We’re finally getting into the dog days of August, but things are in full swing at the Business Insider newsroom.
In one of the wildest stories of the week, a bank in Denmark is offering borrowers the chance to take out mortgages at a negative interest rate, effectively meaning that it will pay customers to borrow money. Jyske Bank, Denmark’s third-largest bank, said this week that customers would now be able to take out a 10-year fixed-rate mortgage with an interest rate of -0.5%.
As our UK-based reporter Will Martin explained, “to put the -0.5% rate in simple terms: If you bought a house for $US1 million and paid off your mortgage in full in 10 years, you would pay the bank back only $US995,000.”
As Will points out, it may seem counterintuitive for banks to lend out their money at such low rates – but there’s rationale behind it. Financial markets are super volatile right now, thanks to the US-China trade war, Brexit, and a broader global economic slowdown.
Many investors fear a big market crash in the near future. So some banks are willing to lend money at negative rates and take a small hit rather than risking a bigger loss by lending money at higher rates that customers can’t pay back.
In other finance news, Wall Street’s fastest traders are using their tech to improve how big investors trade foreign companies like Nintendo and Rolls-Royce, and here’s how the wealth-tech startup Harness Wealth is helping advisers battle Betterment and Wealthfront for trillions in millennial and Gen X assets.
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JPMorgan is the biggest bank in the US and a bellwether for the global financial system. So when it comes to the bank’s most senior leaders, and particularly those in position to replace CEO Jamie Dimon, Wall Street pays attention.
Business Insider identified the lender’s 70 or so most important executives. We compiled the list by speaking with current and former employees, competitors, and recruiters, focusing our search on the operating committee and an executive cohort one level down at JPMorgan’s four business units.
Meet Karen Fang, who just landed a big promotion at Bank of America running a new trading team and is described by insiders as a rising star
A relatively rare occurrence just three years ago in credit markets, billion-dollar trades packaged with hundreds of different bonds are now happening every week.
In July, Bank of America went live with a new desk in its fixed-income division geared toward capitalising on the growing trend of massive exchange-traded-fund and portfolio trades.
The new team is being run by star executive Karen Fang, a Goldman Sachs alum who Chief Operating Officer Tom Montag recruited in 2010 to run a “SWAT team” called cross-asset solutions and strategies.
Fang, who ran fixed income, currencies, and commodities sales in the Americas before the recent promotion, discussed the new team in a recent interview and explained why Bank of America believes it will help them win over clients and grow revenue.
We talked to 7 insiders about the $US27 billion Refinitiv-LSE deal. Here’s how one of the biggest data deals of the year came together.
The London Stock Exchange has agreed to a $US27 billion deal to buy the data provider Refinitiv, just a year after the company was spun out of Thomson Reuters by the private-equity firm Blackstone.
The deal is being led by some of the biggest names in mergers and acquisitions in London, including Goldman Sachs, Morgan Stanley, and Evercore.
A media report about the deal talks triggered a scramble to get in front of the news, followed by a final sprint of negotiations and legal work, with lawyers and bankers holed up in a London law office to hammer out specifics.
Conditions were less than ideal. One person said a mouse was seen scampering across the law-office floor on at least two nights over a five-day period to get the deal done.
“I am taking August off,” one adviser said of the deal’s announcement. “I’m exhausted.”
Credit Suisse has started an informal hiring freeze – and it’s a sign of just how tough the Wall Street job market is these days
Credit Suisse has enacted an informal hiring freeze across some parts of its sales, trading, and research unit, according to people with knowledge of the matter.
The Swiss bank has limited hiring in its research division to only analysts and associates, according to one person with knowledge of the matter. Hires for director and higher are being discouraged, the person said.
On some teams, managers have interviewed candidates only to be told at the end of that process that they couldn’t hire anyone because of an informal policy against it, two of the people said.
Seduced by WeWork’s sky-high valuation, coworking firms have multiplied. A shakeout could see them merge, shutter, or specialize.
As coworking grows more popular and attracts billions in venture-capital money, some experts say the field is getting too crowded, and the options in a shakeout may be to merge, shutter, or specialize.
Coworking and flexible-office-space companies have been around for far longer than 9-year-old WeWork, and the industry has a history of mergers and acquisitions.
An alternative to scaling up is finding a specific sliver of the market to serve, some industry experts said.
The fintech startup Blend recently closed a $US130 million funding round with two lead investors, trouncing Chief Financial Officer Marc Greenberg’s expectations for one lead and a haul of $US75 million to $US100 million.
Big banks have been turning to fintech startups like Blend that promise to help make cumbersome processes like mortgage lending easier.
To win investors over in its latest round, Blend couldn’t just pitch a broad vision, it had to produce hard metrics to prove customers would pick and stick with its products.
Wall Street move of the week:
- ‘Not investing in China is very risky’: Billionaire investor Ray Dalio explains why he’s still all-in despite recent trade-war fireworks
- ‘Follow the bubble’: Famed investor David Rosenberg breaks down the unique way he thinks the next US recession will unfold
- An acclaimed millennial financial adviser who’s a partner at a $US1.3 billion firm breaks down his favourite approaches for building wealth for young professionals
In tech news:
- Lyric, which raised $US185 million from backers like Airbnb and Fifth Wall, shares its secret sauce for Instagram-worthy rentals
- The definitive story of how a controversial Florida businessman blew up MoviePass and burned hundreds of millions
- Instagram’s lax privacy practices let a trusted partner track millions of users’ physical locations, secretly save their stories, and flout its rules
Other good stories from around the newsroom:
- Meet the 30 young leaders who are transforming the future of healthcare and disrupting a $US3.5 trillion industry
- ‘It’s a once in a decade opportunity’: How top VC firms like Greycroft and Lerer Hippeau are cautiously opening their doors to the potentially $US194 billion cannabis industry
- This serial entrepreneur wants to destroy LinkedIn’s ‘monopoly on recruiting,’ and he’s got Golden State Warriors star Klay Thompson backing him