Back to Work

I've been on holiday. I'm feeling refreshed, renewed and invigorated - and I'm confidently expecting all that good health and happiness to be dissipated within the next 48 hours. The long faces around here would be quite comical if I didn't expect to be joining their ranks imminently.

Events, events. Bear Stearns - what banker didn't shudder with horror and simultaneously twitch with delight at that great hubristic beast's fall? As for the FSA's mea culpa, about time. From a comfortable distance, I must say, the whole mess took on a rather surreal glow. Nothing like being abroad with one's lovely family to render all things financial quite trivial. That is, apart from the correct working of a foreign ATM. Certainly, when my daredevil son fell off a 10ft wall and split his chin open, I can genuinely say that nothing in the world seemed more important than getting him to the nearest hospital. A dozen banks could have collapsed that afternoon and I wouldn't have cared.

Back to work. Oh, joy.

Philanthropy

For those who enjoyed or resented my forays against philanthropy last year, a couple of lovely quotes I've recently discovered:

Philanthropist: A rich (and usually bald) old gentleman who has trained himself to grin while his conscience is picking his pocket.
- Ambrose Bierce

Philanthropic people lose all sense of humanity. It is their distinguishing characteristic.
- Oscar Wilde

Humour aside, I believe there is genuinely some truth in both.

BBC Voices

I think I am allergic to Robert Peston's voice. He was a perfectly good financial journalist at the FT, but I just can't bear the drawn-out syllables of his radio and TV appearances as BBC Business Editor.

He has just managed to say "Rock" in a way I would never have believed possible. It's one syllable, for Christ's sake!

Germanation

The year just goes on getting more and more exciting. Not only did the private banker's favourite secret - the res non-dom - become part of the Daily Mail's lexicon last week, but now we have a new country in Europe, all the budding flowers in my ecological island have been wiped out by frost, and a British bank is to be run by Alistair Darling. How they have ended up nationalising the Rock after all these months of twittering... But there are plenty of others to commentate on that story this evening. I'm rather more fascinated by what is going on in Germany.

In case you haven't heard, the CEO of Deutsche Post, the exceedingly rich and delightfully named Mr Klaus Zumwinkel, has just resigned after allegations/confessions of tax evasion on a monumental scale. Somehow he has been channelling millions of euros through undeclared trusts in Lichtenstein. Was it all Mr Zumwinkel's own nefarious work, or should we detect the hand of an artful private banker getting creative on his behalf?

If so, said banker has been busy. Apparently, German prosecutors are building cases against 750 other people who have been up to the same Licht-trickery. I'll say that again: seven hundred and fifty people about to get done for the crime of retaining a private banker just a little too good at his job. Wasn't me, I can assure you, and I'm fairly sure no one in this office has been involved. But we will, no doubt, see.

One almost feels sorry for the Germans, what with the "lust trips" at VW (remember the 30,000 euro prostitute bills?) and the bribery and tax evasion scandals elsewhere. It does rather seem that the malaise cuts right to the heart of the establishment (Zumwinkel is a McKinsey man, after all). I have only a handful of German clients - they tend to stick to their own, and send all their money to Switzerland (or is it Lichtenstein?) - but I dare say we shall all be sharing in the economic fallout from this one.

Indomitable

Has anyone yet witnessed any serious determination, as opposed to idle threat, in a non-dom client to leave the country rather than pay the Chancellor's new tax? None of mine have expressed anything more than mild irritation. I keep waiting for change of address cards, but so far nothing. No one is yet heading off to Bermuda or Monaco or anywhere else.

Yes, it's a very silly tax which is unlikely to raise much and has the potential to backfire, but I've yet to see evidence for my colleagues' panicky assertions that this will cause disaster in the City. Non-doms who have been in the UK less than 7 years aren't affected - most of our younger, professional non-dom clients are in the clear. And the long-term residents are generally too rich to care. They grumble a little, but none of them seriously wants to give up their home, their children's schooling, their place in society and their shooting weekends for the sake of £30K.

I know I should be joining the Lord Mayor et al in proclaiming that the tax is counter-productive, dangerous to the economy, and ruinous for my clients... but I just don't think it's true.

Retailed into Early Retirement

My absolute favourite quote of the year so far: Peter Bennett, the "Deputy City Surveyor" (whatever that is) while proposing a new retail mega-development on Cheapside, said of people crossing the Millenium Bridge to the City, “Instead of turning left to God, they can turn right to Mammon.”

What makes this a particularly delectable quote is the innocent suggestion that there is something new in this. St Paul's may have been there for centuries, but we've never had anything tainted by the reek of money at the other end of Cheapside. Does this deputy not realize what goes on in the City he claims to survey? No, I'm being unfair. It's a lovely soundbite, even without that irony. Good for you, Peter.

That, however, is as far as my enthusiasm goes.

One of the things I've always liked about London is the separation of activities by geography. Entertainment in the West End, shopping in Knightsbridge and Oxford Street, politics in Westminster, art and diplomacy in Mayfair, sex in Soho, dormitories in Fulham, Clapham and the rest. And in the City of London, finance. Well, why ruin it by mixing things up? It's bad enough having to travel to Picadilly to see the private equity lot. Retail in the City? Worse - cheap retail on Cheapside? It's an horrendous idea.

