Dimon is the new John Pierpont Morgan but the coming men are the wonk and the axeman

For 16 years, Jamie Dimon and Sandy Weill were the ultimate Wall Street power team, starting with a tiny finance company called Consumer Credit and building it through aggressive acquisition into Citigroup, the largest bank in the world.

Geithner, a career technocrat who’s perfectly comfortable rooting around in the minutiae of capital adequacy requirements and the like, is as good a man as you could hope to be making such determinations, and Bernanke is very lucky to have him at the New York Federal Reserve.

Of course, the best efforts of Dimon, Paulson, Bernanke, Geithner and many others are not stopping New York’s investment banks from seeing their deal-flow dry up. Many jobs have already been lost; more will surely go. Which means that the most in-demand skill-sets have nothing to do with coming up with clever new structured products and brokering giant mergers. Rather, they have to do with firing people.

To that end, Citigroup has poached Mark Rufeh from Credit Suisse, giving him the bland-sounding title of ‘chief administrative officer and head of productivity for the institutional clients group’. In reality, Rufeh is a master at the art of culling the greatest number of people while making sure that those who remain still manage to earn as much money for his company as possible. If Rufeh and his counterparts elsewhere on the Street really get cracking, there could be tens of thousands of layoffs over the course of this year – which in turn means billions of dollars saved in annual bonuses come January. Gone are the days of the rainmakers and dealmakers: the wonk and the axeman cometh.

Felix Salmon blogs for Portfolio.com

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jonners

May 11th, 2008 2:05am Report this comment

Good Article as always Felix.

Would note though that Rufeh's specialism at Lehmans and Credit Suiise was "organic" productivity, gradually taking out non-people costs, streamlining and increasing automation. Will be interesting to see him in this role at Citi where clearly the expectation is axe-man.

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