October 18, 2024 • 26 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) Israeli soldiers killed Hamas leader Yahya Sinwar, the architect of the Oct. 7 attack, in a death that leaves a huge hole at the top of the militant group and spurred fresh US pressure for Prime Minister Benjamin Netanyahu to end the war in the Gaza Strip.
(2) China’s central bank moved to support markets just as data showed the economy expanding the least in six quarters, signaling the government’s intent to continue a stimulus push to draw a line under the slowdown.
(3) European Central Bank officials reckon another interest-rate cut in December is highly likely, with inflation to settle at 2% faster than envisaged, according to people familiar with the matter.
(4) Traders at some of the world's biggest banks have allegedly been misled by cold callers dangling the prospect of jobs at the likes of Goldman Sachs Group Inc. and Morgan Stanley in exchange for details about their salaries, the make-up of their teams and even their desk’s confidential profit and loss statements. But often the jobs don’t exist. Neither does the named caller. Even their supposed employer — firms like Omertion Group or AMO Search — aren’t real.
(5) Netflix added more than 5 million customers in the third quarter and eclipsed Wall Street’s expectations on every major financial metric despite a new programming slate constrained by last year’s strikes in Hollywood.
(6) City firms publicly say they’re still committed to diversity, equity and inclusion efforts. Their staff don’t agree.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. This is the Blueberg
Daybacate podcast, available every morning on Apples, Spotify, or wherever
you listen. It's Friday, the eighteenth of October. Here in London,
I'm Caroline Hepka. Coming up today, Israel kills ya Ya Sinwa,
(00:21):
the leader of her mass and the architect of the
October seventh attack. We have an exclusive report on how
a London headhunter allegedly lured traders into sharing confidential salary
and profit loss information plus going backwards. City firms publicly
say they're still committed to diversity, equity and inclusion efforts.
(00:42):
Their staff tell Bloomberg that they don't agree. Let's start
with a roundup of our top stories. US President Joe
Biden has described the death of Hamas leader Yaya Sinhoa
as a quote good day for the world and a
chance to end the conflict in the Middle East. Israel's
military says that it killed the archae detective the October
seventh attacks during an operation in southern Gaza. Here is
(01:04):
the Israeli Prime Minister Benjamin Netnia, who I mean.
Speaker 2 (01:08):
I'm standing before you today to inform you that Hamas leader,
Yaya Sinwar, has been eliminated. The person who committed the
most terrible massacre in the history of our nations since
the Holocaust. The mass murderer who murdered thousands of Israelis
and kidnapped hundreds of our citizens, was eliminated today by
our heroic soldiers. And today, as we promised to do,
we settled the account with him. Today evil has suffered
(01:30):
a heavy blow, but the task before us is not
yet complete.
Speaker 1 (01:33):
Prime Minister Benjamin Netanyahu's speaking via a translator, Sinwal's death
leaves the militant group with no clear successor. The news
comes as Netanyah, who continues to weigh his country's retaliation
against Iran for the firing of two hundred ballistic missiles
on the first of October. China's economic data drop this
morning has presented a mixed picture. GDP rose by four
(01:56):
point sixty six percent, the lowest pace in six years,
but consumption, output and jobs gauges beat estimates last month.
Speaking during a press briefing this morning, shn Lai Yun,
China's National Bureau of Statistics deputy director, says the country
is going through sweeping changes since this year.
Speaker 3 (02:20):
We are faced with the complex and changing external circumstances,
increasing challenges and the difficulties in the outside environment. The
domestic economy is also upgrading and making structural transformation, so
the temporary pains of this adjustment to being released.
Speaker 1 (02:40):
That was Shen la Yun from China's National Bureau of
Statistics speaking there through a translator. Today's figures come after
Beijing and out stimulus measures in late September, including interest
rate cuts and support for the property and equity markets,
and this morning the CSI three hundred is extending gains
up by three point three percent after the PBOC Central
(03:03):
Bank detailed more policy support. Bloomberg understands that ECB officials
caa further cut to interest rates in December now as
very likely. Those familiar with the matter say that's because
the region is nearing its two percent inflation goal faster
than expected. The central Bank delivered a third reduction in
borrowing costs yesterday. Speaking after the decision, ECB President Christine
(03:25):
Leguard said progress against inflation is continuing apace.
Speaker 4 (03:29):
We believe that the disinflationary process is well on track,
and all the information that we received in the last
five weeks since our last monetary policy decision, we're heading
in the same direction lower. That is what has caused
us to make the decision to cut our three rates
(03:51):
by twenty five basis points.
Speaker 1 (03:53):
Christine Leguard, speaking there, she refused to be drawn on
when and how quickly rates will be decreased, even as
she argued that downside risks to inflation outweigh upside threats.
An ECB spokesperson declined to comment on the news. In earnings,
Netflix added more than five million customers last quarter and
eclipse Wall Street's estimates on every major metric. These streaming chants.
(04:17):
Sales for the period grew by fifteen percent to just
under ten billion dollars. Netflix CEO Ted Sarandos was glowing
about the company's prospects.
Speaker 5 (04:26):
Looking into twenty twenty five. We're feeling really good about
the business. We had a plan to reaccelerate growth, and
we've delivered on that plan. You can see that in
our twenty twenty four financials. We expect to deliver fifteen
percent revenue growth and six percentage points of operating margin
improvement and engagement, which we view as our best proxy
for member happiness because when people watch more, they stick
(04:47):
around longer, so that's retention.
Speaker 1 (04:49):
Ted Sarandos speaking, their shares in Netflix rose as much
as five point four percent in post market trading. A
London headhunter has allegedly used fake name and made up
job opportunities to obtain confidential information about market traders. Bloomberg's
Christopher Pitt has more on this exclusive report.
