UBS rogue trader loses $2 billion

Quote from jem:

I note that almost all of the big banks on wall street when rogue trader on the mortgage market.

Pabst a former poster here... pointed out in a different context ever since these banks went public they had no reason to manage their risk.

They just play for their bonuses until they blow up.
When they were partnership... the firm capital had to be preserved so they could get their payouts from the partnership past the term of the lockups.
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I agree and it's been a very interesting timeline of events over roughly the past 13 years (I see the LTCM as sort of a starting point) for not just the "first shot" in the TBTF/Moral Hazard play, followed by some major mergers (think Sandy Weil) and the repeal of Glass-Steagall. I believe Goldman went public right around that time as well. Ever since then, derivatives and the "shadow banking system" have grown exponentially and compensation followed suit.

The "rogue trader" b.s. seems to fit into this story as well. A sort of lack of internal accountability and "growth at all costs" regardless of the systemic risks fits right into the public vs private partnerships you allude to.
 
I have about 50 clients who are overseas, and it always struck me as fascinating that they all had US-based futures accounts. I am sure alot of that is because US commissions and fee structures are less expensive. US segregated account structures are also surely attractive in terms of security.

But the other astonishing piece ( at least to me ) is that they all park the lion's share of their money, outside of their trading accounts, even post- 09/11 banking laws... in the US.

When we talk about trading ECNs and clearing arrangements; they seem to dismiss European money handlers out-of-hand as a necessary evil only.
 
He was in the IT department, then moved on to trading... He could use the institutions rules against them, maybe he enjoyed doing what he did for that reason?

Managers jobs involve following up on all work that is delegated. Their job is to know their people as well. If they read up just to a tutorial level of understanding on Myers Briggs personality types they would be on the lookout for exactly the behavior exhibited by said Rogue Trader and they would know which of their employees was like that... I'm quite sure that he is ENTP and maybe a little disgruntled...
 
Quote from benwm:

... ruin the reputation of UBS?

Amazing how nobody bats an eyelid these days when a rogue trader loses a couple of billion! These days rogue traders need to lose HUNDREDS of billions to get the markets excited. :D
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You may very well be right,no where in the Wall Street Journal , does it mention [9-17-11]anybody batting an eyelid.But UK prosecuter David Levy did charge him with fraud, in London...''The alleged scheme dated to 2008...''

Just the sort of news the big bank sector needs;
again.:D
 
He should go to jail for at least 5 years............
losing $2 billion others people money, what the fuck........
This is not a trader, he is just an idiot....who have probably stuied on harvard to get the job at UBS............
the banks will kill the economy one day with this stupid harvard people..........

idiots, just idiots.........:eek: :eek: :eek:
 
I have a problem with this whole thing:

1. Some traders end up making $2B by taking such crazy positions but we never hear about them.

2. If the traders lose that kind of money, then they are labeled as rogue traders.

3. I put 100% of the blame on the risk management of the company and of course the mega compensated executives.

4. 1 or more traders took the other side of this position and what about them, are they not rogue simply because they made money. They will be heroes now.
 
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