WEBVTT - Banks, FTX, and Jobs (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.200 at Bloomberg dot com slash podcast. You know, this year, 0:00:23.000 --> 0:00:24.639 it's been a tough year on Wall Street from a 0:00:24.640 --> 0:00:28.120 profit perspective. But let's let's be honest. They had was awesome, 0:00:29.120 --> 0:00:32.960 was even better. But then the traders at Goldman Sachs 0:00:33.000 --> 0:00:34.640 are doing a lot better this year than they did, 0:00:34.720 --> 0:00:38.239 like record, but the bankers not so much. Right, So, 0:00:38.280 --> 0:00:40.720 if you're doing I P O s and stuff like that, 0:00:40.880 --> 0:00:43.280 M and A trades, not so much. I'll tell you 0:00:43.280 --> 0:00:45.800 what though, if I'm working in the business for you, Paul, 0:00:46.520 --> 0:00:48.880 and I make you a lot more money this year 0:00:48.880 --> 0:00:50.800 than I made you last year, you should pay me 0:00:50.840 --> 0:00:52.640 more this year than you paid me last. So this 0:00:52.720 --> 0:00:55.480 is how the conversation goes. And you're right the conversation. 0:00:55.560 --> 0:00:57.400 I'm gonna your boss. I'll say, yes, you had a 0:00:57.400 --> 0:01:01.000 great year, we appreciate it. But the bonus pool is 0:01:01.080 --> 0:01:04.080 down because overall going across the street. Yeah, that's what happens. 0:01:04.120 --> 0:01:06.760 So Shrie not AAJ and he's hopefully not going across 0:01:06.760 --> 0:01:09.560 the street. Uh. He's here in a Bloomberg Interactive broker studio. 0:01:09.560 --> 0:01:12.000 He's a Bloomberg News. He covers all things kind of 0:01:12.080 --> 0:01:14.760 just Wall Street financial services, all the big you know, 0:01:15.040 --> 0:01:17.520 mucky MUCKs on Wall Street. So shreet, how tough is 0:01:17.560 --> 0:01:20.240 it gonna be on Wall Street here? Because we're it's December. 0:01:20.319 --> 0:01:24.320 This is bonus discussion time, just front center for everybody. 0:01:24.600 --> 0:01:26.319 So let me give you just a window into some 0:01:26.400 --> 0:01:29.759 of the discussions happening. As heated as Matt sounded just 0:01:29.880 --> 0:01:31.959 that horrified at the thought that he would not be 0:01:32.040 --> 0:01:34.679 paid for good performance, I can guarantee you some of 0:01:34.680 --> 0:01:38.679 the discussions happening inside Goldman Sachs have been much more heated. 0:01:39.080 --> 0:01:41.479 The initial plans that they have discussed, especially for their 0:01:41.480 --> 0:01:44.520 traders who have had a bumper or on their way 0:01:44.560 --> 0:01:46.760 to pretty phenomenally are the best since two thousand nine. 0:01:46.800 --> 0:01:49.480 Of course, two thousand nine has all other audities that 0:01:49.560 --> 0:01:52.000 sort of led to that record. Here the best year 0:01:52.040 --> 0:01:54.640 in thirteen, the best year in the best time in 0:01:54.720 --> 0:01:58.080 thirteen years. Black kids weren't even there thirteen years ago, right, 0:01:58.880 --> 0:02:01.000 and some of them were there now are in much 0:02:01.000 --> 0:02:04.200 more senior position than expecting much bigger payouts. But the 0:02:04.280 --> 0:02:06.680 initial round of discussions, as they typically tend to happen 0:02:06.680 --> 0:02:11.800 across Wall Street post Thanksgiving. Around Thanksgiving, the conversations and 0:02:11.840 --> 0:02:15.239 the numbers relate to deskheads have led to somewhat of 0:02:15.280 --> 0:02:17.720 an allergic reaction, and you can see that, and that's 0:02:17.720 --> 0:02:20.399 why it's a surprise across the street. There is no 0:02:20.440 --> 0:02:23.560 doubt that do You Making has come off its highs 0:02:23.560 --> 0:02:26.560 of last here if you've had a massive slowdown invest 0:02:26.560 --> 0:02:30.600 banking across the board, revenues are down about and the 0:02:30.639 --> 0:02:33.480 culture of Wall Street is today as it has been 0:02:33.560 --> 0:02:35.880 yesterday and for decades in the past and will be 0:02:35.880 --> 0:02:39.000 in the future, is pay for performance. So you expect 0:02:39.040 --> 0:02:43.000 banker bonuses to be cut significantly. Not so much traders. 