All Articles Finance Modern Money While You Were Working - April 5

While You Were Working – April 5

Dimon says a whole lotta nuthin, Equities arms race ... sort of, Wells Fargo at it again, HSBC's worst enemy nabbed in Spain, and What's in a name?

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Modern Money

Jamie Dimon

Jamie Dimon cooks up a nothing-burger. (Eric Piermont/AFP/Getty Images)

When Jamie Dimon talks …

… people listen. Jamie Dimon’s annual letter to shareholders has taken on more than a bit of Warren Buffettesque grandeur in recent years. The missive from the Prince of Wall Street is covered by the press in much the same way as the letter from the Oracle of Omaha.

This year was no different. As you can read here, here, here, here, here, and here.

But did Dimon really say much of anything? I mean, his themes are always pretty much the same:

  • Regulation=Bad
  • Innovation=Good
  • Bureaucracy=Bad
  • Trade=Good
  • Taxes=Bad
  • Cybersecurity=Important
  • Policymakers=Usually Fools
  • Risk=Always good in doses

While playing all his greatest hits, Dimon curiously made no mention of the verbal war between President Trump and Amazon. Seeing as how JPMorgan Chase is partnering with Amazon and Berkshire Hathaway on its health care venture (there’s that Buffett guy again), it seems like Dimon’s views on that particular fracas would have been worthy of inclusion in his letter. Oh well… at least we know he thinks cybersecurity is still important.

All banks aren’t created equal in equities

Here is a deep dive from Bloomberg about the battle going on among Wall Street titans to grab a greater share of the equities market. Contrary to the headlines, the battle is only partially about technology; it has a lot to do with strategy. Sure, the banks had to update their technology to better serve clients, but the technology used in the equities space often pales in comparison to the technology deployed in other corners of the markets. The real story is that executives had the vision to play the long game on equities.

I remember Morgan Stanley Chairman and CEO James Gorman talking about how his firm was going to remain focused on wealth management and equities during his talk at the SIFMA Annual Meeting … in 2010.

Possible shakeup at Deutsche Bank

Not the shakeup everyone has been talking about. This one.

What’s in a name?

This is a great look at how literally the name of their major can have a dramatic impact on work visa prospects for foreign students studying economics. Schools are now tweaking the name of majors that used to be known as “economics” to things like “econometrics” and “quantitative economics” because students studying in STEM-related fields are eligible for longer work visas.

And the last line of the article is a gem:

“Whether students are being taught economics or econometrics, they are getting a fine worked example in regulatory arbitrage.”

That line is a real quantitative classic.

Man on the run

The plight – not flight – of Herve Falciani continues. For those of you who don’t remember Falciani, he is the former HSBC worker who collaborated with authorities 10 years ago by giving them information about HSBC clients he believed were evading taxes. Although many of the files Falciani shared led to indictment, Swiss authorities have never stop trying to apprehend him because they say the files were stolen. Even HSBC itself was indicted in France on charges related to the files Falciani provided.

But the Swiss are still after Falciani and today he was arrested in Spain. However, a Spanish judge released Falciani without bail and ordered him to turn over his passport so he couldn’t leave the country.

Considering the extradition Cold War currently underway between Spain and Switzerland over former Catalan leader Carles Puigdemont, Falciani might become a chip that ends up being traded so that the Swiss will send Puigdemont to Madrid. I hope that isn’t the case because Falciani’s deeds shed light on a whole lot of wrongdoing at HSBC by people who are actually … you know … bad people.

In the meantime, I can think of a lot of worse places than Spain for Falciani to be stuck.

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