Oh, Greg Lippmann, you,
Who love sushi, hate subprime,
What is Fred up to?
That’s an FT Alphaville haiku in commemoration of Greg Lippmann’s time at Deutsche Bank. Bloomberg reports the avid raw-fish eater, and one of the first people to short subprime, is leaving.
He was head of the bank’s ABS and CDO trading, and famously made Deutsche some $2bn in 2007 — when the real estate market tanked.
The fact that he was betting against subprime while his employer was quite busily constructing CDOs for long investors, has raised eyebrows — and will probably do so even more given the Abacus and Magnetar controversies. He was also influential in the creation of standardised mortgage derivatives.
Lippmann is reportedly leaving to join a new firm — something being started by Fred Brettschneider, Deutsche Bank’s outgoing head of global markets in the Americas. Brettschneider’s departure was announced back in February but he’ll be at the German bank for a while longer for the transition.
We don’t know what the new company will do exactly.
Judging by Brettschneider’s last comments to the FT, made about a year ago, it could be decidedly boring:
“Good old-fashioned market-making for clients is much more profitable,” Mr Brettschneider said. “People have called it a boring business model, but it’s effective. Market making and client activity is the bread and butter for everyone at the moment. Banks have been shifting resources from proprietary trading to serving clients.”
Related links:
Subprime short, from the beginning – FT Alphaville
Was 2009 the year of the market maker? – FT Alphaville
Revisiting the Magnetar Trade – Felix Salmon
The guys who bet against the bubble and won – NY Mag