0:02:43.040 --> 0:02:44.200 And that is why it was a bit of a 0:02:44.240 --> 0:02:46.320 surprise for us that even though they've had a pretty 0:02:46.440 --> 0:02:49.919 good year at Goldman, the traders, they are talking about 0:02:49.919 --> 0:02:52.880 cutting their bonus pool. But in some ways the smoke 0:02:52.919 --> 0:02:56.200 signals coming out of Goldman sacks will make a lot 0:02:56.280 --> 0:02:59.960 of people across the street and c and twitchy because fine, 0:03:00.000 --> 0:03:03.519 and they may not. The delta between the revenue performance 0:03:03.560 --> 0:03:06.519 said Goldman and the bonus discussions might be pretty large, 0:03:07.160 --> 0:03:12.000 But there will be a gap elsewhere in every other 0:03:12.200 --> 0:03:15.680 major bank. This thread of austerity will carry over across 0:03:15.680 --> 0:03:18.000 the street. So so what does what does that mean 0:03:18.040 --> 0:03:20.120 for me? If I would say I'm going across the street, 0:03:21.040 --> 0:03:23.359 I go across the street and they're facing the same problems. 0:03:23.800 --> 0:03:26.200 Are we going to see a big This is exactly 0:03:26.280 --> 0:03:28.400 what I was wondering when I was reading probably your 0:03:28.440 --> 0:03:31.120 story this morning. I was I was thinking, does this 0:03:31.200 --> 0:03:34.520 mean a bunch of traders are gonna leave Goldman Sachs 0:03:34.760 --> 0:03:36.800 and they're gonna go over to Jeffreys? But Rich Handler 0:03:36.880 --> 0:03:38.640 is saying it's gonna be a tough year here too. 0:03:38.680 --> 0:03:41.080 But boys, you know, so are they going somewhere else? 0:03:41.880 --> 0:03:44.800 And that's a good point because banks are not the 0:03:44.880 --> 0:03:48.360 only game in town. There is still a really strong 0:03:48.560 --> 0:03:52.200 bid from hedge funds and other by side firms. And 0:03:52.240 --> 0:03:56.120 if you're in the top quartile, top decile of performance 0:03:56.160 --> 0:03:59.640 at any institutions, you will still be bid up. Yes, 0:03:59.680 --> 0:04:02.480 we're talking about an uncertain twenty three. Yes, there are 0:04:02.520 --> 0:04:05.120 other challenges on the horizon. But if you're at a bank, 0:04:05.360 --> 0:04:09.000 a trader, I cannot live in a vacuum. Right. You 0:04:09.080 --> 0:04:11.560 are not on the only division at the film. It is, 0:04:11.600 --> 0:04:13.720 after all the culture of one large bank. There are 0:04:13.760 --> 0:04:16.240 other divisions. And as one of the executives that pointed 0:04:16.240 --> 0:04:19.120 out to me, you can only be as happy as 0:04:19.160 --> 0:04:23.000 your unhappiest child. So for safe, for instance, at Goldman, 0:04:23.080 --> 0:04:26.279 you have a consumer business that's losing not of a 0:04:26.279 --> 0:04:29.400 billion dollars in a year. Two bad traders. If you 0:04:29.440 --> 0:04:32.480 did really well, we still can't pay you that. Hedge 0:04:32.480 --> 0:04:34.640 funds don't have that same risk exactly right, And that's 0:04:34.680 --> 0:04:38.479 the argument you cannot make to your top people. So um, 0:04:38.800 --> 0:04:41.400 one of the story I want to read free So 0:04:41.960 --> 0:04:44.560 if you know, if you know a reporter covers this sector, 0:04:44.640 --> 0:04:47.520 let me know is the story that was a year ago, 0:04:47.880 --> 0:04:50.920 and they were great stories. Every investment bank had to 0:04:51.000 --> 0:04:53.960 raise the pay for their junior bankers and they were 0:04:54.000 --> 0:04:55.800 doing it almost on a weekly basis to one up 0:04:55.839 --> 0:04:59.039 each other. Does that ever reverse itself? I mean, because 0:04:59.240 --> 0:05:02.680 you know we'll literally the assarch and and also come 0:05:02.680 --> 0:05:04.599 into a investment banking at eighty five grand, and I 0:05:04.600 --> 0:05:06.640 think where we ended after a six month period was 0:05:06.640 --> 0:05:08.640 like a hundred fifty grand or something like that. Does 0:05:08.680 --> 0:05:10.880 it ever go back? Do you think? I mean, you've 0:05:10.920 --> 0:05:13.640 you've you've seen wal Street over the years, Paul, And 0:05:13.760 --> 0:05:16.640 like you know, King today, Paper tomorrow, and King again. 