Wednesday, 26 October 2016

Goldman Sachs is scaling back - in New York

Remaoner scaremongering is becoming a thing of legend. Endless stories of horror, few or indeed, any, yet to come true.

The classic one led by the odious British Bankers Association is that all banks are preparing to leave London before Xmas.

The thing is, every single company in the UK, EU and US is using Brexit as a perfect event excuse. Cut salaries - Brexit
Cut costs by firing staff - Brexit
Ripping off Customers - desperation, caused by Brexit.

It is the universal excuse and will remain so until 2020 at least.

Just for balance, here is an article about how Goldman Sachs, said to be considering 2000 jobs in London and whether to 're-locate', is anyway firing 500 odd people in New York. No doubt because of Brexit.

Unfortunately, you can never prove a counter-factual. Goldmans is getting rid of people because its business is changing and the environment is changing. Whether Brexit related or not, the answer will always be Brexit because it suits all management to blame someone or something else other than themselves.

The wider point is that Banking is changing massively, really massively, the internet is fast disintermediating humans from the process of banking and the likes of Blockchain are only going to accelerate this trend. The big bank model is likely on the wane and there will be a big shift in moving to FinTech companies and a more diverse supplier base of services. It is just that as this happens, every job loss will be blamed on Brexit when actually something more interesting, more dynamic, yes...more capitalistic, is occurring. Which will also be more fun to write about than fact-checking remoaner lies.


Blue Eyes said...

Ooh isn't London supposed to be good at FinTech? Pre-Brexit of course.

John Miller said...

The bit I loved about the British Bastards Association was that they or the BBC got their wires crossed.

In the morning, the Big Banks were going to leave, followed by the smaller ones, by the afternoon the smaller ones were going to leave because the Big Banks would find it harder to move, but move they would.

Since all the Big Foreign Banks don't pay much tax here they may well move the brass plate to Paris or Frankfurt and send two or three erks to polish it, but they will still keep a "satellite" office of only 3,000 staff in London, because hey, for Big Banks, it's the shareholders who pay the corporation tax.

John Miller said...

What has surprised me is the lack of concern by the media of manufacturers like Nissan, who only manufacture in Britain to gain access to the single market.

I imagine the accountants are placated by the currency devaluation and the decommissioning costs. But this is an area where France can indulge in some pretty evil shafting with regard to tariffs. Germany might be a bit nervous about reciprocal charges, but then some people would be overjoyed if Mercs and Beemers became scarce and enormously expensive.

Blue Eyes said...

Err, there has been a huge amount of discussion of the car industry.

Steven_L said...

Nissan is a French company, it's owned by Renault, they can shift Nissan production to France whenever they want Brexit or no Brexit. But then they'd just become another basket case like Peugeot.

CityUnslicker said...

John M - Nissan have already extracted a guarantee that whatever the impacts of Brexit, the Govt will make up in subsidies.

Carmakers are world class centres of excellence at extracting subsidy/bribes from Governments.

Whatever the impact of leaving the single market, the 20% fall in labour costs of the UK factories will more than off-set this; reality bites.

CityUnslicker said...

@BBCSimonJack: Nissan conform Qashqai and X-Trail (new) will be built at Sunderland securing 7,000 jobs after "support and assurances" from UK government

Anonymous said...


Super, so rather than paying our money to the european government we'll pay it to a european company?

Charlie said...

"Support and assurances from the government".

Corporatism, eh. Gotta love it. I think it has been tried before though, back in the 30s, under the name "fascism".

This time, it is being cheered on by the so-called liberal left.

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