Speaker 6 (05:09):
Traders at some of the world's biggest banks have allegedly
been misled by cold callers dangling the prospect of jobs
at the likes of Goldman, Sachs and Morgan Stanley in
exchange for details about their salaries, the makeup of their teams,
and even their desks confidential profit and lost statements. But
often the jobs don't exist, neither does the named caller
(05:33):
or their supposed employer, according to documents seen by Bloomberg
and ten people familiar with the matter who asked not
to be named given the sensitivity of the data. The
calls have instead been made by staff at Odin Partners,
a recruitment to marketing intelligence firm. According to the documents,
(05:53):
the company reportedly used the information gleaned from calls to
unsuspecting bankers and traders as part of what it calls
its markets mapping of key players trading in some of
the world's biggest asset classes, from rates to currencies. The
co founders of Odin Partner's declined repeated requests from Bloomberg
(06:15):
for an on the record response to the story, while
a director at the company didn't respond to multiple emails
and messages seeking comments in London, Christopher Pitt Bloomberg Radio.
Speaker 1 (06:27):
While executives at Odin Partners did not respond to those
requests for comment on the story, a lawyer from the
company told Bloomberg that the allegations were false. Black professionals
in the city of London say that efforts to increase
the number of black employees and underrepresented groups in financial
services have been heavily deprioritized more than four years since
(06:48):
the murder of George Floyd at the US sparked an
unprecedented desire for change to address racial disparities. Bloomberg spoke
to twenty black professionals who say that the city has
given up on achieving racial equality. Stephen add A Doyo,
former investment associated Columbia, thread Needle and founder of Beyond Education,
(07:08):
says that firms signed up to external programs like ten
thousand black interns without a plan in place to ensure
their future career progression.
Speaker 7 (07:18):
If you think about it, these companies didn't start these
programs right, So the only reason why they were even
working with ten thousand black interns or other initiatives is
probably because the other peers were working with those initiatives right,
and it's kind of like, oh, it's going to make
us look good. And I think the difficulty is that
with programs like that, there's no succession, so it's kind
of like, you know, we have interns for a bit
(07:38):
and then that's pretty much it. Now, some firms are
really good and will try and figure out a way
to retain that intern beyond an internship program, but for
the most part, most of the firms that signed up
to those programs is kind of like, hey, let's do
this program and look good.
Speaker 1 (07:51):
That was Stephen ad Adyo, founder of Beyond Education. Research
shows the pace of change has slowed. It will now
take fish years for the proportion of black talent in
the UK's financial and professional services to near four point
four percent, the percentage of black employees in the country's
working age population, and lastly, UK regulators plan to ease
(08:14):
bonus rules so that bankers can get payouts faster. The
Potential Regulation Authority is looking to abolish the three year
weight in the UK before any part of a bonus
can be paid. It's a change to a rule that
was put in place after the two thousand and eight
financial crisis to discourage excessive risk. Banks have pushed to
soften it as a way to make Britain more competitive
(08:37):
for financial talent. In a moment, I want to bring
you two exclusive bits though of in depth reporting on finance.
Will shure on that Headhunter story using fake identities to
dupe Wall Street traders. This is a practice known as rusing.
We're going to bring you all of the details of
(08:57):
that up next. And also on black workers in the
city of London who say that the drive for inclusion
is no longer a priority in the industry. That from
our own reporter Tea. Weare at a baio. But before that,
let's talk about what is happening in the Middle East.
Israel has killed the person thought to have masterminded the
October seventh attack, the Hamas leader Yea Sinwa. President Biden
(09:20):
says there's a chance to end the war, joining US
now is Boomberg's Stuart Livingston Wallace, who heads our coverage
of Middle East and North Africa news. Stuart, good morning
and thank you for your time. So the killing has
now been confirmed, what does it actually mean do we
think for Hamas?
Speaker 8 (09:38):
And there's a couple of options here. Number one, I mean,
on the face of it, it's a big victory for
Israel because that was sort of one of the chief
war aims was to eliminate that mass leadership, and they
haven't necessarily done all of them, but you know, this
was the big one, and he was certainly the face
of a mass particularly in regards as we said to
October the seventh last year and what happened around that.
But the second thing to think about, and as in
(10:00):
some respects this will be complicating matter because it's not
clear who his successor is and there's every chance that
whoever does get named as a successor doesn't necessarily carry
the same authority. So if you're going to have one
of the two parties involved in the conflict trying to
come to some sort of agreement on a ceasfar, which
I agree at the moment is a remote possibility, then
would they have the authority within her master to actually
(10:22):
enforce it and get people not only to lay down
their arms, but also to get all the remaining hostages released.
That is a little bit of an open question at
the minute.
Speaker 1 (10:30):
What does Person Biden's view then on what happens next?
Is there a US plan as I mean, the US
person is in Germany for what some are calling, you know,
his swan song, given that he's only got a few
more weeks in office.
Speaker 8 (10:42):
Yeah, I mean he's certainly optimistic. But I mean again
we've had that optimism repeatedly over the last several months.
You know, We've been told we're very close to a
deal and minute sort of never seems to go anywhere.
I mean, he is sending Anthony Blinkom back to the
region for we think the eleventh time in the last year.
So the clearly pressing for it, and I think his
(11:03):
optimism or at least his hope is being echoed by
other world leaders. Now again, whether that translates into reality
is a different matter, because we had the Israeli Prime
miers to come out last night and say very clearly
this war is not over and fundamentally what it wants
is two things. Number one is an incomplete capitulation by
her mass and number two or release of all the
(11:25):
hostages that are the remaining captivity. Again, not clear how
that can happen and what sort of time frame.
Speaker 1 (11:32):
And so you talk about the continuing war. What about
Israel's view then on the strike on Iran, something that
we've also been talking about and anticipating.