0:05:16.760 --> 0:05:20.359 Sometime in the future, these cycles will repeat themselves. It 0:05:20.560 --> 0:05:23.680 was certainly top of the cycle last year. The war 0:05:23.800 --> 0:05:26.520 for talent was was a phrase that made its way 0:05:26.520 --> 0:05:29.200 into eight K filings across the street as they were 0:05:29.279 --> 0:05:32.839 lavishing bonuses left right and center. Not so much right now. 0:05:33.800 --> 0:05:36.159 Clearly you can't walk across the street to another bank 0:05:36.200 --> 0:05:38.440 because they're dealing with the same challenges. Last year they 0:05:38.480 --> 0:05:40.960 were talking about pay, the pay for performance culture that 0:05:41.040 --> 0:05:45.479 embodies and exemplifies sort of the month ro on Wall Street. 0:05:45.880 --> 0:05:48.520 Today it feels like pay for someone else's performance. And 0:05:48.720 --> 0:05:53.119 unfortunately that's how twent and this is when it gets ugly, 0:05:53.560 --> 0:05:55.440 is it's it's one thing to have a conversation we're 0:05:55.440 --> 0:05:58.479 gonna cut your bonus, profits down when it's really ugly 0:05:58.560 --> 0:06:01.120 because profits, we're gonna cut your bone us and profits 0:06:01.120 --> 0:06:04.200 are up is apart for some people, but for something 0:06:04.200 --> 0:06:06.160 when it gets really ugly is when they craft these 0:06:06.240 --> 0:06:11.040 creative equity like instruments to give to you, um, you know, 0:06:11.200 --> 0:06:15.160 restricted stock units. We had them at one point. Um. 0:06:15.200 --> 0:06:18.000 That's when it gets funky. Now you know they try 0:06:18.080 --> 0:06:20.479 to say, hey, you know they're trying to incentivize you, 0:06:20.560 --> 0:06:22.960 but you already have way too much exposure to your 0:06:22.960 --> 0:06:25.039 employer exactly, so they try to give you some deep 0:06:25.040 --> 0:06:27.360 dis kind of things that we haven't seen those stories yet. 0:06:27.400 --> 0:06:29.520 And when you start to see those stories, that's when 0:06:29.560 --> 0:06:31.599 it gets bad, because that's when they say, we don't 0:06:31.600 --> 0:06:33.400 even want to give you equity because we know you're 0:06:33.400 --> 0:06:35.520 not gonna take our equity because our equity sticks. So 0:06:35.520 --> 0:06:37.919 we're gonna give you these leverage restricted stock units that 0:06:37.920 --> 0:06:40.280 will pay out two to one in five years if 0:06:40.360 --> 0:06:42.320 we turn things around. Let's take a trip down the 0:06:42.360 --> 0:06:46.200 rabbit hole. Two thousand eight. Goldman Sex terribly across the street. 0:06:46.240 --> 0:06:49.360 Goldman actually made money. Goldman actually did well do your 0:06:49.400 --> 0:06:51.080 of the financial crisis. What I love the scene if 0:06:51.120 --> 0:06:53.240 people were told it's really gonna be hard to pay you, 0:06:53.279 --> 0:06:57.039 our police accept some equity five six, ten years down 0:06:57.040 --> 0:07:00.599 the line that paid off in speeds that was worth 0:07:00.640 --> 0:07:05.720 a few billion dollars they made off like any credit suite. 0:07:05.760 --> 0:07:07.960 We got that in either two thousand one or two 0:07:07.960 --> 0:07:10.280 thousand two, you know, when the dot com thing had 0:07:10.360 --> 0:07:13.320 at burst and that thing ripped. Man, that which the 0:07:13.360 --> 0:07:16.880 one thing that in my years that really had like 0:07:16.920 --> 0:07:19.720 a three four, five x twenty years later. Would you 0:07:19.720 --> 0:07:22.360 take credits to ees Equity today? No? No? And you 0:07:22.480 --> 0:07:26.440 also had a policy right of anything invested you sold 0:07:26.560 --> 0:07:30.520 sell it right away. Yeah, so I sold Swiss francs 0:07:30.360 --> 0:07:32.840 and it isn't that the normal you would want to 0:07:32.840 --> 0:07:36.360 do that, right? And if a majority of your Stearns 0:07:36.400 --> 0:07:39.160 and Lehman brothers they didn't sell because when you sell, 0:07:39.560 --> 0:07:42.000 it's perceived as you're not supporting your firm and all 0:07:42.040 --> 0:07:44.720 that kind of stuff. But let's talk about smart financial policy. Yes, 0:07:44.720 --> 0:07:47.440 I can see top management. You know, the optics are 0:07:47.560 --> 0:07:48.880 just as bad. You don't want to do this. You 0:07:48.960 --> 0:07:51.040 want to be seen as having skin in the game. 0:07:51.360 --> 0:07:54.200 But for almost everyone else, because the majority of it 0:07:54.600 --> 0:07:58.200 is linked to stock and prudent financial advice says you 0:07:58.240 --> 0:08:00.800 need to be diversified more off them. They're not as 0:08:00.800 --> 0:08:03.040 soon as it best. You know, as it is, you're 0:08:03.360 --> 0:08:05.480 pretty much attached to the firm you're working at. Your 0:08:05.520 --> 0:08:07.360 fortune is tied to them, so as soon as you 0:08:07.400 --> 0:08:09.560 stalk best, you might as well take it out and 0:08:10.160 --> 0:08:12.200 put it in an index fund if you again that 0:08:12.880 --> 0:08:16.760 we saw it the Great Financial Crisis. Unfortunately, too many 0:08:16.760 --> 0:08:19.240 people at bear Stearns and Lehman Brothers did not do that, 0:08:19.480 --> 0:08:23.120 and they just got wiped out, wiped out. Bummer. But 0:08:23.560 --> 0:08:26.280 at least a lot of them could go become teachers. Yes, 0:08:26.400 --> 0:08:29.000 they good, all right, So I guess we'll get some 0:08:29.040 --> 0:08:31.960 more color on this over the next several months. And 0:08:32.120 --> 0:08:34.440 the payofs are usually February right three, kind of February 0:08:34.480 --> 0:08:37.840 March timeframe. So so don't be too happy to have 0:08:37.880 --> 0:08:39.959 your initial discussion and decided to leave it. Leave it, 0:08:40.080 --> 0:08:42.720 leave at your end, because then you will not get you. 0:08:42.720 --> 0:08:44.840 You gotta stick around at least until don't read our 0:08:44.880 --> 0:08:47.000 stories and leave. Yeah, exactly right. So that's when you 0:08:47.040 --> 0:08:48.640 see the turnover on Wall Street is kind of in 0:08:48.640 --> 0:08:50.880 that February March. When people get paid, then they can 0:08:50.880 --> 0:08:53.720 start moving around street. Not Rodging does all that stuff 0:08:54.480 --> 0:09:00.679 for Bloomberg News. We appreciate that. All. Let's talk a 0:09:00.679 --> 0:09:05.120 little global investment banking, little European investment banking. Credit Suis 0:09:05.320 --> 0:09:08.040 in particular, that is a story that just keeps on giving. 0:09:08.360 --> 0:09:12.280 It was once a proud, proud uh you know, European 0:09:12.400 --> 0:09:15.120 and global investment bank. Now it's having some hard times. 0:09:15.160 --> 0:09:20.800 Marion Hoftemeyer, financial reporter with Bloomberg News. She's based in Switzerland. 0:09:21.200 --> 0:09:25.079 She joins as does senior banks analysts at Bloomberg Intelligence. 0:09:25.120 --> 0:09:28.120 Alison Williams. Uh, Mary, I want to start with you here, 0:09:28.240 --> 0:09:32.720 give us the latest on what's going on with Credit Swiss. 0:09:33.080 --> 0:09:36.560 What can you tell us? So? The latest that's going 0:09:36.640 --> 0:09:40.200 on right now is we have this ongoing volatility in 0:09:40.200 --> 0:09:44.720 the share price that's partially related to the capital race. 0:09:44.800 --> 0:09:48.240 There's currently a rights issue happening um that will help 0:09:48.280 --> 0:09:50.760 them shore up their balance sheet. But separately to that, 0:09:50.880 --> 0:09:54.559 last week we had quite some concerning news around profitability 0:09:54.760 --> 0:09:58.160 and asset outflows at their wealth division, which has caused 0:09:58.160 --> 0:10:01.920 some concern because we've seen four billion francs leave the bank. 0:10:02.880 --> 0:10:05.960 So and this is an important business to them, right Allison. 