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A Young Ex-Goldman Trader Thinks His $8.25 Million Bonus Was Too Low

Deeb Salem

Getty Images/ Eugene Gologursky

Deeb A. Salem and Lauren C. Salem.

A young former Goldman Sachs trader thinks that the $8.25 million bonus the bank awarded him was too low, Bloomberg News reports.

Deeb Amin Salem, a 35-year-old star mortgage trader, told his mom he was expecting $13 million for his 2010 bonus, the report said citing Financial Industry Regulatory Authority arbitration documents. Instead, he got $8.25 million. 

The year before, Salem was paid a $15 million bonus. That was more than Goldman CEO Lloyd Blankfein took home for his 2009 bonus, Bloomberg pointed out.

According to the report, Salem thought he was being punished for what he wrote in his 2007 self-evaluation. His review was made public back in 2011 by a U.S. Senate panel.

Here's what he wrote about what he did well during the mortgage meltdown: 

"In May, while we were remain[ing] as negative as ever on the fundamentals in sub-prime, the market was trading VERY SHORT, and susceptible to a squeeze. We began to encourage this squeeze, with plans of getting very short again, after the short squeezed [sic] cause[d] capitulation of these shorts. This strategy seemed do-able and brilliant, but once the negative fundamental news kept coming in at a tremendous rate, we stopped waiting for the shorts to capitulate, and instead just reinitiated shorts ourselves immediately."

Salem joined Goldman in 2001 after graduating from Princeton. While at Goldman, he became the head trader in the structured product group and led that desk during the mortgage crisis.

According to Bloomberg News, a $3 million bonus for his 2011 performance is what caused him to leave for a hedge fund in 2012. He's currently working as a portfolio manager for GoldenTree Asset Management. 

A spokesperson for Goldman told Bloomberg News that Salem's claims are "utterly ridiculous." 

Salem's claims were recently rejected by a FINRA panel. His attorney has just filed a petition in New York State Supreme Court.

Salem is seeking $16.5 million from the bank ($9.5 million and about 41,000 shares in deferred compensation), the report said. 



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29 Successful People Who Wake Up Really Early



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howard schultz

Spencer Platt / Getty

Howard Schultz gets up at 4:30 a.m.




It's no coincidence that so many successful people get up early. The early bird schedule is good for responding to people and events around the world, getting a head start on people in your own time zone, and also finding time for exercise and family. What's more, research shows that early risers tend to be happier and more proactive.

While a late schedule may make sense for some occupations, most people should take notes from the executives and other successful people on this list.


GE CEO Jeff Immelt

GE CEO Jeff Immelt

Immelt gets up at 5:30 in the morning every day for a cardio workout, during which he reads the papers and watches CNBC, he told Fortune. He claims to have worked 100 hour weeks for 24 straight years.  

Xerox CEO Ursula Burns

Xerox CEO Ursula Burns

AP Images

Burns uses early morning hours to get caught up on emails, getting up at 5:15 and sometimes working until midnight, she told Yahoo Finance.

She also uses the time to stay in shape, scheduling an hour of personal training at 6:00 A.M. twice a week, according to Laura Vanderkam's "What The Most Successful People Do Before Breakfast."

Fiat and Chrysler CEO Sergio Marchionne

Fiat and Chrysler CEO Sergio Marchionne

Marchionne splits his time between Turin, Italy and Auburn Hills, Mich.

When in the U.S., he gets up at 3:30 in the morning to deal with the European side and still have time for everything else, he told "60 Minutes."

"You and I have lived among workaholics in our day. I have never seen anything like Sergio," Obama "car czar" Steve Rattner said on the show. "When it was a holiday in Italy he'd come to America to work. When it's a holiday in America he goes to Italy to work. Saturdays and Sundays were just workdays to him and for his whole team. And anybody who signed up with Sergio signed up for the program.

PIMCO Co-founder Bill Gross

Running the world's largest bond fund in the world from California pretty much guarantees early mornings. According to Fortune, Gross wakes up at 4:30 in the morning to check out the markets and gets into the office by 6. 

Square CEO Jack Dorsey

Dorsey described his morning routine to New York Magazine, revealing that he wakes up at 5:30 to meditate and go for a six-mile jog.

He kept up that routine during a period where he shuttled back and forth between Square and Twitter, spending around 8 hours a day at both companies. 

Richard Branson, founder and chairman of the Virgin Group

In an interview with Business Insider's Aly Weisman, Branson revealed that he wakes up at around 5:45 in the morning, even when staying at his private island, leaving the curtains drawn so the sun gets him up. 

He does his best to use those early hours to exercise before an early breakfast and getting to work. 

PepsiCo CEO Indra Nooyi

Nooyi wakes up as early as 4:00 A.M., telling Fortune that "They say sleep is a gift that God gives you ....that's one gift I was never given."

