Morning Coffee: Morgan Stanley banker upsets with his interview technique. Goldman Sachs MDs must move to downbeat locations

Michael Grimes is no longer working for Morgan Stanley. But for 30 years until February 2025, that's where he was as a technology investment banker working on some of the biggest and bestest deals in America. Now, though, Grimes (not to be mistaken for Elon Musk's ex), is working for the government, and he is causing some ructions in the process.

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The Financial Times reports that Grimes has been leading a staff purge at the Chips Program Office, which is charged with subsidizing US semiconductors as the country attempts to wean itself off chips made in Taiwan. Grimes' personal purging methods appear to come directly from the long tradition of banking beasting. 

The FT reports that Grimes has been conducting interviews to assess which of the Chips Program people he wants to keep. During these interviews, he's reportedly been asking questions like, "What’s four to the fourth power?’,” and probing "intellectual capacity." People feel 'demeaned.' - “This is not a psychologically healthy place to work,” says one. 

It's reminiscent of research by ex-Goldman Sachs associate-turned academic Alexandra Michel, who found that even outside of banking, ex-banker work long hours and expect their new reports to do the same. "When I look at transcripts from people working in investment banks, consulting firms and law firms, it's very apparent that their sense of self-esteem is constructed around being an elite individual," said Michel. Irrespective of their new workplace, they want their colleagues to confirm that they are an elite still. 

Grimes is therefore looking for the elites in the Chips Program group. It's all a bit of a shock. The group is part of the US Department of Commerce, which until recently prided itself on flexible working and family care. Now, high-speed mental arithmetic is part of the mix.

Separately, if you're a senior vice president, managing director (MD) or partner at Goldman Sachs, there are probably a few places you'd like to be based. They're probably not Bangalore, Birmingham, Dallas, Salt Lake City and Warsaw.

It's a bit awkward, therefore, that this is where Goldman might now like you to go. Bloomberg reports that the firm has decided that it needs additional senior staff in its low-cost offices because too many of the relocations to date have involved juniors. Individuals in the ranks mentioned above are therefore likely to be asked to move next. If you're a vice president, especially, it might be a good idea to look delighted when Birmingham is mentioned. It's better than losing your job.

Meanwhile...

Citadel Securities' trading revenues for the full year rose 55% to $9.7 billion in 2024.  Net income doubled to $4.2bn. (Bloomberg)  

It was a challenging February for hedge funds. Jain Global fell 1%. Millennium fell 1.3%. Citadel fell 1.7%. (Bloomberg) 

HSBC has renamed its “eastern markets” and “western markets” business sections. There are suspicions that it will split along east-west lines. (Financial Times) 

It's ok. HSBC is not closing its equities trading business in Europe and the Americas. (Financial News) 

Schroders wants to cut £150m in costs over two years. (Financial News) 

DBS is hiring wealth managers in Asia. It hired 80 relationship managers focused on the north Asia market in 2024, with nearly half based in Singapore. It wants another 30 in 2025. (Financial Times) 

The difference between Chris Rokos (of Rokos Capital Management) and Alan Howard (of Brevan Howard): Howard likes to be a conservative trader, saving his biggest bets for when he was highly confident of an outcome. Rokos likes a lot of risk. “If Rokos thinks the Japanese market will go up, he will put options, futures, swaps on, all [positioned] one way.” (Financial Times) 

David Cameron is now advising Jeb Bush's private equity firm. (Financial Times) 

STEM parents want their kids to study the arts. “Jobs that require just logical thinking are on the chopping block, to put it bluntly. think the pendulum is swinging back to the creative side of things.” (WSJ)

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