http://www.nakedcapitalism.com/2008/02/surprise-wall-street-firms-more-prudent.html Sun, 21 Mar 2010 21:13:51 -0400 http://wordpress.org/?v=2.8.4 hourly 1 http://www.nakedcapitalism.com/2008/02/surprise-wall-street-firms-more-prudent.html#comment-3930 a Tue, 12 Feb 2008 08:33:00 +0000 http://www.nakedcapitalism.com/2008/02/surprise-wall-street-firms-more-prudent-as-partnerships/#comment-3930 The analysis is incomplete as long as hedge funds are left out of the picture. Unless something is done about the attractiveness of prime brokerage (IBs lending money to hedge funds), IBs won't be able to rein in salaries, because hedge funds will be able to hire away their few talented traders for a lot more money. It all goes back to raising regulatory capital requirements, so that prime brokerage costs more, so that hedge funds pay more the funds they use to roll the dice, so that they have a harder time making money. The analysis is incomplete as long as hedge funds are left out of the picture. Unless something is done about the attractiveness of prime brokerage (IBs lending money to hedge funds), IBs won’t be able to rein in salaries, because hedge funds will be able to hire away their few talented traders for a lot more money. It all goes back to raising regulatory capital requirements, so that prime brokerage costs more, so that hedge funds pay more the funds they use to roll the dice, so that they have a harder time making money.

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