Comparing the Times Square FAILBomber to Wall Street FAILBrokers (both seem like terrorists, don't they?)

Today in Anecdotes That Make Us Question Our Career Choices

nplusonemag:

“Ms. Thurman said Mr. Shahzad got up early every morning and left to work nicely dressed, and had told her that he worked on Wall Street. “I think he caught the train to New York,” she said.”

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This reminds me of something HFM said about Long-Term Capital Management: “So Meriwether, I’ve never met him, but he was an example that I always cited when I would go and have one of my periodic fits on the desk about how there’s no penalty for failure in the investing world. Which is an exaggeration. There’s not no penalty for failure, but it’s a surprisingly small penalty for failure. When he was at Salomon a guy working under him got Salomon caught up in a scandal relating to manipulation of US Treasury auctions, which nearly blew up Salomon Brothers; then he started Long-Term Capital Management, which blew up; and gets money again at JWM. And JWM blows up! So how many times do you need to blow up before your license to be a hedge fund guy gets pulled? And, maybe that’s picking on Meriwether unfairly. But the amazing thing about that is the incentive structure at a hedge fund is so skewed to the upside that it seems to me like the only way you could restrain hedge fund portfolio managers from taking too much risk is either they have to put a lot of their own capital in the fund or there has to be a really big penalty for spectacular failure—to constrain hedge fund portfolio managers from taking advantage of the trader’s option, the fact that they get a big chunk of the upside but it’s not their money on the downside. The same is true, maybe even more true of proprietary traders at banks. You see people who’ve blown up in spectacular fashion go on to get another high-profile job. And the things you hear are, “I want to hire him; he’s learned a very expensive lesson.” Or, “He’s proved he’s a risk taker.” I can’t tell you how many time I’ve heard that! Yeah, he’s proved he’s an irrational crazy risk-taker!”

via newsweek.tumblr.com

I do think it's pretty neat how white guys in suits can get away with all sorts of crap.

Makes me think that all this "moral" stuff we were taught growing up was just to make us easy prey.

Posted via web from thepete's posterous