Crying Out Loud For A Few Good Men

It is starting to feel like the last breath from a dying fish.

source : wikipedia

I find it hard to be remotely optimistic when each Friday I see someone leave the bank, graciously escorted to the door and never to return to that counter top we call our desk with the three 21 inch monitors that we live, eat and breathe our days through, chatting with our universe of friends and clients. That is life and, when you are rudely retired from the front lines, life, as we know it, ends.

The routine is the same, in every dealing room in the world for the traders. Markets start, for me here, on Monday morning at 5 am and the action stops each Saturday morning at 4 am. The casino is 24 hours during that time. For days, months, years and now well over a decade. I know nothing else. Screaming, laughing, shouting but never crying. You hold your own on the poker table, in the game of chance with highest of stakes and strictest code of honour.

There is no pride left.

The entire game, as I knew it, was a facade. Fraught with cheats, swindlers and liars.

Reuters Many Wall Street executives say wrongdoing is necessary: survey

Traders often label the salespeople as the swindlers. Those who would lie their way through a deal. Liars Poker was distributed in every trainee’s fun pack when I started, along with Den of Thieves. Now traders are branded villains and salespeople seen as benign.

You felt, then, that if you did everything that was not in the book, you would doing the right thing for the world, the markets, and yourself. And for years, you plod on, doing what is right as scoundrels fall around you.

My first encounter with fraud was early in my career when the bank uncovered 2 cases within months of each other. A salesperson was secretly arbitraging the bank’s mid rate (set for small franchise deals) to profit a family business whose relationship she did not declare while handling the account. Another was a trader who had secretly dumped losses into various management accounts, for obscure sums that wasn’t noticed for months.

Along the way we had the regular affairs, usually between male dealers and their brokers although it was not unusual to find a female doing the same. And we had front running scandals which cumulated in an industry wide witch hunt back in 2009/2010.

I just do my own little thing, trudging along, always in awe of the success stories I hear of others striking big and bigger times and sympathetic to those who fall along the way. It is the same numbness I feel now, when a few good men got let go in the past fortnight.

Then this Libor rigging scandal comes to light and I am stunned. They managed to prove it. These are names you would bow down to. People whose reputations so far preceded them that no one in the industry would question their authority and might. Insider trading then appears like small potatoes.

I used to think it was alright for them to fix the rates wherever they wanted it to. Because their positions were so massive, woe betide to anyone who stood in their paths. That was also why I never traded SGD OIS (overnight index swap), a much much smaller market. I could never understand it for the frailty of its fixing (the Overnight SOR) and my inability to exercise my power of judgment to hedge my position in case the fixing was rigged.

Yet, it was acceptable to the market and I respected their opinion.

Now, we have legends being named and blamed. Will they be shamed ? I will like to see. And my heart goes out to those who had in their sphere of influence, who had only done what they were told, by  the giants in the dealing room,  but are brought down all the same.

Now, will they bring the investigation to other products like commodities as well ?

While all of banking is overshadowed by this spectre of doom, they would never notice the departure of a few good men.