Morgan Stanley has sort of given up.
So yesterday on Bloomberg TV a hedge fund recruiter said that there's a "chasm" between the pay at top hedge funds (high, getting higher) and at Wall Street banks (meh), and that "maybe it's time to stop comparing the sell-side to the buy-side." And then Morgan Stanley wealth management president Greg Fleming agreed! He said:
“Morgan Stanley has a lot of people, we’ve got 55,000 employees and we’ve got a lot of people working with clients, doing a good job for those clients, and they’re well compensated for those roles,” Fleming said. “It’s apples and oranges.”
That's the same as saying "maybe it's time to stop comparing the sell-side to the buy-side"! Also he said "The Street and Morgan Stanley still employ some traders that are very good in specific areas," and I can't even. Morgan Stanley is really pushing this safe boring risk-free wealth management angle hard.
Citi will protect your weekend.
The market is stabilizing around 36 hours of time off each weekend for junior bankers, with Citi giving them off from Friday at 10 p.m. until Sunday at 10 a.m. That roughly matches Goldman's 9 to 9 vacation. JPMorgan's one full weekend a month still has an outlier appeal, but what will Credit Suisse do with its now above-market 40 hours of weekend? Cut it back? Or attract all the best junior bankers and become the leading banking powerhouse, except on Friday nights?
Let's all cash our checks at the post office.
Here is an appealing case for postal banking, in which the U.S. Postal Service would provide banky services (check cashing, prepaid debit cards, small personal loans secured by paychecks) to the under-banked, thus both helping lower-income people and finding something to do with all that currently unprofitable Postal Service real estate. It sounds pretty good! It's got the support of a Postal Service Inspector General white paper! Using the government's cheap cost of funds and ability to partner with the private sector to serve the previously under-banked is perennially appealing, which is why the government is trying to figure out what to do with Fannie Mae and Freddie Mac right now. Maybe they'll be privatized on the same day that the post office opens a bank, why not.
M&A settlements are an insurance policy.
Every time there's a merger, somebody sues, and there's a pointless settlement where shareholders get nothing but plaintiffs' lawyers get a six-figure payoff. This is a dumb system but there it is. Meanwhile in a Boston court there is a giant class action lawsuit against all the big private equity firms claiming that they colluded to avoid auctions and drive down the prices of lots of big buyouts over the last decade. I don't know that that case is a winner but it's found some intriguing naughty emails. But it's got one big problem: All those stupid settlements that got shareholders nothing also released everyone from liability in connection with the deals. So you can't sue the private equity firms, even for real antitrust stuff, in connection with cases where they were already sued and settled over stupid stuff. The system worked or something. (I wrote about this a little once before but Alison Frankel is considerably more up to date.)
Marty Lipton likes poison pills.
Like a lot of Wachtell Lipton alumni for some reason, I am skeptical of the poison pill generally, and of its use as a way to prevent shareholders from challenging directors specifically. So I find the new generation of anti-activist poison pills sort of troubling. One person who does not is Marty Lipton, who wrote to the Wall Street Journal to say "The adaptability of the shareholder rights plan is one reason they remain an essential tool for boards fulfilling their duties in the interests of stockholders," and that they are "particularly critical in the face of increased activism in which some hedge funds use aggressive tactics to expropriate short-term benefits at the expense of long-term value-maximizing investments made by corporations on behalf of all shareholders." Maybe that is true, I don't know, but it's fun to imagine what boards could do to shareholders that Marty Lipton wouldn't defend. Like, could Apple's board slip Carl Icahn a literal poison pill? In the interests of fulfilling its duties int he interests of stockholders, of course.
To contact the writer of this article: Matt Levine at
To contact the editor responsible for this article: Tobin Harshaw at