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Why is it the money people bite the hand that feeds them
January 17, 2017

Joined: March 24, 2015
Posts: 35
Why is it the money people bite the hand that feeds them

January 17, 2017

Bob, let me give you an example of my experiences whilst working in the City. In 2004, the company that I worked for took over Foreign and Colonial Asset Management. The deal was obviously that we would pay the market price for this company. They weren't a listed FTSE company. Before I go into the fine detail. F&C were sold 5 years before to a Pan European company that we had an interest in. At the time the CEO Bob Jenkins (A Yank) received £ 6 million as his part of the deal. Pretty good money. Then we came along in 2004. The deal was done and we bought them. However, F&C had a scheme going where each year every member of staff was awarded shadow equity (Notional shares) at no cost. Not illegal I should say. Depending on your position depended on how many notional shares you were awarded. After the deal was done and the new company was launched on the markets, the price on the launch was the value of the shares. Bob Jenkins received £5 million for the shadow equity that he received. In addition to this, he was also given £2 million as salary for the period April until the 12th October (ratification day) He then became the non-exec Chairman. Coining in even more. Nothing here was illegal. From our point of view the new company had £132 billion under management and this is why we acquired them. With the role that I had, I had dealings with him. I found him a total barbarian. It was greed all the way. Interestingly a good friend of mine who was the Director of Ops said to me, "Why is it that when we take over a company we never get the deals that the others get" I should also say that although the F&C heads of Investments got all the main jobs, they badly underestimated our CEO Howard Carter who came from the Kingdom of Yorkshire and had had the charisma by-pass. He got rid of them all within 9 months. I could tell you more about the greed that I came across. Always remember that when companies are taken over the first thing that's decided in the boardroom is what's in it for me. Alfie.

January 17, 2017

Joined: May 12, 2014
Posts: 685
Why is it the money people bite the hand that feeds them

January 17, 2017

Greed is an almost natural human failing, given the opportunity to enrich oneself  the overwhelming percentage of the human race would do so. Greed also breeds more greed. Capitalism is built on greed, it wasn't necessarily predicated to be so but it has certainly evolved as such. I am never surprised to read of the insider dealings, the legal or illegal shenanigans of bankers, big businesses, global companies et al. But let's ponder for a moment on the alternatives available to us. Communism? It has failed abjectly everywhere. China and Russia the erstwhile biggest proponents of it are now well and truly mired in a pseudo capitalist society whilst still trying to pretend otherwise. North Korea? No words needed. So let's return to Bob's point about the capitalist  bankers wreaking havoc with currency exchange rates etc. Sorry to say it isn't quite as simple as that. The strength of the £sterling us dependent on the confidence the rest of the world has in our economy. The currency markets are fickle and highly strung. Bankers per se do set their own bank's base rates but these are predicated on the global currency exchange rates. Banks are there to make money. Just like any other trading entity. They make money inter alia from buying and selling currencies. They sell at a high rate and buy back at a lower rate. The secret is NOT to buy currency from a bank. Our capitalist society affords us the opportunity to buy money elsewhere. In our local high street, the day before yesterday, Lloyds was buying euros at 9p per euro less than one of our local travel agencies, it was selling them correspondingly higher. My, perhaps laboured, point is we can blame the banks all we want but the Government's actions dictate what happens to our currency and the more "startling and unsettling" announcements that are made the greater the loss of confidence in sterling with the fall in its value against other currencies. I believe it will all come good in the end. At present the hard Brexit announcements have unsettled the markets but as time progresses confidence will return. The FTSE and trade figures are riding high, low exchange rates are good for exports but sadly bad for holiday makers and imports. Might be getting near the time to ditch some of my Euros hoard!  

January 18, 2017

Joined: May 8, 2014
Posts: 1205
Why is it the money people bite the hand that feeds them

January 18, 2017

Points taken ,can you remember all the "gloom and doom " on the build up to Brexit ,other than going down the drain the country had employment figures the government would die for,the big multinationals were setting up businesses in the U.K. The BBC is still the gloom and doom merchant ,after watching T M speech on what the terms of Brexit for leaving,the only negative interviewer was that Scottish political from the Beeb . The guy from the Times  was asking positive questions so the PM was more relaxed and gave honest answers. Well now let's see what the money people do now the plan is out there .

