The Brexit Bankers' Dilemma

This piece in the FT last week is very revealing about the state of Brexit.


At Davos, the Chief Exec of Goldman Sachs was joined by the other Chief Execs of US Banks in warning that a Hard Brexit will see them move their European Operations into EU jurisdictions.


As a reminder, Goldmans actively financed Greece to the point of bankruptcy, shorted the CMBS and RMBS bonds that created the Great Financial Crash and then begged the Fed (run by an Ex-Goldmans alumni, natch) to bail out AIG which owed it billions of Credit Default Swaps such that its collapse would have taken down Goldmans too. There are newer scandals over Aluminium and other commodity hoarding, but the charge sheet is long enough.


So, anything told by a Goldmans CEO is every time and always talking their own book. The US Banks have a big dilemma, none of the Execs they send to Europe want to work or locate their families anywhere but London. At the moment, strikes are threatened and even enacted every time Paris is mentioned.


This is a big headache, one might have thought the Banks would do well to lobby the cause of the problem, the EU, who after all are the ones insisting on Hard Brexit, thanks to their overblown commitment to the four freedoms.


Anyway, the Banks whine on in the article how about how tough life is for them and why they are annoyed that their special pleading is being ignored. Then right at then (this is an FT article after all), they note how Prime Minister May understands their issues perfectly and is quite aware of the real impacts upon them of Brexit.


That must have both killed the journalist to write but also must have ruined the day of the US Bankers - how can they square the circle of not firing their friends and colleagues (read cousins etc)and replacing them with work to rule French people?

Goldman Sachs is scaling back - in New York

Remaoner scaremongering is becoming a thing of legend. Endless stories of horror, few or indeed, any, yet to come true.


The classic one led by the odious British Bankers Association is that all banks are preparing to leave London before Xmas.


The thing is, every single company in the UK, EU and US is using Brexit as a perfect event excuse. Cut salaries - Brexit
Cut costs by firing staff - Brexit
Ripping off Customers - desperation, caused by Brexit.


It is the universal excuse and will remain so until 2020 at least.


Just for balance, here is an article about how Goldman Sachs, said to be considering 2000 jobs in London and whether to 're-locate', is anyway firing 500 odd people in New York. No doubt because of Brexit.


Unfortunately, you can never prove a counter-factual. Goldmans is getting rid of people because its business is changing and the environment is changing. Whether Brexit related or not, the answer will always be Brexit because it suits all management to blame someone or something else other than themselves.


The wider point is that Banking is changing massively, really massively, the internet is fast disintermediating humans from the process of banking and the likes of Blockchain are only going to accelerate this trend. The big bank model is likely on the wane and there will be a big shift in moving to FinTech companies and a more diverse supplier base of services. It is just that as this happens, every job loss will be blamed on Brexit when actually something more interesting, more dynamic, yes...more capitalistic, is occurring. Which will also be more fun to write about than fact-checking remoaner lies.

Goldman Sachs OIl preditions fund

Here the latest Goldman Sachs pontification on future oil prices:

Oil could be at $20 next year.

In 2008, right before the price of oil collapsed, they said this:

Oil super-spike will move it past $200.

It is worse than a 10x differenc really because we should add in the big dollar depreciation of around 10% in the last 8 years.

Really, if there is one thing I know, it is that Goldman Sachs know nothing about predicitng Oil prices; though perhaps they know a little bit more baout how to generate headlines.

Still, a very evil company encouraging bad investments, so not much change there.