0:10:06.400 --> 0:10:10.120 I kind of romanticize the Swiss banks as these asset 0:10:10.200 --> 0:10:13.120 managers that give you, um, you know, anonymous numbers. I 0:10:13.160 --> 0:10:15.880 know they don't really work that way anymore. At least 0:10:16.000 --> 0:10:19.719 they divulge everything when any country asks. But is it 0:10:19.960 --> 0:10:22.679 the most important business? For credit sweets as well as 0:10:22.760 --> 0:10:26.400 u B s it is the most important business. And 0:10:26.400 --> 0:10:29.040 and keeping in mind that this is where they're pivoting 0:10:29.080 --> 0:10:32.920 to focus more on, given some of the changes. But 0:10:33.040 --> 0:10:36.240 I think you know, what was important that we heard 0:10:36.320 --> 0:10:40.760 this morning, UM, actually from from a Bloomberg interview with 0:10:40.800 --> 0:10:45.959 the chairman, was that, uh, the outflows have stemmed and 0:10:46.400 --> 0:10:49.800 the hood is improving, so you know, signs that things 0:10:49.840 --> 0:10:53.000 could be setting UM. To Marian's point, we think that 0:10:53.040 --> 0:10:56.920 the shares will remain volatile until they're done with the 0:10:56.960 --> 0:10:59.920 capital raise. I mean, it's it's difficult when we know, 0:11:00.720 --> 0:11:04.720 or when investors know, um, you know, money is coming 0:11:05.120 --> 0:11:07.640 at at a price that's below it's being traded in 0:11:07.679 --> 0:11:10.000 the market. I think that inherently there is going to 0:11:10.040 --> 0:11:12.400 be pressure. But I think that the key thing is 0:11:12.400 --> 0:11:15.960 that the fundamentals for the banks steady, and and the 0:11:16.000 --> 0:11:20.520 other insights were you know, it wasn't institutional people backing away. 0:11:20.559 --> 0:11:23.559 It was retail so UM and and sort of the 0:11:23.640 --> 0:11:27.840 significance there is that the retail investor UM was perhaps 0:11:27.880 --> 0:11:29.559 more worried than a lot of the headlines that were 0:11:29.559 --> 0:11:33.520 coming across in early October and the social media and um. 0:11:33.520 --> 0:11:39.040 The second point that that the chairman made was that, um, 0:11:39.080 --> 0:11:42.240 it's not clients leaving, it was clients pulling some funds 0:11:42.400 --> 0:11:45.040 and so that the significance of that is that those 0:11:45.400 --> 0:11:47.760 can come back. Well, you know, then the client is 0:11:47.800 --> 0:11:50.200 gone that you know, then then they're really gone. But 0:11:50.200 --> 0:11:52.760 if it's a matter of you know, moving funds around 0:11:52.760 --> 0:11:55.600 because they're worried that that money can come back, I'll 0:11:55.600 --> 0:11:58.360 go ahead and plug that interview. That was Francine Laquais 0:11:58.480 --> 0:12:03.480 this morning interviewing so Leman and uh. I recommend people 0:12:03.480 --> 0:12:05.560 go on Bloomberg dot com to watch that, especially if 0:12:05.559 --> 0:12:09.040 you you know, work at Credit swee exactly, Mary, and 0:12:09.120 --> 0:12:12.200 how much do we know how much they have in 0:12:12.200 --> 0:12:15.120 total assets under management? Because it was like ninety billion 0:12:15.760 --> 0:12:20.080 dollars that left, right, Yeah, so at the end of 0:12:20.120 --> 0:12:22.839 three Q they were looking at around I think one 0:12:23.120 --> 0:12:29.079 point four trillion across their wealth management businesses. UM, so 0:12:29.160 --> 0:12:31.959 it's it's it's a it's a decent amount that's gone down, 0:12:32.000 --> 0:12:35.520 but it's it's you know, as Alison was saying, you know, 0:12:35.640 --> 0:12:39.240 it could come back, especially if the client hasn't totally 0:12:39.280 --> 0:12:42.200 left the bank, Um, they'll they'll eventually come back when 0:12:42.200 --> 0:12:44.800 they feel that the bank can offer them what they 0:12:44.880 --> 0:12:48.080 need and offer them stability. Um. So it's definitely a 0:12:48.120 --> 0:12:50.440 dip down, especially when you compare it to UPS, which 0:12:50.440 --> 0:12:52.880 is looking at three trillion working Stanleys more in the 0:12:52.880 --> 0:12:56.719 four to five trillion range in terms of wealth management assets. 