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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (44395)	9/17/2011 6:44:46 AM
From: Madharry	Read Replies (1) of 78628

they mentoned on fast money the other day -" what do you call a rogue trader who makes $2 billion for the bank?" "a managing director". Kind of like that the Packer kickoff returner who returned one from 8 yards behind the goal line for a touchdown. The coach said he was cussing him till he hit the 20. When I worked in credit review for a major money center bank, there were favored units that received kid glove treatment by senior management. Even valid criticisms were discouraged. I am sure that environment exists elsewhere. The only time I was aware of management clamping down was when some trading unit in Norway made a ton of money buy buying norweigan bonds. they made so much money that the bank sent in an auditing unit to norway to see exactly what they were doing. Dont forget when rogue traders make money all their supervisors benefit through larger bonuses. And everyone is aware of how much money there are making. no one wants some two bit auditor pointing out that such trader is exceeding limits or whatever until the sh** hits the fan then of course its too late. I never understood why auditing functions at banks dont report to someone who is appointed separately by the board from the staff running profit centers. I guess these trading departments are all black swan events waiting to happen. yet another reason to stay away from major banks as investments. Previous to that I worked for a small bank with around 20 branches in new york city. The largest branch manager was an up and coming young guy, favored by the chief lending officer, who once bragged to me that he could always find away around the banks rules and regulations in order to get things done. He subsequently was indicted for multiple counts of money laundering.

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