Afternoon:
9°c
Last night I phoned a banker friend I have known for about 12 years, in search of the usual chat a gossip, a tip, and pointed references to his bonus. I just got binned, he said, clearly shaken, which changed the tone.
He had worked for a leading investment bank for about the past six years and for a smaller stockbroker before then.
Our paths crossed when he was nearly as green as me and we found we shared a scepticism about what the pair of us were supposed to be doing.
I helped him out once on a deal I heard was in the mix and since then it's been mostly one-way traffic him explaining things to me, giving me context I wouldn't otherwise have got, helping me to sound plausible when interviewing chief executives he knew.
Yesterday he got called into the room which they all suspect has a trapdoor, for news he wasn't really expecting: here is your last salary cheque, here's a chunk of money to set you on your way, here's our lawyer explaining why you should sign here now. There's a taxi outside. No, we'll clear your desk
As stories of human suffering go, this one is far down the list after all, you are itching to say, he got well paid, and well paid-off and will probably get another job quickly if he's any good.
If he was a victim of globalisation, of consolidation, of mergers that shrink workforces, doesn't he deserve it?
Did he work on deals that led to other people losing their jobs in the name of cost-cutting? (Yes, he did.)
Except it reminds you that banking is not a one-way success story, usual amounts of human remorse and pain exist within it and, for most, the money is less than the headlines suggest and doesn't always seem sufficient compensation.
My friend would absolutely get this point he had as much doubt about the life choices he has made as anyone else. In the past 10 years, he has been paid, I guess, at least five times more than me. He never was five times more happy and oddly, he never seemed five times more rich either.
Occasionally the money seemed something he was tied too, something he could never sacrifice it owned him rather than freed him.
Last year's bonus had always gone and next year's had quickly come to seem a matter of necessity.
He's got a nice house and a decent cellar but he also has expectations of what is normal that may now be hard to reach. Otherwise, well, food is just food and London traffic doesn't go faster even for him.
You won't be sobbing for him and he'd think it daft if you did.
The banking industry and much of the rest of the City isn't working for us just now, it seems dysfunctional and in need of radical reform in our interest.
My point is that quite often it doesn't seem to work for them either.
Cause for alarm at Wills' view on shares betting
If people can go to an online casino and bet their life away without heavy regulation, why shouldn't someone be able to take a well-informed position in a small-cap stock, albeit a risky one?
That's from Peter Shakeshaft, the chief executive of small-cap stockbroker Wills & Co, who thinks his firm's difficulties can be almost entirely blamed on beastly regulators.
Wills & Co's future, if it has one at all, is far from clear. (It's not looking good, admits another insider).
Administrators are advising the firm, though they haven't yet been officially appointed. Wills is solvent but not trading, I am told.
Shakeshaft's approach may explain some of the reasons for the firm's difficulties. Going to a casino either online or in person is clearly different to buying a stock, even one that is a long shot. Betting £500 on black is obviously a gamble in a way that spending the same amount on a share is not, or shouldn't be.
That Shakeshaft doesn't think there should be a difference in terms of regulation might give cause for alarm to even the savviest, most experienced penny-share punter.
The Financial Services Authority seems to agree it is in talks with the firm. And so do scores of clients who have complained of shoddy treatment. The fallout from Wills one of the oldest stockbrokers in the City is likely to take years to resolve.
A stampede for the exit at Goldman? Maybe not...
Goldman Sachs is about to suffer a massive exodus of its top talent. All its most brilliant people will soon march out they will quit immediately on learning in a few days' time just how meagre their bonuses will be.
Applying the bank's own logic, that's the conclusion that must be drawn. Last week, Goldman set aside just $16 billion to pay staff for their noble, divine work in 2009.
That's a near-60% pay rise, which equates to a misleading £308,000 each (in reality, a small pod of godly bankers gets millions, and the other bods get more earthly rewards).
But it was less than they might have paid out, given how brilliant the bankers were this year (entirely unaided by low interest rates or government guarantees, of course). This week, we learn that the banks' 100 UK-based partners are devoutly capping their pay and bonus for 2009 at a miserly £1 million each.
In the past, Goldman has argued that it had to pay its best people absurd salaries to prevent them marching off to hedge fund land.
Now that the salaries are, temporarily, slightly less absurd, we can assume that the bank is braced for serious departures.
There is one other possibility, I suppose. It could be that Goldman's arguments justifying the salaries the top brass pay themselves always were self-serving cobblers. You decide...
