city news - gems in the city newsletter 24-30 march 2014

8/12/2019 City News - GEMs In The City newsletter 24-30 March 2014

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24 30 March 2014


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Business school graduates can be dissuadedfrom pursuing a career in the financial ser-

vices sector, this often arises from a difficultexperience in a course module they have re-ceived that they incorrectly perceive as rep-resentative of the whole financial servicesindustry. Sometimes the resentment issourced from invalid stereotypes about theattributes one requires to succeed in financialservices; all of these pre-conceived notionsare misguided at best. Thankfully, we here atGEMITC are happy to introduce you to a

very pleasant but underrated phenomenoncalled reality!! Once you obtain a proper un-derstanding of what an industry actually en-tails, you can at least come to an informedconclusion. Allow me to address the myths.

The first glaringly obvious myth I have no-ticed is the perception that one needs to be aquantitative genius, nothing less than a mod-ern day Newton. Wrong. While front office

roles do require a certain degree of numericalaptitude, it is not necessary to know the sta-tistical almanac, you will be using specificand applied methods, which are not even inthe remit of your average maths graduate.Furthermore, you do not need an understand-ing of maths at the higher education level todo most roles. There is no ideal degree, it is just important for you to leverage what youhave learnt in your degree. A lot of the skills

required will require a practical understand-ing which is picked up on the job or throughyour own interest, with this being said theonly underlying quality you need to pursue afront office role in sales and trading for ex-ample, is an interest in the field that is sub-stantiated through action.

I meet a lot of people in my class who feeltheir personalities are more aligned to clientfacing roles, but for some reason there is a

lack of appreciation that such roles are pivot-al in the financial services sector. Client fac-

ing roles in finance are perhaps the most ex-citing. The business student can really lever-age their grounding in areas such as market-ing, management and negotiation just toname a few, to excel in finance just like anyother industry. If we venture into the alterna-tive investment space, roles such as capitalrising which is essentially about cultivating anetwork of clientele (mathematics wont helpyou much there) can be incredibly lucrative.

In fact, there are many fruitful opportunitiesacross the whole spectrum of the financialservices sector that require the pragmatic and broad based knowledge that business schoolgraduates possess. Take a broker for exam- ple, that is a sales execution role, which can be incredibly rewarding for those who havethe character to succeed in that environment.To summarise, like any sector financial ser-vices is multifaceted and requires a heteroge-

neous mix of individuals across all businessfunctions, therefore turning a blind eye tothis fulfilling industry is done at your owndetriment.

The opportunities are endless and as such itis not possible for me to write the whole bro-chure, but we encourage you to conduct yourown due diligence. You will be surprised tofind just how many roles you are suited to infinance. Another way to open your mind andseize the opportunity is to join the financesociety. Pursuing a career in finance could bethe best decision you make, would that besomething that interests you?

Written by Ron [email protected]

Not considered a career in finance, your loss!


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T he key news release of last weeks tradingactivity was focused on the FOMC meeting

in which a further $10 billion taper was an-nounced as expected. However, the Fed brought forward some forecasts which indi-cate when the they will increase the federalfund rates from historic lows, thereby bring-ing forward the market consensus for this tohappen to Q2 of 2015(earlier than expected)with QE still expected to conclude in Au-tumn of this year. Naturally, yields were sentto multi week highs as a result in combina-

tion with dollar strength as both cable andeuro continued to fade.

The $10 billion dollar taper has done little toquell stock market gains this week evenamidst the on-going debacle in Crimea astensions have perhaps been alleviated from amarket perspective because the worst casescenario economic and trade sections remainhalted from the EU and US, unless furtherescalation is initiated by Putin and Co. Thediplomatic narrative here is still contentiousas Putins proposal for diplomatic mediationunder the condition the referendum be recog-nised was quickly refuted and the crisis re-mains at a fulcrum point. The US and the EUhave instead opted to go for the softer routein terms of sanctions by imposing restrictionson high net worth individuals in Russia suchas visa bans, travel freezes and asset freezes.Retaliation from Moscow to these sanctionswill dictate how this story develops in termsof any potential headline risk.