0:12:57.200 --> 0:12:59.760 So it's it's you know, they're starting to look a 0:12:59.800 --> 0:13:02.960 lot smaller than they used to be. Marrying you're based 0:13:03.080 --> 0:13:06.800 insert You've got to feel for, you know, kind of 0:13:06.840 --> 0:13:10.480 what's going on within the country here. How much is 0:13:10.520 --> 0:13:13.240 it I don't know, for the national government or just 0:13:13.320 --> 0:13:15.160 the people or the country, is this is kind of 0:13:15.280 --> 0:13:19.400 like a national embarrassment or how concerned are they about 0:13:19.440 --> 0:13:25.199 what's happening to the once great credit Swiss name. Definitely 0:13:25.240 --> 0:13:27.679 for you know, private banking. This is a private banking country, 0:13:27.800 --> 0:13:30.880 So for private banks across the country and the people 0:13:30.920 --> 0:13:34.000 in the industry, it's not a good look. Everybody feels 0:13:34.000 --> 0:13:36.480 like they're suffering, you know. I've I've talked to private 0:13:36.520 --> 0:13:40.840 bankers at competitors who are having to defend Swiss private 0:13:40.880 --> 0:13:44.000 banking to their clients internationally, even though they don't even 0:13:44.000 --> 0:13:46.480 work at Credit Suite, So there's a little bit of 0:13:46.520 --> 0:13:49.560 you know, having to to grapple a bit with the 0:13:49.600 --> 0:13:52.480 reputational hit that the bank has had and that has 0:13:52.520 --> 0:13:57.160 had on the whole country in terms of you know, politicians, government, etcetera. 0:13:57.520 --> 0:14:00.000 It is definitely something that's on top of mind because 0:14:00.080 --> 0:14:02.360 you have one of your big champions and banking is 0:14:02.400 --> 0:14:05.400 a huge part of GDP here in Switzerland. UM, that's 0:14:05.480 --> 0:14:10.040 really undergoing kind of an embarrassing suffering that goes from 0:14:10.040 --> 0:14:14.200 mismanagement to scandals despiring to just problems in business and 0:14:14.240 --> 0:14:19.840 then risk implodion. So Allison, UM, somebody's going to take 0:14:19.840 --> 0:14:24.120 advantage of the situation, right, another bank has to be 0:14:24.240 --> 0:14:28.640 holding now those nine billion, and then some who's benefiting 0:14:28.760 --> 0:14:32.840 from the problems that credit sweez so UBS is the 0:14:32.840 --> 0:14:38.680 one UM that that has featured in some Bloomberg News reports. UM. 0:14:38.720 --> 0:14:43.320 Their management actually has spoken as well and said, UM, 0:14:43.800 --> 0:14:46.080 the comments are along the lines of, yes, some money 0:14:46.120 --> 0:14:47.960 is coming to them, but they're not you know, it's 0:14:48.000 --> 0:14:52.280 not something that they're proactively seeking and it's not UM 0:14:52.320 --> 0:14:56.320 you know, they're not looking to benefit UM from their 0:14:56.320 --> 0:15:00.640 peerist troubles. But there is some money flowing there. Uh, 0:15:00.640 --> 0:15:03.080 And as I said, it's not the clients leaving, but 0:15:03.120 --> 0:15:07.000 the clients are diversifying. So it would make sense UM 0:15:07.040 --> 0:15:12.560 to be diversifying UM across the close competitor UM. But 0:15:12.680 --> 0:15:16.640 I think that and you know when when we did 0:15:16.680 --> 0:15:20.120 get that eight billion number, to put it in context, 0:15:20.640 --> 0:15:24.080 that those outflows were basically more than the inflows of 0:15:24.120 --> 0:15:26.320 the past two years combined from credit suites. And I 0:15:26.320 --> 0:15:30.680 think that's what really took people, took people back, But 0:15:30.880 --> 0:15:34.240 it is it is something of UM. You know, it 0:15:34.320 --> 0:15:37.960 was news I guess too two investors when they announced 0:15:37.960 --> 0:15:41.560 it last week, but it really related to early October. 0:15:42.240 --> 0:15:45.880 And I think that just the fact that things that 0:15:45.920 --> 0:15:50.200 are studied and they're heading in the right direction. UM. 0:15:50.560 --> 0:15:55.760 It will help UM eventually gives give some studiness to 0:15:55.760 --> 0:15:59.960 to the shares. We are awaiting comments from President Biden 0:16:00.000 --> 0:16:03.800 from Washington, d C. Commenting about the the averting the 0:16:03.920 --> 0:16:06.480 rail strike, and we'll bring those two in just moments 0:16:06.520 --> 0:16:09.400 when he appears. Als. I wanted to ask you just 0:16:09.480 --> 0:16:12.640 about Credit sweet. I mean, you know, when I was 0:16:12.680 --> 0:16:15.560 there back in the day, we consider ourselves a bulge 0:16:15.600 --> 0:16:18.560 bracket firm. We could compete with anybody anywhere in the world. 