Speaker 8 (11:42):
Yeah, and we continue to anticipate. I don't think the
killing of Cinna necessarily changes the calculus there in terms
of what they were planning, as far as we understand
that there is some sort of agreen between the Prime
Minister and the Defense Minister. That happened a couple of
days ago. Nonetheless, that now needs to go to the
Security Cabinet, you know, which means periolically for a final approval.
(12:05):
The reporting has been out there seems to suggest they
will probably avoid the nuclear facilities, they will probably avoid
the energy facilities, which sort of leaves the military sides,
you know, potentially cyber attacks something along those lines. But
again you can hear my voice, it's really not clear
(12:25):
what exactly they will do and when.
Speaker 1 (12:27):
Yeah, indeed, okay, sorry that we will continue to follow
for our listeners. Stuart Thank you so much for your
time for your insights this morning. That has been a
big Stuart Livingston Wallace, who heads our coverage of the
Middle East and North Africa. After Israel killed the person
who was thought to have masterminded the attacks more than
a year ago against Israel, now traders that some of
the world's biggest banks have allegedly been misled by cold
(12:51):
callers dangling the prospective jobs at Wall Street banks in
exchange for details about their salaries, the makeup of their teams,
and even their death confidential profit and lost statements, but
often the jobs don't exist. This story is brought to
you by Bloomberg's finance reporter William Shaw, and Will joins
me now on this significant reporting. Will good to have
(13:12):
you on the program. Tell us a bit about what
has been happening with these calls.
Speaker 9 (13:18):
So basically this story is about allegations that relate to
Odin Partners, which is a recruitment firm based in London
and Asia. They say they've placed about nine hundred people
at jobs in international finance after the past decade or so.
Their clients include firms like City, Morgan, Stanley, UBS and
Deutsche Bank. Now the allegations that they face broadly that
(13:42):
for years until as recently as last year, they would
encourage staff to phone up traders using fate names for
themselves and for the company, and they then dangle the
possibility of a job, perhaps at Golden Sachs, perhaps at
Morgan Stanley that didn't exist, and the aim was try
and persuade the traders to hand over sensitive information about
(14:04):
their own salary, their p and L, the makeup of
their teams, which is very hard to come by in
the industry. And Odin would then share this with its
clients allegedly, And we should say, there's no indication or
no suggestion that any of the clients knew where this
information was allegedly coming from.
Speaker 1 (14:24):
What else do we know about these headhunters then and
their practices.
Speaker 9 (14:28):
I think there's a suggestion that the instruction to do
this was coming largely from the top. So people familiar
with the matter told us that executives at the firm
encouraged them to do this. And according to according to
people that we've spoken to and written communications that we've
seen as recently as twenty twenty two, James Hext, who's
(14:49):
one of the co founders of the company was encouraging
members of staff to lose.
Speaker 1 (14:55):
So then hang on, how big a breach of trust
or even of the law is this actually, So we.
Speaker 9 (15:03):
Spoke to a criminal lawyer who said that, well, obviously
not commenting on whether or not these allegations were true,
he was saying that potentially this could engage the Fraud
Act two thousand and six, these allegations, and that it
could move towards the territory of fraud by misrepresentation. Now,
I should say Odin have responded to this in a
(15:27):
letter to us last month. Their lawyers denied the allegation.
When we've spoken to them again this month, they've declined
comment in much real detail. What they say is and
I'll read this out. Odin Partners is currently in dispute
with those that they believe are responsible for the allegations
and has been advised not to engage publicly on the
(15:49):
issues raised by Bloomberg at this time.
Speaker 1 (15:52):
Okay, so the head hunter then talking about that, what
does it mean for the traders and the trade desks
potentially evolved.
Speaker 9 (16:03):
I think one of the things that was interesting speaking
to traders both who'd been allegedly targeted and just traders
more generally was that they weren't massively worried about this.
I think there's not much a bank might worry about
its P and L data being shared through false pretenses.
(16:24):
But I think one thing one of the things I
learned is perhaps that traders have focused very much on
the money that they make and perhaps less concerned about
issues like this. I think they also value the market
color that they pick up from they pick up from
headhunters during the kind of regular phone calls that they
have with recruiters all over the city of London.
Speaker 1 (16:46):
Anything else that we should know about this reporting, because
it's some in depth reporting and really pretty fascinating, are
the things that we should think about.
Speaker 9 (16:54):
I think one of the things that's really interesting about
this is that this recruitment isn't industry that has not
really been regulated in the wake of the two thousand
and eight financial crisis in the way that banks have.
Speaker 2 (17:08):
So there.
Speaker 9 (17:09):
I mean, what the reporting suggests is that allegedly there
are pockets of quite sort of colorful behaviors still going
on in this industry that you wouldn't find anymore in
regular banking. Also, it's like a hugely competitive area. There
are loads of headhunters all over London, and there's a
lot of money at stake, and I think that gives
(17:31):
you a sense as to why a company might allegedly
delve into unethical practices. A successful trader, a big name firm,
for example, can negotiate a compensation package worth millions when
they move banks. The placement fees for headhunters can be
around twenty five percent of that trader's first year total
(17:53):
comp and they tend to be capped somewhere around one
hundred thousand pounds for the recruiter, but it can go
quite a bit higher than that.
Speaker 1 (18:01):
So there's a lot at stake here. Thank you so much,
Will for bringing us your story. You can read it
in full on the terminal. Also on the Blueberg website,
Headhunter said to use fake IDs to do Wall Street traders.
That is Bloomberg's finance reporter Will Sure Now. Black workers
in the city of London say that inclusion is no
longer a priority for the financial and professional services industry.