Another reason why US equities remain buoyant is because the wider monetary con-text remains more accommodative. Taperingcan be viewed as confidence from the Fedabout the economy that has been reciprocated by private sector expansion and an increase

in loans. Add to the mix short-term interestrates near zero, a steepening yield curve and

quicker turns in money supply producing positive inflationary pressure (reflected bythe acceleration in PPI) and the case for equi-ties is not that of a grand capitulation. Evi-dently, the Feds cocktail of monetary stimu-lus may be losing its kick, but others arehappy to spike this drink as private sector ve-locity (GDP/Money supply) has risen in the past two quarters and is up year over year forthe first time since the beginning of the re-

covery. Coupled with the fact that energy de- pendence in the US is not sensitive to Russia,the rationale for equity gains is solid and thishas been echoed by moves we have seen.Just to illustrate why the US is not exposed toRussia from an energy perspective, these twocharts are worth 1000 words.

Grenoble Macro- Weekly wrapGrenoble Macro- Weekly wrap


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First of all, one can see from the pie chartthat the domestic production forms the larg-

est percentage of consumption and the rest ofthe chart is almost strategically positionedacross different regions. This also dispels thecommon misconception that the US is de- pendent on countries in the Persian Gulf foroil. In fact, it is often these rentier nationsthat are vulnerable due to their reliance onUS demand. Furthermore, the US has been blessed with further natural resources in theform of the untameable shale gas revolu-

tion. The extraordinary pace of the shale gasfracking has boosted US exports, as youcan see from the chart of the US current ac-count, which has almost banished the deficit.It is evident this trend coincides with theshale gas revolution that really came to fru-ition in a big way over the last 18 months.Ultimately, the "shale gas revolution" willinvariably change the geopolitical landscapeover the coming decades as well, particularly

with regards to US interventionism in theMiddle East.

Relatively speaking, the Chinese stock mar-ket has lost its lustre as it still languishesfrom an underlying credit risk threat, its firstever-corporate bond default and the require-ment for a possible bailout of a large proper-ty developer, not to mention renminbi weak-ness adding to worries in the region.

In the UK, the Chancellor George Osborneannounced his 5th budget warranting signifi-cant movement in the equity markets as an-nuity providers in particular came under pressure, posting losses as he scrapped therequirement of annuities for pension holders.Intuitively, stocks from the likes of StandardLife, Aviva and Prudential took a tumble,gambling stocks such as Ladbrokes also

faced headwind due to the taxes imposed onfixed odds betting machines. On the macro

front, less gilts will be issued than previouslyexpected for the fiscal year prompting upsidein gilt futures into the last couple of tradingdays.

Written by Ron Sen,[email protected]

Ron [email protected]

M any of you have either seen or heard ofthe movie Wolf of Wall Street. The filmtells the tale of a young, scamming JordanBelfort (played by Leonardo DiCaprio),founder of the stock brokerage firm StrattonOakmont that rose to fame in the late 80s. Itis known that Jordan Belfort used his firm,

and was convicted for, money launderingcrimes. Yet the accuracy of this portrayal inthe film is dubious.

The original Jordan Belfort

How authentic is the

Wolf of Wall Street?


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1. Was Jordan Belfort called the Wolf ofWall Street?

The book, of the same name, on which thefilm is based, we learn that Forbes magazine published an article on Jordan, describinghim as a perverted robin hood who stealsfrom the rich and takes for himself, and callhim the Wolf of Wall Street.

Roula Kalaf, the author of this article, writesthat Jordan at the age of 23 was peddlingmeat and seafood; and filed for bankruptcy at

25. The next two years he spent strugglingfrom pillar to pole, when he eventually se-cured a job on Wall Street. Soon followed theinception of Stratton Oakmont, and the birthof millionaire Jordan Belfort. Nowhere in thearticle, however, is Jordan referred to as theWold of Wall Street. A later interviewwith Danny Porush, Jordans then right-hand-man, confirms that the millionaire gavehimself the title.

The real Wolf of Wall Street predates Jor-dans career by almost 100 years. David La-mar, who died in 1934, was beholder of thetitle: The Wolf, which Jordan seems tohave conveniently adopted for his memoir.

