7 ms·
> It seems like a big investment and a lot of hard work by a lot of people! It's too bad they were using it to defraud people. A great deal of the financial in
by wpietri 5y ago
> It seems like a big investment and a lot of hard work by a lot of people! It's too bad they were using it to defraud people.
A great deal of the financial industry uses a lot of money and brainpower to play zero or negative-sum games. The more egregious of those negative-sum games are eventually made illegal, and some of the people playing them get punished. But speaking as somebody who used to write software for financial traders, it's a relatively short trip from "zero-sum game that is currently legal" through "negative-sum game that could well be legal" to "negative-sum game where we think we won't get caught".
It's true that one can societally justify a fair bit of that effort by pointing at things like more liquid markets, reduced trading costs, more accurate pricing, and the like. But approximately nobody trading for a living gets into the business because they care about any of those things enough to devote their lives to them. They're there to make money, and things like marketplace sanctions, regulatory investigations, and criminal enforcement are just another part of the cost-benefit analysis.
When I was in the industry floor trading was still the focus. One slow day at the Chicago Board of Trade there was a guy in a polar bear suit walking around the trading pits. One trader turns to another, says, "I'll give you $100 if you punch the polar bear." The second one shrugs, takes the money, walks over, and punches the bear. Turns out the person in the mascot suit was wearing glasses, so they end up with a cut on their face and blood trickling down. It also turns out that the bear was there to raise money for the zoo, and some CBOT bigwig was on the board of the zoo. If I recall rightly, the punching trader was banned for life. The colleague who told me this story just smiled and, referring to the $100 gained, said, "Bad trade."
I'm sure that there are plenty of people in the industry who look at these 10 guys and don't say, "What an outrage against the investors," or "I'm shocked that they'd tarnish the name of our industry that requires public confidence to function", but instead just smile and say, "Bad trade."
- hangonhn 5y agoI used to work on the tech side of finance too. The hedge fund where I worked had a number of PIPE related violations where they ended up eventually settling and paying a fine without admitting guilt. For them it was just the cost of doing business. Breaking the rule and profiting minus the cost of the fines would just be a "good trade" to them.
- gotaquestion 5y ago"I'll give you $100 if you punch the polar bear." Sounds like a story for a sequel to "Liar's Poker"!
- blantonl 5y agoAnd the name of the book: "Bad Trade"
- spaetzleesser 5y agoFor a while I knew guys that worked at hedge funds. Their whole thinking was about beating the competition and screwing as many people as they could while not being caught. They openly admitted that the taxpayers were stupid bailing out the industry in 2008 and kind of laughed at it. It’s a terrible industry and it’s shocking we allow them to run the country.
- Rury 5y agoI mean to be fair, bailing them out, was also bailing us out. Banks can borrow some of people's money to fund mortgage loans. It just happened many loans at the time did so, and soured due to irresponsible lending. If they didn't bail them out, and you had 20k deposited in a bad bank; good chance it was simply gone. Bailing out the banks, guarantied that the innocent people got their deposited money back.
- pm90 5y agoThe bailout was required to keep the financial system running which keeps literally everything else running. Supply chains would have broken down overnight without the availability of capital. If the major financial firms had shut down it would have had much worse effects than people losing their savings.
- uoaei 5y agoYou are describing a hostage situation. I would hardly consider that a healthy economy nor something worth defending.
- chiggsy 5y agoWe are the hostages.
- SturgeonsLaw 5y agoThat's fine, there were other options, we could have bailed the banks out financially to keep the economic wheels turning, and convicted a few bank executives to send a message that there are real world consequences to a group who are far too comfortable with fines being the cost of doing business. Too big to fail? Dubious, but ok. Too big to jail? No. Throw a CEO behind bars and the finance industry keeps on going but it scares the shit out of others who would misbehave.
- oa335 5y agoworked in chicago trading for years. that attitude is endemic.
- paulpauper 5y agopunch means a knockout punch to face hard enough to break the lens of the glasses. would not want to piss that guy off
- maccard 5y agoMy sunglasses frame is hard plastic and would likely break with far less impact than the lens.
- wpietri 5y agoI had always imagined it as wire rims, where even if the lenses are unbroken you could get a bit of a gouge or a cut from the wire around the nosepiece. Anyhow, it turns out that I may have heard an exaggerated version of it. This version merely has it as a bruise: https://www.google.com/books/edition/Traders_Tales/NyeVNsWvJHAC?q=cbot+polar+bear&gbpv=1#f=false https://www.google.com/books/edition/Traders_Tales/NyeVNsWvJ...
- eMSF 5y ago>"I'll give you $100 if you punch the polar bear." Instead of me saying I don't believe anything about this story, let's have a thought experiment: how badly would you have to need $100 right here and now to punch someone hard enough to bleed, nevermind the consequences, to have it? But yeah, I don't believe one bit of this.
- nieve 5y agoUnfortunately there are some people who'll harm others for a reasonably small amount of money even if they've already got plenty. I've encountered people who'd do this even if they were comparatively well off.
- lupire 5y agoAs explained in the comment, the puncher didn't know that it would smash hidden glasses and bleed. It was a dare, not a job. It's not about the payout, it's about the challenger having a little skin in it.
- irrational 5y agoI believe it. I’ve met many people who would do far stupider things for $100.
- SamPatt 5y agoYou don't believe that boredom, entitlement, and poor decision-making occasionally combine to produce behavior like this? This is middle school stuff. Plenty of adults act this way under certain circumstances.
- wpietri 5y agoFor sure. Traders are (or at least were) a special breed. It was mostly young white men, a lot of them with quick reaction times and poor impulse control. The job required outsized self-confidence, and then rewarded it with a lot of money, which often turned into fast living. I worked with some who were pretty decent people, but the median trader on the floor then was an arrogant, braying jackass.
- 5y ago
- janejeon 5y agoJust my perspective as working for a trading firm (and perhaps the difference comes from working at a relatively big, established shop), but the sentiment around here is that you do not fuck with the markets, you do not fuck with the feds/sec/finra, you do not fuck with your exchanges and you always always consult the armies of lawyers if you think there's even a slightest doubt of the legal & compliance aspects about what you're about to do. Don't really see that wild west of a*hole trader attitudes anymore tbh
- wpietri 5y agoThat's good to hear! I could imagine that a good chunk of the industry gradually got more professional as the trading pits went away. It certainly would have made being a big, loud guy less useful.