Saturday, November 19, 2011

The Pension Consultant

The following is a real text message exchange between two ex-Wall Street guys, call them Roy and Steve.  Parental discretion is advised.
Roy:  I just read that MF Global, Corzine, GS (and others) are being sued by two pension funds for that MF Global bond sale from early summer. The one with the Corzine up-the-coupon clause.

Steve:  I saw that. Do they have a case?

Roy:  Usually I would say no case for litigation against underwriters.  But I think in this case, it's a good shot.

Steve:  Why were those pensions buying MF Bonds?

Roy:  I think it was both stock and bonds.

Steve:  Yeah.  How do you get to run a small pension and stuff them with bonds of a futures broker?  Crazy!

Roy:  Who the hell knows what and why these idiots buy?!  It's a plumbers union too! LOL

Steve:  Yeah I saw that.  I wonder who advised them.

Roy:  That's another Wall Street scam.  Those so-called "pension consultants".

Steve:  Yup.  The consultant should be the one getting sued.  And the guy that runs the pension.  How do you get a gig like that anyway?

Roy:  Write useless academic papers on "Contingent Immunization" and "Equity Duration".  That works fine.
Roy:  I hate pension-related stuff. So f***ing boring.

Steve:  Yeah.  But steady bucks.  What the f**k is "Contingent Immunization"?

Roy:  Yes, I agree -- steady bucks for sure.
Roy:  If you're hot-looking 30-yr-old pension wanna-be, you've got it made.
Roy:  All these massively geeky pension fund guys will drool all over you.

Steve:  How true.  Did I tell you my [large British bank in NYC] pension story?

Roy:  You might have, I don't recall.

Steve:  When we worked at [the large British bank in NYC] a [large California teachers pension fund] consultant asked dealers for proposals for inflation protection for the pension.
Steve:  So I busted my ass to put together a structured note linked to oil and silver. Inflation protection.
Steve:  The consultant almost fell asleep during my presentation.

Roy:  HA! LOL

Steve:  Then the consultant said - yeah, Bear, GS, MS all pitching similar product.  Why [the large British bank in NYC]?
Steve: I figured it was all over then.  We can't compete with other dealers. So I decided to give him a tour of the trading floor and send him on the way.
Steve: He then saw the hot blonde on the FX desk, remember her?

Roy:  Oh yeah.  A while ago.

Steve:  So the consultant goes - I like girls.  Then he wanted an intro, because without it he won't do the structured note with us.
Steve:  And there was no way I could call the pension directly - I had to go through the asshole pension consultant.
Steve: Later I found out he gave the business to another dealer.  I guess he got an introduction he wanted there.   

Roy:  What a piece of s**t that guy.

Steve:  I want to be a pension consultant...  I can stuff MF Global bonds into the plumbers pension fund and then sue GS for the losses.
Steve:  Because they should have known Corzine was loading up on Italian debt.  And then have GS introduce me to hot girls.

Roy:  LOL. Great story. Well I got to go.

Steve: Alright man.  Talk to you soon.
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