0:16:18.800 --> 0:16:22.480 Are those days gone for Credit Swiss. I think it's 0:16:22.520 --> 0:16:26.280 it's a tough time for them. But I think that um, 0:16:26.320 --> 0:16:28.440 you know, and you know, and you're the business you're 0:16:28.480 --> 0:16:31.960 referring to is really the the investment banking part of it, 0:16:32.720 --> 0:16:36.160 which for everyone has been a very difficult year. I mean, 0:16:36.200 --> 0:16:37.960 if you look at the industry while it is down 0:16:38.880 --> 0:16:42.600 or so, and especially on the equity side of things, uh, 0:16:42.760 --> 0:16:45.120 you know, I P O s or something like of 0:16:45.120 --> 0:16:48.400 what they were uh last year. So I think that's 0:16:48.440 --> 0:16:52.720 been tough for everyone. And you know, Credit Sweets is 0:16:53.240 --> 0:16:57.400 taking this approach. They're going to spin out their investment bank. 0:16:57.440 --> 0:17:00.640 They're bringing back the name Credit Sweets First Boston. UM. 0:17:00.880 --> 0:17:03.040 They also had some comments this morning that they are 0:17:03.080 --> 0:17:06.200 getting interest in that unit. So so again that's a positive. 0:17:06.720 --> 0:17:09.680 And I think by trying to spin out the bank 0:17:09.720 --> 0:17:12.840 and separate the bank out um from some of the 0:17:12.840 --> 0:17:17.840 businesses that have given them a little bit more UM pressure, UM, 0:17:17.840 --> 0:17:22.080 they're hoping that they can isolate that. And so it's 0:17:22.320 --> 0:17:27.000 it's gonna be tough to see when the environment is bad, um, 0:17:27.040 --> 0:17:30.280 you know, it's tough to make a turnaround. It's tough 0:17:30.320 --> 0:17:35.040 to make a turnaround when the market's going against you. Um, 0:17:35.119 --> 0:17:39.119 but we'll see how that plays out. Marian, tell us 0:17:39.119 --> 0:17:42.800 a little bit about Zurich. Right now we have you know, 0:17:42.840 --> 0:17:45.040 at this time of day, probably most of our listeners 0:17:45.080 --> 0:17:47.640 are are in the US. It's a little bit later obviously, 0:17:47.720 --> 0:17:51.040 six hours later where you are five hours later in London. Um, 0:17:51.880 --> 0:17:55.800 the main what square is it? Paradha plots? What do 0:17:55.800 --> 0:17:57.680 you what do you call it? Is that where ubs 0:17:57.760 --> 0:18:00.720 and credit? Is that where all the bank all the 0:18:00.840 --> 0:18:05.600 private wealth managers are located, many of them? Yes, we 0:18:05.640 --> 0:18:09.240 have we have pie not so far Julia Sparry if 0:18:09.280 --> 0:18:14.080 g uh Saffra is also around the corner. And and 0:18:14.200 --> 0:18:17.800 what's what's the environment like? I mean here in New 0:18:17.880 --> 0:18:21.120 York on Wall Street, everybody's worried about bonuses. I guess 0:18:21.119 --> 0:18:23.520 it's got to be much worse. They're considering the problems 0:18:23.520 --> 0:18:26.000 that credit sweete. Although maybe ubs bankers are doing well. 0:18:28.200 --> 0:18:30.560 I think the mode is definitely around, you know, trying 0:18:30.600 --> 0:18:32.480 to get to the end of the year and hopefully 0:18:32.480 --> 0:18:35.280 turn a page and move on to three and hopefully 0:18:35.320 --> 0:18:37.679 things go up from there. Um. You know, it's been 0:18:37.760 --> 0:18:40.639 it's been a hard year for everybody across the industry, 0:18:40.640 --> 0:18:43.520 as Alison was saying, and that that includes wealth as well. 0:18:43.560 --> 0:18:46.120 I mean, you know, with the stock markets not doing 0:18:46.160 --> 0:18:48.200 as well as they have previously, that means a lot 0:18:48.200 --> 0:18:51.520 of billionaires have lost some wealth. Um, and that definitely 0:18:51.560 --> 0:18:54.840 is impacting