Morning Coffee: When a 27 year-old broker makes $300m in profit. 2025 could be a good year for traders, too

$300m is a lot of money. It was even more money in the late 1980s, when Howard Lutnick, the man who might now be Donald Trump's Treasury Secretary, made $300m in profit for Cantor Fitzgerald. Lutnick joined Cantor aged 22 in 1983; he became CEO there seven years later, aged 29.

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That $300m helped him on his way. Cantor was one of the biggest treasury brokers at the time, and the Economist reports that Lutnick made his $300m in three chunks. Each time, he says the boss liked him more. “The first time I made him $100m, he liked me; the second time I made him $100m, he loved me; and the third time I did it—family.” 

Lutnick was already a nepo hire. He got the job at Cantor through a family friend after his academic parents died of cancer one after the other. Bernie Cantor, the founder and his boss, took him under his wing and when Bernie too died, Lutnick gained control of the firm. Lutnick then continued to hire more family and friends, following an ethos that it made sense to recruit them - so long as they were also conscientious and capable. 

Filling Cantor with friends and family made September 11th 2001 particularly difficult to bear. 685 people at Cantor died during the terrorist attacks on the World Trade Centre, including Lutnick's brother.

Now, Lutnick - who owns 60% of Cantor and has a net worth in excess of $1bn, might be moving on from the firm where he's spent all his adult life. He's in the running to be Treasury Secretary in the second Trump administration, and is Elon Musk's top pick. - Lutnick would "actually enact change," tweeted Musk last week, before claiming that rival treasury candidate, hedge fund manager Scott Bessent, would be "business as usual." 

To the extent that Trump listens to Musk, this sounds promising. However, the Financial Times reports this morning that Trump isn't convinced by either Lutnick or Bessent as Treasury Secretary, and is still considering other people like Apollo CEO Marc Rowan, former Federal Reserve governor Kevin Warsh, and Tennessee senator Bill Hagerty. 

Lutnick may therefore be displaced. Even if he is, he's playing a crucial role in filling 4,000 other roles in the Trump administration and retains a degree of power for that reason. Most of the big appointments are Trump's friends rather than Lutnick's though. It's not clear whether any of them made $300m before they were 30.

Separately, just as M&A and ECM bankers are expectant of a strong 2025, salespeople and traders might have a fine year too. The FT notes that trading assets at US banks have hit $1 trillion for the first time since 2008 as banks have been rebuilding their market making businesses. "You see the cash that the banks had sitting on the sidelines flowing recently into their trading books," says the CEO of BankRegData, which compiled the data. 

It augurs well for next year, although it may not all be plain sailing. Banks have been thriving since Trump was elected; Telsa-excepted, tech stocks have not. Marco Kolanovic, the (persistently bearish) ex-JPMorgan chief market strategist thinks the halo might fade as geopolitical realities reassert themselves. 

Meanwhile...

The new best banking teams to work on are data centre teams. JPMorgan has set up a dedicated infrastructure team as has Deutsche Bank. One rival banker admits his firm is juggling so many data-center deals that it doesn’t have enough staff to cope with the workload. (Bloomberg) 

Goldman Sachs loved Fang Fenglei, the chief executive of its china venture and lauded him as “extraordinary” and a “preternatural networker in a country of networkers”. It ended up saying things like, "We rented his name but we chose someone who tried to screw us in the end.” (Financial Times)  

JPMorgan had a precious metals warehouse in east London but it leaked, forcing the bank to find alternative premises. It's now filed a £21.5m lawsuit against the owner of the warehouse. (Financial Times) 

It's ok: Nomura clients are returning after the market manipulation probe. (Bloomberg) 

Nestor Paz-Galindo says he might hire some new bankers at UBS. “We are growing, selectively hiring and gaining market share in key strategic areas as part of our accelerated strategy.” (Financial News)  

Legal and General is cutting up to 20 investment roles and dozens of support positions. (Financial Times) 

Erik Maris has agreed to join boutique advisory firm Perella Weinberg in Paris. He was formerly managing partner of Lazard France. (Bloomberg) 

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