(18:23):
Bloomberg Radio reported to at Adebayo has been speaking to
a raft of city workers past and present, who say
that recruitment efforts for underrepresented groups and diversity equity and
inclusion professionals have disappeared from firms in recent years, and
Tia joins me now in the radio studio for more
on this story that you've spent really weeks reporting on.
(18:44):
What have the people that you've spoken to said about
what has happened to inclusion initiatives.
Speaker 10 (18:50):
So, Caroline, one person actually summed it up really well,
and that person is Pauline Miller. She's got twenty years
of experience running firms across the city, including State Streets
and Barklay's, and what she said to me is that
at the moment, we're experiencing this perfect storm of economic headwinds,
industry backlash, and also disappointing results from initiatives, which is
(19:14):
driving a real pullback from a lot of city firms.
And that's been reflected in the accounts of black employees
that I've spoken to, many of whom wanted to keep
their identities private. They've said they've noticed subtle changes. So
fewer Black History Month speakers, for example, fewer networking events
for people of color. So we're not seeing the same
(19:34):
regulatory pressure that is present in the States just yet,
but firms are reassessing their commitments and that's proven in
the data as well. I spoke to the Taylor Bennett Foundation,
which is an organization that operates across the communications landscape,
placing diverse candidates in firms such as HSBC and Santander,
and they said that demand for their paid internship programs
(19:57):
has actually seen a twenty five percent to year on
year since twenty twenty two, and that's despite seeing a
big uptick in interest in twenty twenty particularly following the
murder of George Floyd. And that drop in demand is
coming specifically from financial services and city firms. I also
spoke to Junior Garber, who founded a similar group called
(20:18):
Equity City, which works to get the minority candidates into
the city with a focus on insurance, and he said
the same thing. Budgets are dwindling, and really at the
heart of the problem seems to be this lack of
concerted effort from firms. I spoke to one person, Mark Lomas,
who's the head of culture at Lloyd's of London, and
he set out the problem really during our conversation. He said,
(20:39):
making real change takes very deliberate and targeted effort, and
not all firms are willing to do that.
Speaker 2 (20:44):
So here's a bit of what he said.
Speaker 11 (20:46):
I think we see this challenge across lots of employers,
and that is essentially and making sure that your processes
are fit for purpose. You are deliberate in how you
go out to attract talent, you have inclusive recruitment practices,
and then you have the ability and the practices to
retain talent. I think at the Lloyd's market, why we've
(21:08):
been so successful is because we've had a very deliberate
approach to it, so it's not impossible.
Speaker 1 (21:16):
So that was Mark Loma's head of culture at Lloyd's
of London that you spoke to. You also report on
black workers facing a ceiling at work or leaving. It
is having an impact on people in their working lives.
Speaker 8 (21:29):
Yeah.
Speaker 10 (21:30):
From my conversations, it seems that an unintended consequence of
this urgency to act on diversity felt by a number
of city firms in twenty twenty was that some of
the DEI strategies that were focused on recruiting black talent
were rushed and they did it without adjusting company culture first.
And that's really showing in the experiences of black employees
(21:50):
and crucially the number of them leaving. So the data
shows that black talent is leaving firms in the city
before reaching the top fact the top ranks, so at
UK Law firms, black people are four times more likely
to leave than their white counterparts. And investment banking, actually
the figure for representation at a more senior levels it's
just zero point five percent, and we can see in
(22:12):
the ethnicity pay gap that's persisted too, particularly for black workers.
So that also suggests concentration at a junior level. But
employees that I've spoken to really speak to this phenomenon
of joining through a black focused recruitment scheme like the
Taylor Bennett Foundation all ten thousand black interns, and then
feeling abandoned without a clear pathway to progression in their career,
(22:33):
and that contributes to attrition to them leaving. So one
of those people was Karening Mipeiri. She's a former private
equity investment operations analyst and she's now an analyst a
large UK bank, and she says that since twenty twenty
there has been divestment from DEI and it's hurting her experience.
Speaker 12 (22:50):
Now it feels a bit more like that conversation has
almost sort of been put to the back burner and
with the economic contraction sort of companies having to reconcile
with overhead and challenges. I think the and I was
the first thing to go really and it was subtle
things like, you know, maybe there wouldn't be as many
(23:11):
networking events for people from saying background, and maybe for
Black History Months they wouldn't do quite so many things,
and they wouldn't be quite so many speakers. But bit
by bit it does feel as though it's not really
as much of a priority as it used to be,
and I think that really trickles down into then your
working life as a black woman.
Speaker 1 (23:30):
So that was Karen Mupereiri, one of the people that
you spoke to in this investigation. You've also done some
graneur reporting. I mean, you've talked a lot about the
data and data tracking is another issue the BAME umbrella,
which in the UK refers to black Asian and minority
ethnic people. There's also an issue with this in the data.
Speaker 10 (23:52):
Yeah, so that was actually one of the most interesting
parts of this reporting, the existence of this data gap
as it pertains to black talent in the city. So
despite making these pledges to sort of increase equality, in
twenty twenty. Most firms actually don't publish data specifically about
their black employees, and it's also very difficult to find
(24:13):
published progress on these targets that they did set in
twenty twenty. And it's slightly to do with the law
in the UK around data collection for HRD appartments. They
rely on something called self reporting, so black employees and
other employees have to volunteer that ethnicity information, that ethnicity
information about themselves and it hurts the progress of DEI.
(24:36):
So one professional I spoke to who was the first
London based global DEI director, d an Asset Manager, said
whilst they were in that role, they were only able
to collect about sixty five percent of the ethnicity data
for the company from employees and that severely inhibited their
work because they couldn't back it up with these data points.
(24:56):
And they say that the work was then reduced to
performative at and when I spoke to groups who try
to lobby for change like change the Race Ratio, which
tries to get more Black representation at a board level,
they said quite simply, what gets measured gets done. So
without the data, it's really hard for firms not only
(25:17):
to track their progress, but for DII professionals to justify
that investment into what they're doing. And it's something we
see repeated across the city, across different firms.