both you know, ubs and credit sweetes among 0:18:54.880 --> 0:18:57.919 other private banks in terms of asset outflows and and 0:18:58.000 --> 0:19:00.640 just a little bit of nervousness around market. Right So 0:19:01.640 --> 0:19:04.840 you know, just like bonuses on Wall Street in New 0:19:04.920 --> 0:19:07.720 York might not be looking so great, I think, um, 0:19:07.880 --> 0:19:10.639 a lot of bankers and private bankers in Switzerland product 0:19:10.720 --> 0:19:14.280 lats will be anticipating, you know, looking at that and 0:19:14.280 --> 0:19:16.359 maybe not being so pleased at what might be coming 0:19:16.400 --> 0:19:21.280 for them as well. Is the Swiss finance industry, you know, 0:19:22.160 --> 0:19:25.119 centered in Zurich or is a lot of it in Geneva? 0:19:25.240 --> 0:19:28.439 I know I always hear about you know, hedge funds, funds, 0:19:29.400 --> 0:19:32.480 guys and women working in SOUG. Is it spread out 0:19:32.560 --> 0:19:35.280 or is it is it all there? It depends what 0:19:35.359 --> 0:19:37.520 part of the fine industry you're looking at. When you're 0:19:37.560 --> 0:19:40.720 looking at the global quote unquote investment banks which were 0:19:40.760 --> 0:19:43.680 ubus and credit spees which are both now more wealth management. 0:19:43.760 --> 0:19:47.440 They're they're very Zurich based UM, but private banking has 0:19:47.480 --> 0:19:50.439 historically been very big in Geneva. Now it's become a 0:19:50.440 --> 0:19:53.159 little bit more split between Geneva and Zurich. And then 0:19:53.200 --> 0:19:55.399 if you look at hedge funds, yes, you're still looking 0:19:55.400 --> 0:19:58.280 at some of the smaller towns just outside of Zurich, 0:19:58.400 --> 0:20:01.159 like Zoom. You mentioned UM, and then a lot of 0:20:01.200 --> 0:20:05.120 commodity trade finance is also in Zoogan and in around Geneva. 0:20:05.200 --> 0:20:07.800 So we're a little bit split between the two sides. Yeah, 0:20:08.000 --> 0:20:10.920 So Alison, you know, aside from Credit Swiss, the other 0:20:11.000 --> 0:20:13.439 name out of Europe that is just as intriguing to 0:20:13.480 --> 0:20:15.719 me is Deutsche Bank. I mean, at one time they 0:20:15.720 --> 0:20:20.320 were absolutely you know, in the top five seven globally 0:20:21.080 --> 0:20:25.280 in terms of global investment banks, commercial banks. Where are 0:20:25.320 --> 0:20:28.359 they now? Give us the latest on Deutsche Bank? I think, 0:20:28.440 --> 0:20:31.399 you know, Deutsche Bank is is uh is perhaps the 0:20:31.440 --> 0:20:33.800 future that credit suites can look forward to in a 0:20:33.840 --> 0:20:37.640 way they uh, you know, sort of left behind. We're 0:20:37.640 --> 0:20:39.520 gonna try to be all things to all people and 0:20:39.520 --> 0:20:41.919 said we're going to pick our shots and focus on 0:20:41.960 --> 0:20:46.040 those businesses. And they really have focused in on fixed 0:20:46.080 --> 0:20:49.480 income trading. They you know, largely get out of the 0:20:49.480 --> 0:20:52.080 equities trading business. They do have sort of a small 0:20:52.080 --> 0:20:56.399 effort that supports UM their capital markets franchise, but they 0:20:56.480 --> 0:20:59.760 really said we're gonna focus on fixed income trading, and 0:21:00.560 --> 0:21:03.439 you know they when they made that decision, it was 0:21:03.680 --> 0:21:06.640 a tough market, a tough time for fick UM. But 0:21:06.720 --> 0:21:09.720 as that's improved, they have really sort of ridden the 0:21:09.720 --> 0:21:12.240 wave and if you look at their numbers, they are 0:21:12.240 --> 0:21:16.040 showing that they are competing in that business. So not 0:21:16.160 --> 0:21:18.879 everything to everyone, but but winning in the business that 0:21:18.920 --> 0:21:23.680 they want to. All right, well, we'll continue to cover 0:21:23.720 --> 0:21:27.159 obviously what's going on at credit Sweets and UH it 0:21:27.200 --> 0:21:29.880 did seem for a while like it was in the spotlight, 0:21:30.280 --> 0:21:33.919 UM in terms of problems. Now, UM, we're looking across 0:21:33.960 --> 0:21:37.520