January 18, 2017

Joined: March 24, 2015
Posts: 35
Why is it the money people bite the hand that feeds them

January 18, 2017

Bob, All the banks that said they will move out will remain. They are all wind and piss. London is the clearing house and centre of lending for Europe. To move an operation from the City or Canary Wharf would cost them millions. These companies are all tied into long leases. They may decide to move but they still have to pay the rent on the space that they have unless they can off-load it. An example of rents, we paid £2million per annum for space that we leased in Wood Street. This didn't include service charge and business rates. We took over F&C and then inherited their lease. Luckily we got rid of Wood Street but were still liable for the head lease.  The business is done here. The EU countries may try to entice traders to go but who would want to uproot their families to Frankfurt? The companies would lose good traders who tend to move on every few years anyway. As for the Governor of the BoE, I've said from the beginning that he should go. He's mister gloom and doom. Finally look at Dresdner bank. the pride of Germany! Just received a big fine from the US Dept of Justice. It's a disaster. All these European banks are sitting on the edge. Name a major Investment house in Europe? When I left, our CEO was Belgique, so was the Chief operating officer. the head of the Bonds team came from the Netherlands. I could go on. Why were they working in the City? The Mazooma! More than they would ever earn in these piddly countries that have no major financial centres. I rest my case.

January 18, 2017

Joined: May 12, 2014
Posts: 685
Why is it the money people bite the hand that feeds them

January 18, 2017

Didn't hear that Dresdner bank had been fined Alfie, they were bought out by the Commerzbank in about 2007/8. The big issue with German banks lies with Deutsche Bank, the largest of its financial institutions. IT faced uncertainty last year after it was fined sonewhere around 15 billion US dollars for misselling mortgages in the lead up to the big global financial crash.The fine and the resultant share price crash could have wiped them out but the Bundestag stepped in and propped them up I believe. Bit like we did with RBS. Your other points apropos London and the financial services is absolutely right, furthermore the recent announcements that a EU witchhunt on us over Brexit could induce us to create a tax efficient trading and financial haven will have done little to even start bankers minds moving in any direction other than towards us.

January 19, 2017

Joined: March 24, 2015
Posts: 35
Why is it the money people bite the hand that feeds them

January 19, 2017

David, You're right it was Deutsche bank. My mistake. This is what happens when I come on line and rush a response. I'm sure all our readers who are waiting with bated breath re this riveting subject will be disappointed that we do make mistakes. I see that HSBC and UBS are threatening to move jobs out of London. Although the jobs will go, the traders won't move. They'll just move to another trading house. HSBC has been threatening this for some time. Perhaps, taking their historical links with Shanghai they should move to China. Maybe not a good idea, they shoot fraudsters and corrupt people in the back of the head there. Too risky!  As for UBS, their Chairman said some time ago that they would move 1,500 jobs out of London. He's now saying that this number will be lower. Taking UBS's track record they won't be missed. This comes from the BBC. Not exactly impartial are they! All lefties. They want Brexit to fail.

January 19, 2017

Joined: May 12, 2014
Posts: 685
Why is it the money people bite the hand that feeds them

January 19, 2017

The new found confidence of Government in standing up to the posturing and threats of the Eurocrats is refreshing and long overdue. Watching Question Time this evening I found myself agreeing with a Piers Morgan, ( shock, horror) when he said precisely that. He was of course taken to task over that stance by the SNP and Labour but the heavy applause from the audience told its own tale. TM is not stupid, she has met with the leading Banks' CEOs. Alfie is quite correct, The UBS CEO has reduced the number of  staff relocations he promised some  time ago, no surprises there. The banks know where they are well off, the future of the EU is far more uncertain than the future of the UK, we KNOW our direction of travel, the EU is frightened of disintegration, death by a thousand cuts. We are forging trade deals globally, the EU is being threatened by the US and others who see a free trade Britain as a major new market to deal with devoid of EU tariffs to non EU countries. Time to get going!!        


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