Speaker 11 (25:27):
So until that problem.
Speaker 10 (25:28):
Gets solved, perhaps the pace of change will stay stagnant
or even slow.
Speaker 13 (25:33):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 1 (25:39):
Look for us on your podcast feed every morning, on Apple, Spotify,
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Speaker 13 (25:45):
You can also listen live each morning on London DAB Radio,
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Speaker 1 (25:51):
Our flagship New York station is also available on your
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I'm Caroline Hip and.
Speaker 13 (26:00):
I'm Stephen Carol. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg Daybreak Europe
Bloomberg Audio Studios, podcasts, radio news. This is the Blueberg
Daybacate podcast, available every morning on Apples, Spotify, or wherever
you listen. It's Friday, the eighteenth of October. Here in London,
I'm Caroline Hepka. Coming up today, Israel kills ya Ya Sinwa,
(00:21):
the leader of her mass and the architect of the
October seventh attack. We have an exclusive report on how
a London headhunter allegedly lured traders into sharing confidential salary
and profit loss information plus going backwards. City firms publicly
say they're still committed to diversity, equity and inclusion efforts.
(00:42):
Their staff tell Bloomberg that they don't agree. Let's start
with a roundup of our top stories. US President Joe
Biden has described the death of Hamas leader Yaya Sinhoa
as a quote good day for the world and a
chance to end the conflict in the Middle East. Israel's
military says that it killed the archae detective the October
seventh attacks during an operation in southern Gaza. Here is
(01:04):
the Israeli Prime Minister Benjamin Netnia, who I mean.
Speaker 2 (01:08):
I'm standing before you today to inform you that Hamas leader,
Yaya Sinwar, has been eliminated. The person who committed the
most terrible massacre in the history of our nations since
the Holocaust. The mass murderer who murdered thousands of Israelis
and kidnapped hundreds of our citizens, was eliminated today by
our heroic soldiers. And today, as we promised to do,
we settled the account with him. Today evil has suffered
(01:30):
a heavy blow, but the task before us is not
yet complete.
Speaker 1 (01:33):
Prime Minister Benjamin Netanyahu's speaking via a translator, Sinwal's death
leaves the militant group with no clear successor. The news
comes as Netanyah, who continues to weigh his country's retaliation
against Iran for the firing of two hundred ballistic missiles
on the first of October. China's economic data drop this
morning has presented a mixed picture. GDP rose by four
(01:56):
point sixty six percent, the lowest pace in six years,
but consumption, output and jobs gauges beat estimates last month.
Speaking during a press briefing this morning, shn Lai Yun,
China's National Bureau of Statistics deputy director, says the country
is going through sweeping changes since this year.
Speaker 3 (02:20):
We are faced with the complex and changing external circumstances,
increasing challenges and the difficulties in the outside environment. The
domestic economy is also upgrading and making structural transformation, so
the temporary pains of this adjustment to being released.
Speaker 1 (02:40):
That was Shen la Yun from China's National Bureau of
Statistics speaking there through a translator. Today's figures come after
Beijing and out stimulus measures in late September, including interest
rate cuts and support for the property and equity markets,
and this morning the CSI three hundred is extending gains
up by three point three percent after the PBOC Central
(03:03):
Bank detailed more policy support. Bloomberg understands that ECB officials
caa further cut to interest rates in December now as
very likely. Those familiar with the matter say that's because
the region is nearing its two percent inflation goal faster
than expected. The central Bank delivered a third reduction in
borrowing costs yesterday. Speaking after the decision, ECB President Christine
(03:25):
Leguard said progress against inflation is continuing apace.
Speaker 4 (03:29):
We believe that the disinflationary process is well on track,
and all the information that we received in the last
five weeks since our last monetary policy decision, we're heading
in the same direction lower. That is what has caused
us to make the decision to cut our three rates
(03:51):
by twenty five basis points.
Speaker 1 (03:53):
Christine Leguard, speaking there, she refused to be drawn on
when and how quickly rates will be decreased, even as
she argued that downside risks to inflation outweigh upside threats.
An ECB spokesperson declined to comment on the news. In earnings,
Netflix added more than five million customers last quarter and
eclipse Wall Street's estimates on every major metric. These streaming chants.
(04:17):
Sales for the period grew by fifteen percent to just
under ten billion dollars. Netflix CEO Ted Sarandos was glowing
about the company's prospects.
Speaker 5 (04:26):
Looking into twenty twenty five. We're feeling really good about
the business. We had a plan to reaccelerate growth, and
we've delivered on that plan. You can see that in
our twenty twenty four financials. We expect to deliver fifteen
percent revenue growth and six percentage points of operating margin
improvement and engagement, which we view as our best proxy
for member happiness because when people watch more, they stick
(04:47):
around longer, so that's retention.
Speaker 1 (04:49):
Ted Sarandos speaking, their shares in Netflix rose as much
as five point four percent in post market trading. A
London headhunter has allegedly used fake name and made up
job opportunities to obtain confidential information about market traders. Bloomberg's
Christopher Pitt has more on this exclusive report.
Speaker 6 (05:09):
Traders at some of the world's biggest banks have allegedly
been misled by cold callers dangling the prospect of jobs
at the likes of Goldman, Sachs and Morgan Stanley in
exchange for details about their salaries, the makeup of their teams,
and even their desks confidential profit and lost statements. But
often the jobs don't exist, neither does the named caller
(05:33):
or their supposed employer, according to documents seen by Bloomberg
and ten people familiar with the matter who asked not
to be named given the sensitivity of the data. The
calls have instead been made by staff at Odin Partners,
a recruitment to marketing intelligence firm. According to the documents,
(05:53):
the company reportedly used the information gleaned from calls to
unsuspecting bankers and traders as part of what it calls
its markets mapping of key players trading in some of
the world's biggest asset classes, from rates to currencies. The
co founders of Odin Partner's declined repeated requests from Bloomberg
(06:15):
for an on the record response to the story, while
a director at the company didn't respond to multiple emails
and messages seeking comments in London, Christopher Pitt Bloomberg Radio.
