Empty Desks, Beers Mid-Day: Troubles at Deutsche Bank

Signs of trouble are everywhere at 60 Wall Street -- Deutsche Bank's main NYC office. A place that was bustling with traders from early morning to late at night now faces empty computer screens and young traders sitting a little longer at the Irish pub around the corner over beers at lunch. Here's what it feels like to be working at Deutsche Bank in New York right now. What else you need to know:

• The bank has held talks with Germany's top financial regulator and the ECB about lowering its capital buffers to be able to weather a restructuring, Bloomberg's Steve Arons and Nicholas Comfort reported today, according to sources. One take from David Havens, an analyst at Imperial Capital: "It feels like investors want to buy into this plan -- certainly battered shareholders would -- but is this really a good plan for creditors and the actual stability of the credit?" he posed in a note to investors about the restructuring and subsequent conversations with the industry's watchdogs.
• The restructuring -- which would mean a return to its pre-crisis roots -- could involve shedding 20,000 jobs. Bank of America analysts are warning that this could mean another 5 billion euro capital raise that would dilute Deutsche Bank's stock.

There's a lot of "woe is me" on Wall Street lately, as Matt Levine points out in his Bloomberg Opinion column. There's one story in particular to watch: A trader who's holding on to the future of his franchise at Goldman. Ashok Varadhan is otherwise known as the "Legend of Bleecker Street," and Bloomberg's Sridhar Natarajan has the story. Duke's Coach K and Stan Druckenmiller, the famed macro investor, are among people who weigh in on whether the trader can help bring Goldman back to its glory days.

While Deutsche Bank is cutting jobs, it's worth noting that there are other places hiring. Jefferies -- in just the first 6 months of this year -- added 350 people, which is a 10% jump compared to its headcount at the end of last year. We are already half way through 2019 and we're going to want the full run down of who's hiring and firing, and for what types of jobs. From Jefferies CEO Richard Handler in a quarterly newsletter to clients and employees today on his build out:

We have found unique candidates in research, where others are paring back. We have continued our broad build out in Europe and Asia, where markets are challenging. We have spent a great deal of money on technology, whether it is to help with better trading execution or to make our investment bankers more effective in addressing our clients’ needs. Our clients’ worlds are changing rapidly.

From BTV on Wall Street Beat today with Alix Steel & David Westin:

• Warren Buffett donates billions, and the full story by Bloomberg's Katherine Chiglinsky and Tom Metcalf on the Oracle of Omaha and Walmart heir Jim Walton who also pledged $1.2 billion of his own shares to charity.
• Blackstone, Goldman and CarVal are among investors swimming in complex loans throughout Europe.
• Come watch tomorrow and Wednesday! We'll have more to say before you head away for the holiday. We do 7:40 a.m. daily: www.bloomberg.com/live

One story that caught my eye today: A hedge fund that's run by a protege of David Tepper sues J.B. Pritzker and says that more than $14 billion of his state's bonds should be invalidated. Here's what's going on there.

And one story that will make you re-think your 20s: How two college dropouts made and $860 million fortune with an unlikely beginning for a fintech venture in Silicon Valley.

Hoping this is makes for good beach reading. Talk soon! And for those of you who want to receive this correspondence by e-mail, feel free to reach me at [email protected].

Sonali