In a speakers series at Pepsi, she revealed that she's at work every day by no later than 7.

General Motors' CEO Dan Akerson

General Motors' CEO Dan Akerson

GM website

Akerson told the AP he will "rarely sleep past 4:30 or 5," waking up so he can talk to GM Asia before it gets too late. He calls it the best job he's ever had: "It's complex and interesting and exciting."

But the stress gets to him too, leading to "a lot of sleepless nights."

Virgin America CEO David Cush

Virgin America CEO David Cush

Getty Images

Cush described his morning routine to the AP: Wakes up at 4:15 a.m., sends emails, calls business associates on the East Coast, and that's before listening to Dallas sports radio, reading the paper and hitting the bike at the gym.

Apple CEO Tim Cook

Cook is known for getting up and sending out company emails at 4:30 in the morning, according to Gawker's Ryan Tate. By 5 AM he can be found in the gym. And he works late too, priding himself on being the first in the office and the last out.

Disney CEO Bob Iger

Disney CEO Bob Iger

Business Insider

Iger told the New York Times he gets up at 4:30 every morning. He takes the quiet time to do a number of things, claiming to read the papers, exercise, listen to music, look at email, and watch TV all at once. Even though it's quiet time, he's "already multitasking."

Hain Celestial Group CEO Irwin Simon

Hain Celestial Group CEO Irwin Simon

AP Images

Simon wakes up 5 a.m. and immediately starts working, going through emails and calling operations in Europe and Asia. He also prays, walks the dog and exercises before his kids wake up, often scheduling a breakfast meeting before arriving at his Long Island office by 9 a.m.

"I have always been an early riser. As you can see, I accomplish a lot in four hours and now feel pumped for the remainder of the day," Simon told National Post, also saying he works 75 to 100 hours a week running the company behind brands like Rice Dreams and Celestial Seasonings.

Former Peugeot GM Jean-Martin Folz

Former Peugeot GM Jean-Martin Folz

AP Images

Now headed to the board of Eutelsat Communications, the former head of Peugeot was said to catch the 4 a.m. train from Dijon to Paris and would finish up a briefing paper within minutes of arriving to his office at 7 a.m. According to The Guardian, Folz also had his Renault Espace converted into an office so he could work while commuting.

Starbucks CEO Howard Schultz

"I get up at 4:30 every morning to walk my three dogs and work out. Around 5:45 a.m. I make coffee for myself and my wife, using an 8-cup Bodum French press," Schultz told Bloomberg Businessweek

The coffee magnate still gets to the office by 6 a.m., according to Portfolio.com.

Brooklyn Nets CEO Brett Yormark

The youngest CEO in the NBA told SellingPower that he gets up at 3:30 in the morning in order to get to the office by 4:30. From there, he works out and sends motivational emails to his team.

He takes it easy on the weekends, arriving at the office by 7 a.m. instead.

Former Oxygen Channel CEO Gerry Laybourne

Former Oxygen Channel CEO Gerry Laybourne

Getty Images

The founder of Oxygen is awake by 6 a.m. and out of the house a half hour later. If you get up early enough she might even take you under her wing, she tells Yahoo! Finance:

"Once or twice a week, I go for a walk in Central Park with a young person seeking my advice. This is my way of helping bring along the next generation. And if someone is up early in the morning then they are serious about life. I can't take time at the office to do this, but doing it in the morning allows me to get exercise and stay connected with young people at the same time."

Cedar Fair Entertainment CEO Matt Ouimet

Cedar Fair Entertainment CEO Matt Ouimet

Getty Images

Ouimet likes to get to the office early, waking up at 5:30 in order to get out of the house by 6 a.m.

“I’ve always been anxious to get to work: game time," he told Yahoo Finance.

Cisco CTO Padmasree Warrior

Cisco CTO Padmasree Warrior

Getty Images

After waking up at 4:30 a.m., Warrior spends an hour on email, reads the news, works out, and gets her son ready for school. She is still in the office by 8:30 at the latest, according to Yahoo Finance.  

Procter & Gamble CEO A.G. Lafley

The head of Proctor & Gamble, who took the job again after a hiatus, told Fortune that he makes it a habit to be up between 5 and 5:30 a.m. and at his desk by 6:30 or 7.

He also takes care to have a good breakfast:  "I used to eat virtually nothing for breakfast. Now I have a V-8 juice, half a bagel, and a cup of yogurt. And I eat five or six times a day. It's about managing your glycemic level. You don't want to boom and bust."

Unilever CEO Paul Polman

The Dutch-born Polman gets up at 6 a.m. so he can run on the treadmill in his office. This also gives him time to "reflect on the work day ahead," which is probably pretty hectic at a multinational food and detergent company.