Speaker 1 (06:27):
While executives at Odin Partners did not respond to those
requests for comment on the story, a lawyer from the
company told Bloomberg that the allegations were false. Black professionals
in the city of London say that efforts to increase
the number of black employees and underrepresented groups in financial
services have been heavily deprioritized more than four years since
(06:48):
the murder of George Floyd at the US sparked an
unprecedented desire for change to address racial disparities. Bloomberg spoke
to twenty black professionals who say that the city has
given up on achieving racial equality. Stephen add A Doyo,
former investment associated Columbia, thread Needle and founder of Beyond Education,
(07:08):
says that firms signed up to external programs like ten
thousand black interns without a plan in place to ensure
their future career progression.
Speaker 7 (07:18):
If you think about it, these companies didn't start these
programs right, So the only reason why they were even
working with ten thousand black interns or other initiatives is
probably because the other peers were working with those initiatives right,
and it's kind of like, oh, it's going to make
us look good. And I think the difficulty is that
with programs like that, there's no succession, so it's kind
of like, you know, we have interns for a bit
(07:38):
and then that's pretty much it. Now, some firms are
really good and will try and figure out a way
to retain that intern beyond an internship program, but for
the most part, most of the firms that signed up
to those programs is kind of like, hey, let's do
this program and look good.
Speaker 1 (07:51):
That was Stephen ad Adyo, founder of Beyond Education. Research
shows the pace of change has slowed. It will now
take fish years for the proportion of black talent in
the UK's financial and professional services to near four point
four percent, the percentage of black employees in the country's
working age population, and lastly, UK regulators plan to ease
(08:14):
bonus rules so that bankers can get payouts faster. The
Potential Regulation Authority is looking to abolish the three year
weight in the UK before any part of a bonus
can be paid. It's a change to a rule that
was put in place after the two thousand and eight
financial crisis to discourage excessive risk. Banks have pushed to
soften it as a way to make Britain more competitive
(08:37):
for financial talent. In a moment, I want to bring
you two exclusive bits though of in depth reporting on finance.
Will shure on that Headhunter story using fake identities to
dupe Wall Street traders. This is a practice known as rusing.
We're going to bring you all of the details of
(08:57):
that up next. And also on black workers in the
city of London who say that the drive for inclusion
is no longer a priority in the industry. That from
our own reporter Tea. Weare at a baio. But before that,
let's talk about what is happening in the Middle East.
Israel has killed the person thought to have masterminded the
October seventh attack, the Hamas leader Yea Sinwa. President Biden
(09:20):
says there's a chance to end the war, joining US
now is Boomberg's Stuart Livingston Wallace, who heads our coverage
of Middle East and North Africa news. Stuart, good morning
and thank you for your time. So the killing has
now been confirmed, what does it actually mean do we
think for Hamas?
Speaker 8 (09:38):
And there's a couple of options here. Number one, I mean,
on the face of it, it's a big victory for
Israel because that was sort of one of the chief
war aims was to eliminate that mass leadership, and they
haven't necessarily done all of them, but you know, this
was the big one, and he was certainly the face
of a mass particularly in regards as we said to
October the seventh last year and what happened around that.
But the second thing to think about, and as in
(10:00):
some respects this will be complicating matter because it's not
clear who his successor is and there's every chance that
whoever does get named as a successor doesn't necessarily carry
the same authority. So if you're going to have one
of the two parties involved in the conflict trying to
come to some sort of agreement on a ceasfar, which
I agree at the moment is a remote possibility, then
would they have the authority within her master to actually
(10:22):
enforce it and get people not only to lay down
their arms, but also to get all the remaining hostages released.
That is a little bit of an open question at
the minute.
Speaker 1 (10:30):
What does Person Biden's view then on what happens next?
Is there a US plan as I mean, the US
person is in Germany for what some are calling, you know,
his swan song, given that he's only got a few
more weeks in office.
Speaker 8 (10:42):
Yeah, I mean he's certainly optimistic. But I mean again
we've had that optimism repeatedly over the last several months.
You know, We've been told we're very close to a
deal and minute sort of never seems to go anywhere.
I mean, he is sending Anthony Blinkom back to the
region for we think the eleventh time in the last year.
So the clearly pressing for it, and I think his
(11:03):
optimism or at least his hope is being echoed by
other world leaders. Now again, whether that translates into reality
is a different matter, because we had the Israeli Prime
miers to come out last night and say very clearly
this war is not over and fundamentally what it wants
is two things. Number one is an incomplete capitulation by
her mass and number two or release of all the
(11:25):
hostages that are the remaining captivity. Again, not clear how
that can happen and what sort of time frame.
Speaker 1 (11:32):
And so you talk about the continuing war. What about
Israel's view then on the strike on Iran, something that
we've also been talking about and anticipating.
Speaker 8 (11:42):
Yeah, and we continue to anticipate. I don't think the
killing of Cinna necessarily changes the calculus there in terms
of what they were planning, as far as we understand
that there is some sort of agreen between the Prime
Minister and the Defense Minister. That happened a couple of
days ago. Nonetheless, that now needs to go to the
Security Cabinet, you know, which means periolically for a final approval.
