager.
The resignation of analyst Jack Grubman from Citibank-Travelers-Salomon-Smith-Barney-Sheason marks the end of an era for Wall Street. Not for analysts, but for big ugly firms.
Mr. Grubman, who became an icon of the high-wattage, wealth-generating analysts of the '90s was set up to take a fall for all the excesses of that era. When New York Attorney General Eliot Spitzer last week subpoenaed documents from Salomon Smith Barney relating to Mr. Grubman, it was clear the game was up. But as his critics point to a conflict of interest in his role as an analyst and investment banker, they miss the broader institutional conflict.
Access to Capital
Wall Street plays an indispensable role providing access to capital, so U.S. companies can lay waste to competition in world markets. And all for a modest fee, (yeah right). At first, it was white shoe, blue-blooded partnerships that ruled the Street, providing a gateway to the wild and woolly market. When Kraft needed to raise $100 million for CheezWhiz, Arntwe, Bornwell and Howe made some phone calls and placed shares with a few friends for a $5 million fee.
But that blue blood ran red in the Street when the go-go market in the late '60s got out of hand with 30% annual volume increases. Clerks in back offices couldn't move paper fast enough to settle trades. Customers refused to pay until they got their certificates. The market would close one day a week to catch up on paper shuffling. IBM and others solved the trade-clearing problem, but between 1969 and 1970, a credit squeeze meant 160 partnerships on Wall Street went belly up.
Partnerships combined into big firms, many that went public to be able to afford mainframe computers. When Intel went public in 1971, it took more than a few phone calls to raise money for the creator of dynamic random access memories, weird stuff back then. White shoes gave way to road shows and the hiring of analysts to pick winners and losers from new funky industries. Bigger wasn't just better, it was critical.
Somewhere along the way, though, these big firms lost their souls and investment banking became a drab commodity. By the 1980s Wall Street had become its own worst nightmare: undifferentiated men in gray flannel (Armani) suits.
Bankers rarely broke the mold and those that did won great success. Legend has it that when a Fortune 50 firm invited Wall Street firms in to give advice on a deal, all but one team of bankers pulled all-nighters for a 200-page pitch book. Robert Greenhill, who eventually became CEO of Smith Barney, flew in by himself on Morgan Stanley's behalf, pulled a single piece of paper out of his suit pocket, suggested three great ideas and left. He got the business.
Investment bankers intent on getting deals would hire the best analysts and dangle chunks of their big fees as incentives. Mr. Spitzer, done with e-mails, is now rummaging through analysts' year-end performance reviews. I can almost read them out loud, "I brought in this huge deal, I sold this company, I singlehandedly funded this entire industry, please pay me big time." I can't think of an analyst at a big firm that is not conflicted.
But now the template that brought us stock-touting analysts is outdated. The whole buy-hold-sell thing is a remnant of the old days on Wall Street -- a charade acted out on the unsuspecting public. To stay credible as an analyst, you'd scream "buy" every so often, but sadly, it became irrelevant whether the stock went up. One top analyst earned the nickname "heat seeker," because a recommended stock was sure to blow up in your face shortly afterwards.
Deals are the oxygen for analysts. A so-called Chinese wall conceptually separated analysts from bankers. But it never really stopped the Mongols, and it hasn't stopped the conflict.
The trouble is that Mr. Spitzer is trying to clean up an act that should no longer exist. More than a few pieces have fretted that Mr. Grubman "urged" the unsuspecting public to buy WorldCom. (Of course, I myself am conflicted; I worked with Jack years ago).
Analysts working with bankers shouldn't recommend stocks to anyone. But someone should. Sanford Bernstein de-emphasized ratings years ago. Sleek research-focused firms like Pacific Crest are popping up to fill the credibility void big Wall Street firms have left in their wake.
But inside those big firms, the old partnerships secretly never went away. Compensation is the single largest expense on Wall Street, running half of revenues. Think about that, MGM (Merrill, Goldman and Morgan) each with around $20 billion in capital, are shells in which employees cut up half the take. Conflicts show up directly in paychecks. You think Citibank CEO Sandy Weill complained about the billion in fees from telecommunications that his company pulled in? He set up the structure, and took more than his share of the 50% haul.
Analysts may be obviously conflicted, but conflict is endemic to all of Wall Street. Traders are worthless without some "edge." Equity derivatives are more profitable for the Wall Street firms that create them than for their customers. Brokerages buy order flow so they can see where trades are and profit. Others pay for option flow so they can charge big spreads. Or, at the NYSE, they trade ahead of customers for a penny. So embedded is the concept that, when I raised my hedge fund, prospective investors would ask me outright what my conflict was.
The Glass-Steagall Act's separation of banks and investment banks is just recently dead, and by all signs the ultimate conflict is already rampant. JP Morgan Chase is still on the hook for billions in Enron bank loans that looked designed to land lucrative investment banking deals. Citibank is stuck with a few of its own. If I was a depositor, I'd yank my money out of these full-service firms and shove it into a mattress.
On Wall Street, all you have is your reputation. But reputation is shot at many or all of the Street's big firms. Watch them wither: Bigger is now worse. No one, except shareholders, cares if Merrill Lynch survives. You don't need to buy a mainframe to work on Wall Street anymore, capital is already flowing to fund small but effective firms. Analysts are becoming hedgies, truly great bankers are forming boutiques. Prescient traders can trade from a hot tub. The only savior for big firms is tighter Securities and Exchange Commission rules that only they can afford to comply with.
The world depends on Wall Street's survival. I hope reformists, and those like Mr. Spitzer who hyperventilate for more rules, don't kill the system that funds our prosperity. New York has plenty of problems. Go pick on the media or pigeon droppings and let the forces of Wall Street figure out how to clean up their own mess.
Edited by - gz on 8/21/2002 1:16:17
Edited by - gz on 8/21/2002 1:22:15