AOL CEO Tim Armstrong

"I usually get up at 5 or 5:15am," Armstrong told The Guardian. "Historically, I would start sending emails when I got up. But not everyone is on my time schedule, so I have tried to wait until 7am. Before I email, I work out, read, and use our products. By 7am, I usually have questions or feedback about AOL. I am not a big sleeper and never have been. Life is too exciting to sleep."

He says he tries to get six hours of sleep a night, but often ends up operating on less. "It isn't ideal," he admitted.

Newton Investment CEO Helena Morrissey

Morrissey told The Guardian that she gets up "at 5 in the morning, sometimes earlier," and immediately starts sending emails until her kids get up. She has family dinner scheduled at 7:30 p.m. but works again after that, sometimes for as much as two hours, prepping for the next morning's meetings.

She admits to feeling a bit sleep deprived. But that's the job, especially when you've got nine children in addition to running a global investment company.

Incoming GM CEO Mary Barra

Incoming GM CEO Mary Barra

General Motors

Barra, who will replace current CEO Dan Akerson next year is a GM lifer and will be the first female head of a major auto company.

She's in the office before many people even wake up, usually by 6 A.M. according to the New York Times.

Starwood Hotels CEO Frits Van Paaschen

The former Coors CEO makes a habit of going for a run or bike ride at 5:50 in the morning and being ready for the day by 6:30, according to "What The Most Successful People Do Before Breakfast."

According to the AP, he might be America's fittest CEO, and completed his first Ironman triathlon earlier this year in 12 hours and 44 minutes. 

It's that effort that's helped him succeed. One of the three life lessons he shared with Bloomberg Businessweek was that "effort is more important than talent." Another excellent lesson was that "anyone who believes he is a self-made man has a very selective memory." 

Former PepsiCo CEO Steve Reinemund

Former PepsiCo CEO Steve Reinemund

AP Images

While running PepsiCo, this Marine veteran would run 4 miles every morning at 5 a.m., according to CEO.com. This was the only way he could be sure he would have time for his run and would not get caught up in corporate affairs. He also made a habit of reading The New York Times, The Wall Street Journal, Financial Times, and The Dallas Morning News before heading to work.

Now dean of the Wake Forest University School of Business, Reinemund has invited students and faculty to join him on early morning jogs he calls "Dawn with the Dean," according to the Business Journal.

Baltimore Ravens Head Coach John Harbaugh

Baltimore Ravens Head Coach John Harbaugh

Wikimedia Commons

For ESPN, Harbaugh chronicled his work week as he prepared for a game with the Chicago Bears. He usually wakes up well before 6 A.M. and often works until 11. On at least a few nights of the week, he sleeps on his office couch in order to wake up earlier, work later, and get down to work faster.

And despite a packed schedule where pretty much every minute is taken up with watching tape, meetings, or practices, he manages to work out almost every day. 

Vogue editor-in-chief Anna Wintour

Vogue editor-in-chief Anna Wintour

Getty Images / Gareth Cattermole

The famously intense magazine and fashion icon wakes up every morning at 5:45 to play an hour of tennis, according to The Guardian. After that comes a daily blowout at quarter to 7 to maintain her famous hairstyle. 

Former presidents George HW Bush and George W Bush

The first Bush would get up at 4 a.m., go running, be in the office by 6 a.m. and stay up until 2 a.m. "He was a horror," said a former White House nurse who had to try to keep up with him.

The second Bush kept a similar schedule, going to the office by 6:45 a.m. and often holding meetings at this ripe hour, according to The NYT.

So did W. Bush's cabinet. Colin Powell put in "perfectly appalling" hours, arriving to the office at 6 a.m., and not leaving until after 7 p.m., according to his former students. Condoleeza Rice woke up every day at 4:30 in the morning in order to get to the gym before work.



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16 Words That Will Make You Sound Like A Wall Street Hotshot



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The financial markets are much more complicated than just stock market price-earnings ratios and bond market interest rates.

Thanks to complex statistics-based theories and the explosion of derivatives, reports analyzing the financial markets are now riddled with incredibly intimidating jargon.

We selected some of the key terms that are both advanced and also used pretty frequently by Wall Streeters to describe what's going on in the markets.

Learning to use them will make you sound like a real hotshot.


Crack spread

Definition: The "crack spread" is the difference between cost of crude oil and price of a refined petroleum product, usually using gasoline and distillate fuel. Both single and multi-product crack spreads are calculated. The most common multi product figure is the 3:2:1 crack spread, calculated by subtracting the cost of three barrels of crude oil from the price of two barrels of gasoline, and one barrel of distillate.

Use: Crack spreads are a useful way to look at supply trends and refinery margins in different markets, as it compares a locally priced commodity (wholesale products) to a globally priced one (crude oil). Crack spread futures are used by independent refiners to hedge against adverse price movements.  