(12:05):
The reporting has been out there seems to suggest they
will probably avoid the nuclear facilities, they will probably avoid
the energy facilities, which sort of leaves the military sides,
you know, potentially cyber attacks something along those lines. But
again you can hear my voice, it's really not clear
(12:25):
what exactly they will do and when.
Speaker 1 (12:27):
Yeah, indeed, okay, sorry that we will continue to follow
for our listeners. Stuart Thank you so much for your
time for your insights this morning. That has been a
big Stuart Livingston Wallace, who heads our coverage of the
Middle East and North Africa. After Israel killed the person
who was thought to have masterminded the attacks more than
a year ago against Israel, now traders that some of
the world's biggest banks have allegedly been misled by cold
(12:51):
callers dangling the prospective jobs at Wall Street banks in
exchange for details about their salaries, the makeup of their teams,
and even their death confidential profit and lost statements, but
often the jobs don't exist. This story is brought to
you by Bloomberg's finance reporter William Shaw, and Will joins
me now on this significant reporting. Will good to have
(13:12):
you on the program. Tell us a bit about what
has been happening with these calls.
Speaker 9 (13:18):
So basically this story is about allegations that relate to
Odin Partners, which is a recruitment firm based in London
and Asia. They say they've placed about nine hundred people
at jobs in international finance after the past decade or so.
Their clients include firms like City, Morgan, Stanley, UBS and
Deutsche Bank. Now the allegations that they face broadly that
(13:42):
for years until as recently as last year, they would
encourage staff to phone up traders using fate names for
themselves and for the company, and they then dangle the
possibility of a job, perhaps at Golden Sachs, perhaps at
Morgan Stanley that didn't exist, and the aim was try
and persuade the traders to hand over sensitive information about
(14:04):
their own salary, their p and L, the makeup of
their teams, which is very hard to come by in
the industry. And Odin would then share this with its
clients allegedly, And we should say, there's no indication or
no suggestion that any of the clients knew where this
information was allegedly coming from.
Speaker 1 (14:24):
What else do we know about these headhunters then and
their practices.
Speaker 9 (14:28):
I think there's a suggestion that the instruction to do
this was coming largely from the top. So people familiar
with the matter told us that executives at the firm
encouraged them to do this. And according to according to
people that we've spoken to and written communications that we've
seen as recently as twenty twenty two, James Hext, who's
(14:49):
one of the co founders of the company was encouraging
members of staff to lose.
Speaker 1 (14:55):
So then hang on, how big a breach of trust
or even of the law is this actually, So we.
Speaker 9 (15:03):
Spoke to a criminal lawyer who said that, well, obviously
not commenting on whether or not these allegations were true,
he was saying that potentially this could engage the Fraud
Act two thousand and six, these allegations, and that it
could move towards the territory of fraud by misrepresentation. Now,
I should say Odin have responded to this in a
(15:27):
letter to us last month. Their lawyers denied the allegation.
When we've spoken to them again this month, they've declined
comment in much real detail. What they say is and
I'll read this out. Odin Partners is currently in dispute
with those that they believe are responsible for the allegations
and has been advised not to engage publicly on the
(15:49):
issues raised by Bloomberg at this time.
Speaker 1 (15:52):
Okay, so the head hunter then talking about that, what
does it mean for the traders and the trade desks
potentially evolved.
Speaker 9 (16:03):
I think one of the things that was interesting speaking
to traders both who'd been allegedly targeted and just traders
more generally was that they weren't massively worried about this.
I think there's not much a bank might worry about
its P and L data being shared through false pretenses.
(16:24):
But I think one thing one of the things I
learned is perhaps that traders have focused very much on
the money that they make and perhaps less concerned about
issues like this. I think they also value the market
color that they pick up from they pick up from
headhunters during the kind of regular phone calls that they
have with recruiters all over the city of London.
Speaker 1 (16:46):
Anything else that we should know about this reporting, because
it's some in depth reporting and really pretty fascinating, are
the things that we should think about.
Speaker 9 (16:54):
I think one of the things that's really interesting about
this is that this recruitment isn't industry that has not
really been regulated in the wake of the two thousand
and eight financial crisis in the way that banks have.
Speaker 2 (17:08):
So there.
Speaker 9 (17:09):
I mean, what the reporting suggests is that allegedly there
are pockets of quite sort of colorful behaviors still going
on in this industry that you wouldn't find anymore in
regular banking. Also, it's like a hugely competitive area. There
are loads of headhunters all over London, and there's a
lot of money at stake, and I think that gives
(17:31):
you a sense as to why a company might allegedly
delve into unethical practices. A successful trader, a big name firm,
for example, can negotiate a compensation package worth millions when
they move banks. The placement fees for headhunters can be
around twenty five percent of that trader's first year total
(17:53):
comp and they tend to be capped somewhere around one
hundred thousand pounds for the recruiter, but it can go
quite a bit higher than that.
Speaker 1 (18:01):
So there's a lot at stake here. Thank you so much,
Will for bringing us your story. You can read it
in full on the terminal. Also on the Blueberg website,
Headhunter said to use fake IDs to do Wall Street traders.
That is Bloomberg's finance reporter Will Sure Now. Black workers
in the city of London say that inclusion is no
longer a priority for the financial and professional services industry.
(18:23):
Bloomberg Radio reported to at Adebayo has been speaking to
a raft of city workers past and present, who say
that recruitment efforts for underrepresented groups and diversity equity and
inclusion professionals have disappeared from firms in recent years, and
Tia joins me now in the radio studio for more
on this story that you've spent really weeks reporting on.
(18:44):
What have the people that you've spoken to said about
what has happened to inclusion initiatives.
Speaker 10 (18:50):
So, Caroline, one person actually summed it up really well,
and that person is Pauline Miller. She's got twenty years
of experience running firms across the city, including State Streets
and Barklay's, and what she said to me is that
at the moment, we're experiencing this perfect storm of economic headwinds,
industry backlash, and also disappointing results from initiatives, which is
(19:14):
driving a real pullback from a lot of city firms.