2. Did the Nadine sink?

A note worth scene in the movie is the sink-ing of the yacht Nadine. In the movie,Jordan high on Quaaludes, convinces thecaptain to leave port during a storm. First thehelicopter conveniently falls off the ship dueto the high tides, and soon after Nadine sinks.

Although the background story surroundingthe event is different, the sinking of the yachtis factual. The helicopter did not just fall, itwas pushed overboard by Jordan and hiscrew., in order to make space for the rescuehelicopter.

3. How much of a lunatic was Danny Par-oush?

Goldfish eating Danny is introduced to us inthe movie as he asks about his nice car. Sud-denly, he quits his job and begins workingfor Jordan. How convenient. Later we learnthat Danny married his own cousinthis didin fact happen in reality.

However, the story how he met Jordan is dif-ferent. Dannys wife, Nancy Porush, metJordan on the bus when he would offer her

his seat. They lived in the same building,they later learned, and Nancy introduced Jor-dan to Danny thereafter. Following their firstmeeting, Danny decided he would get his se-ries 7 licenses in order to sell stocks for Jor-dans a brokerage firm.

In a recent interview with Danny he de-scribes himself as an animal friend. Heagrees to however having eaten a goldfish, as part of a motivational speech. The movie de- picts Danny as a druggie but in his inter-view, he declines this.

4. Did they throw real midgets?

fact or not?


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This one is tricky. Jordans mentions hiringmidgets for this reason, in his memoir. Yet it

is never mentioned whether this activity wascarried out or not, in the end. In his inter-view, Danny Porush states that at on pointthere were midgets attending a party, butwere not tossed at a giant dartboard.

5. Was Jordan addicted to drugs?

According to Jordans memoir in one monthhe took enough drugs to sedate the entirety of NYC, boasting this as a feat only the Wolf

of Wall Street would be capable of. TheFBI agent who arrested Jordan Belfort con-firms that Jordan was an addict, consumingextraordinary quantities of drugs.

6. Did Jordan rat out his friends?

When the FBI captures Jordan in the movie,they give him the option to wear a wire and

expose his allies in lieu of a reduced sentencein jail. Jordan, not the type to rat on his

friends, gives them a warning.In reality, he was not as loyal to his friends, itwould seem. When arrested, he exposed eve-ryone, including Danny. This created a dom-ino effect and each person exposed the nextto reduce his own sentence.

There we go! 6 facts from the Wolf of WallStreet. I believe it is safe to conclude thatthe movie is loosely based on facts, with a lot

of added fluff inspired by Jordans memoir,to make the story appear more entertainingthan it really is.

Written by Sam Sharland,[email protected]


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Valentin Servel | Co-president | GGSB London MSc Finance |[email protected] Sam Sharland | Co-president | GGSB London BIB 1st year |[email protected] Ron Sen | Editor | GGSB London BIB 2nd year |[email protected] Abdurrahman Ozturk | Designer | GGSB London MSc Finance |[email protected]

GEMs in the City (GEMITC) is GEM fi-nance communitys London-based society.GEMITC plays an important role for finance-orientated students of GEM, because whereGrenoble is famous for its innovation-driven businesses, London is the financial capital ofthe world. The opportunities in the financeand international business sectors are thus plentiful. However, the matching process between firm and student can be a difficult

one. Therefore, our aim is to build andmaintain a professional relationship betweenour motivated students at GEM and the fi-nancial employers located in London to makethis process a bit simpler. On the one hand,this is attractive to firms as it will help themto find their desired applicants. On the other,the GEM students are able to more easily na-vigate job opportunities and eventually findthe right fit for them

.

To provide a platform for students at Gre-noble cole de Management to connect andnetwork with finance professionals and companies located in London. Also, to give inte-rested students the opportunity to developknowledge of what the world of finance hasto offer them and the roles they could play.

And lastly, to assist companies in the searchfor the right young professionals.We believewe can achieve this by organising variousevents with financial services firms and fi-nance professionals in the UK, thereby buil-ding foundations for a strong professional re-lationship

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Meet the City News Team

GEMs In The City

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city news - gems in the city newsletter 24-30 march 2014

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