Jamie Dimon at JPMorgan thinks that something is up. It’s not Donald Trump’s threat to destroy Iran “in one night” unless the Strait of Hormuz is opened by 8pm Eastern time today. It’s not the tone of Trump’s tweets. It’s the war’s effect on inflation and interest rates. “The skunk at the party—and it could happen in 2026—would be inflation slowly going up,” Dimon opined in his Investor Letter accompanying the bank’s newly released 2025 annual report.
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Skunks are making themselves felt even without Trump’s shaking of the nuclear sceptre. “All roads” lead to higher prices, declared the IMF’s managing director yesterday. Reuters says hedge funds have been “hammered.” Citadel’s global fixed income fund down 8.2% in March. Blue Owl stock has fallen to a lower low than before. Tiger Global is being declawed.
But the war is also changing the nature of financial services jobs. In an echo of the new UAE reality, homeworking is back in Paris, where the Financial Times reports that both Goldman Sachs and Citi are allowing staff to avoid the office after an Iran-linked group called for the bombing of Jewish targets, including the Bank of America office, which was subject to a bomb attempt last week. In Saudi Arabia, Semafor notes that Riyadh evacuated its main financial zone in the King Abdullah Financial District (KAFD) on Thursday. Goldman Sachs, HSBC, BNP Paribas and others are based there.
It’s not just evacuations. As jet fuel prices rise and flights are cancelled, bankers may yet return to the COVID habit of Zoom meetings. However, the intrepid few who keep travelling and keep meeting clients, will reap dividends.
The dividends of intrepidness are already on display. Fresh from February’s note predicting a meltdown in middle class mortgages, Citrini Research despatched an unnamed researcher to the Strait of Hormuz for a field trip. We have not read the note but the WSJ notes that the researcher went equipped with Cuban cigars and $15k in cash. CNBC says the bold analyst interviewed “fishermen, smugglers and regional officials.” He discovered that the Strait is not in fact closed and that crude oil shipping volumes are higher than previously thought. Ships are not being tracked. They are turning off their transponders to pass through a “functional checkpoint” imposed by Iran.
The new Citrini report is already thought to have led to a softening in the oil price. Banks and hedge funds were relying on Automation Identification (AIS) system data from transponders to predict the oil price, have been wrongfooted. Everyone now needs intrepid analysts willing to go into warzones with cigars.
Separately, Hamza Lemssouguer, the 35-year-old former Credit Suisse trading star turned hedge fund manager, has sufficient personal wealth to own 160 rare parrots and a 400-year-old Tudor Estate in the Home Counties.
The Wall Street Journal explains how Hamza achieved this. He doesn’t drink. He doesn’t drive. He grew up in modest circumstances in Morroco and studied at France’s École Polytechnique before joining Credit Suisse and reportedly generating $220m of PnL in a single year in 2020.
Now Hamza runs his own fund, Arini, which has $20bn in AUM. He employs a mix of analysts and traders from the likes of Afghanistan, Turkey and Ukraine and has just 20 analysts in total. The WSJ says Arini is about often supersized trades involving heavily indebted companies. It makes loans to some. It shorts the bonds of others.
Hamza likes to go big. And he likes to be different. “Being young and also being an outsider and unconventional allows [me] to not be arrogant towards the market,” he tells the WSJ.
At Credit Suisse, Hamza became the bank’s top bond trader in 2016, when he predicted that Jaguar Land Rover was headed for a fall. While everyone else in the market thought the stock would rise, Lemssouguer called Jaguar Land Rover dealerships directly and discovered their inventory was rising. “I took the contrarian view,” he says. This is where the edge lies – in war and beyond.
Meanwhile…
Goldman Sachs placed its Paris office under police surveillance. (euronews)
Brevan Howard says its Abu Dhabi staff can go somewhere else. (Financial News)
XTX Markets’ revenues were up 33% last year. (Bloomberg)
Redemption requests at Blue Owl’s top fund have surged to 40% of its value. (FT)
Redemption requests at Goldman Sachs’ private credit fund are only 5%. (Bloomberg)
Barclays still likes leveraged finance and hired Nick Fall from Goldman Sachs. (Bloomberg)
JPMorgan hired Tom Rees from Eisler to start an FX systematic trading unit. (Financial News)
AI is decimating crypto jobs, particular when they relate to data and marketing. (plexusrs)
Andy Sieg is no longer one of the five highest paid executives at Citi. (AdvisorHub)
Bill Ackman has written a very long post revealing that he employed his nephew who upset someone at his family office, who is now bringing a discrimination claim. (X)
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