And that's been reflected in the accounts of black employees
that I've spoken to, many of whom wanted to keep
their identities private. They've said they've noticed subtle changes. So
fewer Black History Month speakers, for example, fewer networking events
for people of color. So we're not seeing the same
(19:34):
regulatory pressure that is present in the States just yet,
but firms are reassessing their commitments and that's proven in
the data as well. I spoke to the Taylor Bennett Foundation,
which is an organization that operates across the communications landscape,
placing diverse candidates in firms such as HSBC and Santander,
and they said that demand for their paid internship programs
(19:57):
has actually seen a twenty five percent to year on
year since twenty twenty two, and that's despite seeing a
big uptick in interest in twenty twenty particularly following the
murder of George Floyd. And that drop in demand is
coming specifically from financial services and city firms. I also
spoke to Junior Garber, who founded a similar group called
(20:18):
Equity City, which works to get the minority candidates into
the city with a focus on insurance, and he said
the same thing. Budgets are dwindling, and really at the
heart of the problem seems to be this lack of
concerted effort from firms. I spoke to one person, Mark Lomas,
who's the head of culture at Lloyd's of London, and
he set out the problem really during our conversation. He said,
(20:39):
making real change takes very deliberate and targeted effort, and
not all firms are willing to do that.
Speaker 2 (20:44):
So here's a bit of what he said.
Speaker 11 (20:46):
I think we see this challenge across lots of employers,
and that is essentially and making sure that your processes
are fit for purpose. You are deliberate in how you
go out to attract talent, you have inclusive recruitment practices,
and then you have the ability and the practices to
retain talent. I think at the Lloyd's market, why we've
(21:08):
been so successful is because we've had a very deliberate
approach to it, so it's not impossible.
Speaker 1 (21:16):
So that was Mark Loma's head of culture at Lloyd's
of London that you spoke to. You also report on
black workers facing a ceiling at work or leaving. It
is having an impact on people in their working lives.
Speaker 8 (21:29):
Yeah.
Speaker 10 (21:30):
From my conversations, it seems that an unintended consequence of
this urgency to act on diversity felt by a number
of city firms in twenty twenty was that some of
the DEI strategies that were focused on recruiting black talent
were rushed and they did it without adjusting company culture first.
And that's really showing in the experiences of black employees
(21:50):
and crucially the number of them leaving. So the data
shows that black talent is leaving firms in the city
before reaching the top fact the top ranks, so at
UK Law firms, black people are four times more likely
to leave than their white counterparts. And investment banking, actually
the figure for representation at a more senior levels it's
just zero point five percent, and we can see in
(22:12):
the ethnicity pay gap that's persisted too, particularly for black workers.
So that also suggests concentration at a junior level. But
employees that I've spoken to really speak to this phenomenon
of joining through a black focused recruitment scheme like the
Taylor Bennett Foundation all ten thousand black interns, and then
feeling abandoned without a clear pathway to progression in their career,
(22:33):
and that contributes to attrition to them leaving. So one
of those people was Karening Mipeiri. She's a former private
equity investment operations analyst and she's now an analyst a
large UK bank, and she says that since twenty twenty
there has been divestment from DEI and it's hurting her experience.
Speaker 12 (22:50):
Now it feels a bit more like that conversation has
almost sort of been put to the back burner and
with the economic contraction sort of companies having to reconcile
with overhead and challenges. I think the and I was
the first thing to go really and it was subtle
things like, you know, maybe there wouldn't be as many
(23:11):
networking events for people from saying background, and maybe for
Black History Months they wouldn't do quite so many things,
and they wouldn't be quite so many speakers. But bit
by bit it does feel as though it's not really
as much of a priority as it used to be,
and I think that really trickles down into then your
working life as a black woman.
Speaker 1 (23:30):
So that was Karen Mupereiri, one of the people that
you spoke to in this investigation. You've also done some
graneur reporting. I mean, you've talked a lot about the
data and data tracking is another issue the BAME umbrella,
which in the UK refers to black Asian and minority
ethnic people. There's also an issue with this in the data.
Speaker 10 (23:52):
Yeah, so that was actually one of the most interesting
parts of this reporting, the existence of this data gap
as it pertains to black talent in the city. So
despite making these pledges to sort of increase equality, in
twenty twenty. Most firms actually don't publish data specifically about
their black employees, and it's also very difficult to find
(24:13):
published progress on these targets that they did set in
twenty twenty. And it's slightly to do with the law
in the UK around data collection for HRD appartments. They
rely on something called self reporting, so black employees and
other employees have to volunteer that ethnicity information, that ethnicity
information about themselves and it hurts the progress of DEI.
(24:36):
So one professional I spoke to who was the first
London based global DEI director, d an Asset Manager, said
whilst they were in that role, they were only able
to collect about sixty five percent of the ethnicity data
for the company from employees and that severely inhibited their
work because they couldn't back it up with these data points.
(24:56):
And they say that the work was then reduced to
performative at and when I spoke to groups who try
to lobby for change like change the Race Ratio, which
tries to get more Black representation at a board level,
they said quite simply, what gets measured gets done. So
without the data, it's really hard for firms not only
(25:17):
to track their progress, but for DII professionals to justify
that investment into what they're doing. And it's something we
see repeated across the city, across different firms.
Speaker 11 (25:27):
So until that problem.
Speaker 10 (25:28):
Gets solved, perhaps the pace of change will stay stagnant
or even slow.
Speaker 13 (25:33):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 1 (25:39):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 13 (25:45):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 1 (25:51):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hip and.
Speaker 13 (26:00):
I'm Stephen Carol. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg Daybreak Europe
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