Source: U.S. Energy Information Administration

Contango

Definition: "Contango" is when the prices along a futures curve rises successively as the contracts' expiration increases. More basically, it is when the futures price is trading above the spot price for a commodity.  

Use: If a commodity is in contango, it usually reflects weak demand today or strengthening demand over time. The obvious current example is the natural gas market, which is in severe contango.  

Source: Options, Futures, And Other Derivatives

Backwardation

Definition: Backwardation is the opposite of a contango.  It occurs when prices in the futures chain fall as the contracts grow more distant in time. The futures price will be below the spot price.    

Use: Backwardation tends to occur when there are deflationary expectations for a commodity. Recently, we've seen backwardation in the silver market. 

Source: Options, Futures, And Other Derivatives

2s10s

Definition: This term refers to the difference in yield between a sovereign debt issuer's 2 year bond (2s) and its 10 year bond (10s). 

Use: A steeper curve, where the yield on the 10 year is higher than the 2 year, indicates an increasing growth and/or inflation expectations. 

Duration

Duration

Definition: Duration is a weighted average of the times that interest payments and the final return of principal are received. The weights are the amounts of the payments discounted by the yield-to-maturity of the bond.

Duration is also used to describe the risk of a bond as reflected by the change in price as the market interest rate moves.

Use: Duration allows the comparison of bonds with different maturities and coupons. A bond with a higher duration is riskier and will likely have higher price volatility. 

Source: Options, Futures, And Other Derivatives

Convexity

Convexity

Definition: Convexity is the first derivative of duration, so it measures the sensitivity to interest rates of a bond's duration.

If a bond exhibits positive convexity, the price increases at an accelerating rate when market interest rates fall.  And vice versa.

Use: Generally used as a risk management tool for a bond portfolio, along with duration. 

Source: Options, Futures, And Other Derivatives

Swap spread

Definition: A swap spread is the difference between the rate paid on an interest rate swap and the rate of the most recently issued treasury with the same maturity as the swap.

Use: Higher swap spreads reflect higher risk in the bond market. 

Source: Investopedia

Alpha

Definition: Alpha is a measurement of a portfolio's risk adjusted return.  

Use: Often used to measure fund manager's performance. 

Source: Corporate Finance

Delta

Delta

Definition: Delta is the the spot change in the price of a call (or put) option relative to the change in the price of the underlying stock.

Use: Delta hedging is a strategy that aims to reduce the risk from movements in an asset price by offsetting positions at a ratio determined by delta. 

Source: Options, Futures, And Other Derivatives

Gamma

Gamma

Definition: Gamma is the first derivative of delta, and measures its rate of change. 

Use: A trader may seek to minimize Gamma when delta hedging, so as to make the hedge effective over a wider variety of price movements.   

Source: Options, Futures, And Other Derivatives

Theta

Theta

Definition: Theta measures the "time decay" of an option, it captures the sensitivity of the price of the option to elapsed time as the option approaches maturity.

Use: Options can either be exercised immediately or held until a date nearer its expiration. Theta can give an idea of how much the price of the option might move as it approaches maturity. 

Source: Options, Futures, And Other Derivatives

Vega

Vega

Definition: Vega is the sensitivity of the price of an option to volatility. 

Use: Especially important in today's volatile market, volatility can significantly affect certain options strategies. 

Source: Options, Futures, And Other Derivatives

Implied volatility

Implied volatility

Definition: Implied volatility is the solution value for volatility in an option pricing model like Black Scholes, the value implied by the market price of an option and its underlying security. 

Use: Used in options pricing, particularly for Black Scholes. 

Source: Options, Futures, And Other Derivatives

Straddle/strangle

Definition: A long straddle involves purchasing a put and call for a security at the same strike price and expiration. The trader will profit should the price move a long way in either direction. A long strangle is similar, except that the options have different strike prices. 

Use: Allows a trader to profit if a security moves, the only potential loss is the price of the options. This is a strategy for volatile markets, in that a trader might expect a big move, but is unsure of the direction.   

Source: Options, Futures, And Other Derivatives

Prepayment risk

Definition: Prepayment risk comes from the possibility of an early, unscheduled return of the principal of a bond or other fixed income security, usually a mortgage-backed security.

Use: Fixed income securities are used to provide a steady cash flow, should the principal be paid early it could cause problems in the future. This is a particular risk for mortgage backed securities. 

Source: Investopedia

Reinvestment risk

Reinvestment risk

Federal Reserve Bank of St. Louis

The federal funds rate target has never been lower, indicating that commercial interest rates are at their lowest levels ever.

Definition: Reinvestment risk stems from the possibility that payments from an investment, usually a bond, occur when market rates are low.   

Use: This is a particular risk for pension funds that have a required rate of return. Should an investment end early, they may be unable to find a suitably high rate elsewhere. This risk is particularly high when interest rates are falling.  

Source: Investopedia



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Posted by Johns Shin
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