Morning Coffee: JPMorgan and Goldman Sachs want to hire a new breed of traders.

Morning Coffee: JPMorgan and Goldman Sachs want to hire a new breed of traders.

UBS Credit Suisse's new 'cultural filter' for bankers In times of economic downturn, it becomes even more important to identify growth markets so that you can align your career with skills that are in demand. Morgan are planning to set up new desks for secondary retail credit trading therefore means that all sales and trading staff living in far-flung areas will be forced into this sector.

This suggests that the types of traders who get jobs at new desks are the ones who demonstrate the ability to deal with illiquid markets where trading is sparse, spreads are wide, and there are no two-way courses. This is the exact opposite of high-frequency trading. Private credit transactions can remain on the books for weeks or even months, leaving the trading department to bear the impact on profit and loss of what happens during that time. Bankers entering the private credit business are likely familiar with the voice of the risk management department.

But what makes the market attractive to sellers is that the spreads are wide and there is a huge opportunity for self-profit. What do customers get out of it? The answer seems to be an opportunity to exit positions they no longer want, but as monetary policy tightens and the economic outlook worsens, the industry is likely to grow.

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Of course, in reality, obtaining a loan from someone who originated the loan (and therefore probably knows more about the loan than you) is one of the riskiest things you can do in the market. It's probably no coincidence that JPM and Goldman initially created their own private lending teams to deal with the problem. In addition, both companies trade significantly in secondary holdings in private credit funds themselves, which would provide another source of information. When a customer sells an asset, it is helpful to know whether something happened to the asset or to the customer.

This can be considered a new stage in the maturation of the private lending industry. When a deal is as big as the $5. 5 billion Carlyle loan completed last year, it's difficult to realistically keep it private or not develop a secondary market. Overlap with the more specialized parts of the high yield market should support this part of the credit trading industry in the short term.

Elsewhere, UBS's Colm Kelleher told Credit Suisse bankers that when deciding who to keep after the merger, they would "make sure we don't bring anything into our ecosystem that will cause problems. He warned that "cultural filters" would be applied. The elegant phrase "cultural filter" seems tailor-made for Swiss sensibilities, but what Jeffries' Rich Handler and Bob Diamond (formerly of Barclays) called the "no jerk" rule, and Paul - Refers to the same process applied by Purcell RW Baird. It had a sharper name. Recently we discovered that friendly UBS bankers care about the reputations of their colleagues.

On the other hand, there is also the possibility of something more serious.

A Senate committee yesterday announced allegations that Credit Suisse bankers violated the terms of a previous settlement and continued doing business with U.S clients accused of tax evasion. If this results in further fines or settlements, it will ultimately be UBS who pays them, so perhaps Colm Kelleher's "filter" will be used by those who may cause compliance problems in the future. The emphasis will be on excluding.

Meanwhile…

Some consulting and quantitative firms spend all day tinkering with ChatGPT.

Every industry has workers who use ChatGPT all day long, and professional "instant engineers" do this as a job. At least one position is listed with a maximum salary of $335,000, but most employers in the industry call it "ridiculous" and have the rare ability to document a useful application with an actual career record. It looks like a lot of money is being made by people. Rather than a large archive of rap parodies. (Bloomberg)

With an innovative and disruptive business model, Greg Fasano promises that if you pay $140,000 a month for a short-term rental property in New York, you can live the "lifestyle of a rich New Yorker." Huge if true. (WSJ)

Good CS bankers who don't want to be exposed to 'cultural filters' seem to be finding more opportunities elsewhere – Citi has appointed Maarten Swart, head of capital markets and advisory in the EMEA retail and consumer sector

Sophie Van Cleef has been hired as co-head, managing director of a food and beverage company. (Economic news)

Citi is also hiring new staff to expand its sterling rates division, although it did not disclose numbers. This may not be a clear sign for the UK market.The reason seems to be that the UK made a lot of money on volatility last year and wants to do the same again.(Bloomberg)

"Wall Street vs Main Street." But while most main streets in America have at least one bank, Wall Street is gradually being taken over by luxury apartments.

(Bloomberg)

Perhaps largely related to the "cultural filter," Claire Tucker, head of trading at UBS Hedge Fund Solutions, spoke in an interview about the importance of work-life balance and Even spoke about UBS's supportive environment. (Economic News)

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