May 4 (Bloomberg) -- Citigroup Inc. proprietary trader Jay Glasser quit to join Nomura Holdings Inc., Japanâs biggest brokerage, as U.S. lawmakers pressure domestic banks to stop speculating with their own capital. Glasser, 53, who was based in New York and specializes in derivative and currency trades linked to Japanese interest rates, generated an average of more than $10 million a year of revenue for Citigroup from 2007 through 2009, people with knowledge of the matter said. He started at Nomura last week and is based in New York, said Peter Truell, a spokesman for the Tokyo-based firm. Glasser told his former bosses at Citigroup, which has lost at least 10 proprietary traders this year, that he quit partly because of concern that President Barack Obamaâs proposed Volcker rule may force U.S. banks to divest or close proprietary-trading units, people with knowledge of the matter said. As a Japanese securities firm, Nomura wouldnât be subject to the rule. Citigroup is the third-biggest U.S. bank by assets. http://www.bloomberg.com/apps/news?pid=20601087&sid=ae8jYm03IQPU&pos=5
I have mixed feelings about the Chinese wall or the total separation as I do own small C but it does appear regardless of the legislation C is losing what it had in trading (at least from what I have read about the top talent leaving) I see no problem paying a guy $100mil a year if he is bringing in 3x that amount. As a matter of fact I want all the guys I can get like that. For me C was a no brainer at 3.20 and I made some nice money with C but I don't think I will be adding any more and will either write calls against what I do have or just walk away for a while. I always felt that the upside was limited but at < 3.50 I felt that if it "can't" go down then it is basically heads I win and tails I break even. Two tests of $5 later with the belief that MS is going to be moving shares on the market > 4.90 (and/or less) for a while and it is hard to see this going over $5 again anytime soon. It would appear to me that for me covering up with Sep $4 or $5 calls might offer a chance to take a gain while still paying off if this just sits between 4-5 for the next few months.
10 million and star trader? Give me a break, if he averaged 100 million for at least 5 years qualifies as star trader in institutional prop environments not 10 bucks. ;-)
Star trader? wtf. 10 bucks isn't that much at an IB. In that same article it says that fixed income trading generated 21.5 billion in 2009. who cares about his revenue.
When these guys leave that means they take their algos and proprietary information with them? Or they are discretionary?
Usually they just recreate what the knew from their heads, unless they're thieves. Takes a while to bootstrap and bring up the infrastructure over again, but sometimes they can also use the new company's stuff and programmers without too much difficulty.
Most of these stars burn out after leaving the hive especially bankers, hedgies not so much - though look at SAC's spill-offs... plenty that didn't survive after their incubation there. The opportunity to front run clients (whether directly or indirectly by way of liquidity), utilizing analyst reports, and other quasi-legal trading techniques means most of these guys discover they have no edge other than the brand their employer gave them.