His tone was different in a later e-mail.
“I wasn’t brought up in luxury, so I like to think I can tough it out,” he wrote, describing the sagging mattress he slept on in jeans and a hooded sweatshirt to stay warm. “But I may have to give it up and try going back to finance soon.”
If he does, it won’t be easy.
“Until now, at many firms, a lot of investment bankers have been convinced that we are living now in a limited period where things are a bit more difficult and afterward the old world will come back,” said Kaspar Villiger, 70, chairman of Zurich-based UBS. “This illusion has now vanished.”
Increased capital requirements agreed to by the Basel Committee on Banking Supervision will limit banks’ use of borrowed funds to boost profit, lower their return on equity and likely reduce executive compensation, analysts say. High leverage “was the juice in the system,” said Ilana Weinstein, chief executive of New York-based search firm IDW Group. “It’s gone.”
No deal for MF Global
For Brady, 42, the vanishing point at MF Global arrived after he returned to Chicago from Florida. He thought the New York-based futures brokerage would “weather the storm,” even as Moody’s Investors Service cut its rating and shares plunged, he said. He got word that another company would buy the firm while at a Talking Heads cover-band concert and celebrated with a friend by drinking Anchor Steam beer and shots of Jameson.
He woke on Oct. 31 at 4:40 a.m. and searched for deal reports on his phone. He didn’t find any.
The acquiring firm, Interactive Brokers Group, pulled out after a discrepancy in client accounts surfaced, and MF Global filed for bankruptcy later that day.
At first, Brady thought his company would survive, he said. His wife thought he was in denial. His mood changed when he was sitting in the home office, looking at the value of his holdings.
“My Fidelity account looks like my bar tab from just a week ago,” Brady said.
On Nov. 11, a human resources executive asked colleagues on Brady’s floor to gather by his desk, which looks out on the Willis Tower, the tallest building in the United States. They were all fired. She told them to show receipts for large personal belongings to the plainclothes security guards by the elevators, and that checks would be sent in the mail, Brady said. Someone asked whether the checks would bounce. She said she didn’t know.
Brady, who said he wasn’t aware of the size of the bets MF Global made on European sovereign debt, wrote to clients this month saying he’s looking to join a firm that believes “integrity and honesty are the single most important ingredients to success.”
— Bloomberg News