Imagine if the banks suddenly decided to build trading floors on the King's Road, or in Camden Lock, or Covent Garden. The howls of protest that would come from retailers! That's how I will feel seeing Brent Cross materialise beside the Bank of England. Who cares if the City is empty at weekends? This is a holy place for some of us. The last thing we want is cut-price tracksuits and barbie dolls stockpiled within yards of the Stock Market.

Call me a snob - I am, probably, in your terms - but I hate this plan. I cannot for the life of me see the need for MORE mass market retail space in London. All these shopping chains are already duplicated in every corner of the capital. And yes, I will admit, I loathe the idea of new crowds being drawn to the City. The occasional lost tourist is fine; a horde of Stepney and Peckham discount shoppers pouring across the Thames in search of a bargain would drive me to early retirement.

So please, Mr Deputy City Surveyor, take your fine plans south of the river. We like the City the way it is.

Reactions

I've been fascinated by the variety of reactions to last week's turbulence. Some of my colleagues have been stiff-lipped throughout, not displaying any sign of concern or relief whatever the news. Others are visibly nervous about their jobs. Only a handful have remembered to express their anxieties in terms of their clients' welfare rather than their own.

And we have managed to lose some of our clients considerable sums, leaping out of equities in the initial panic and then dithering too long before getting back in. The funds of funds have done rather better, and have lessened the blow in most portfolios. But still, every time my PA announces a client on the line requesting a valuation...

At least most of them are expecting the worst. In general they haven't been too shocked by our incompetence, dwarfed as it is by global market forces. And we haven't even had to manage their expectations - the media have done that for us.

The strangest reaction, though, came from one of our youngest equity analysts who claims he knew all about SocGen, as far back as Monday. A contact in the stricken bank itself, apparently. Now why would he claim a thing like that if it wasn't true? Attention-seeking? Not a smart tactic in these times. Delusion? More likely, I'd say. When asked why he said nothing about it he muttered something about no one believing him - which I suppose would be true. All the same... I don't believe him.

Flux

I've been resisting writing anything during these tumultuous days. When everything is in flux it's difficult to resist making forecasts of one kind or another, even though one knows that the only reliable prediction is that events are bound to make a mockery of one's soothsayer efforts.

My first reaction to the share tumble at the beginning of the week was to think, 'Oh well, here it is at last. Now we can get on with a good market freefall and then pick ourselves up and nurse our bruises as we have done so many times before. Finally, the uncertainty is over.' But it seems that would have been a premature posting. The market has rallied, undaunted even by the astronomically appalling news from SocGen. So where do we go from here? Up? Down? Really, we are no better off in terms of understanding our fate than we were last year.

It's becoming quite frustrating, this hovering.

As for the SocGen rogue trader, the mind boggles. How could it happen? How is it investors seem so relaxed about this extraordinary development? €5 billion, lost by a low-ranking nobody. This modern world. I really am past understanding it.

Supposedly it can all be sorted out with a rights issue, and if not no doubt the French government will intervene a great deal more swiftly and effectively than our own in the case of Northern Rock. Nevertheless, it is staggering to see another major bank so critically wounded. I'm still getting used to the idea that Merrill Lynch and UBS - to private bankers, the great untouchables of our universe - should be forced by their subprime misfortunes to go cap in hand to the sovereign wealth funds. My ilk have tended in recent years to view the Chinese basically as newly-fattened prey, ripe for hunting - the same way we saw the Arabs for decades. The notion that Arab and East Asian governments now have a controlling hand in ivy league western banks is disconcerting to say the least.

So, no predictions. I for one have no idea what's going on. All I can truthfully say is it is indeed an interesting time to be a banker.

Resolution no. 010108

New Year's Resolutions.

I'm in favour, actually, and have even kept a few down the ages. I've made three this year, two of which are still goers. The association with Jan 1 is arguably rather childish, but they're useful arbitrary kicks to one's own backside.

I'm less enthusiastic about being subjected to other people's resolutions. So far this week I have received 23 group emails from colleagues informing me of their 2008 pledges. Someone started it with a trite missive about his new teetotalism (were we being invited to applaud or commiserate?), and this started a rash of follow-up emails, office-wide, documenting the abstentions, enforcements or reinstigations that have been sworn to this week.

Most sensible: "Never again trust the FSA"

Most optimistic: "Achieve double-digit growth for my clients' portfolios"

Most pessimistic: "Hold onto job until birthday (date unspecified)"

Most snide: "Remember to sense check analysis eminating (sic) from the equities team"

Most political: "Make more effort to share information with colleagues and look for opportunities to assist them when they are struggling"

Most bizarre: "Be more red than blue"

Most laughable: "Be kind, selfless, sensitive and soulful" (this is a private banker we're talking about)

And mine? Surely you don't care? I wouldn't.

Since you insist, they concern foie gras, treasury bonds, and being nice to my wife. The first two are yet to be tested.