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There are plenty of bad things you can say about Wall Street (I know, I’ve said them), but sometimes, the anti-stockbroker armies go to far.
For example, this story ran in the German magazine Der Spiegel recently in an analysis of rogue traders who lose billions at banks:
According to a new study at the University of St. Gallen seen by SPIEGEL, one contributing factor may be that stockbrokers’ behavior is more reckless and manipulative than that of psychopaths. Researchers at the Swiss research university measured the readiness to cooperate and the egotism of 28 professional traders who took part in computer simulations and intelligence tests. The results, compared with the behavior of psychopaths, exceeded the expectations of the study’s co-authors, forensic expert Pascal Scherrer, and Thomas Noll, a lead administrator at the Pöschwies prison north of Zürich.
“Naturally one can’t characterize the traders as deranged,” Noll told SPIEGEL. “But for example, they behaved more egotistically and were more willing to take risks than a group of psychopaths who took the same test.”
Now, the study sounds interesting, and it would be nice to actually see the document and find out if the findings are being taken out of context since the guys being quoted don’t appear to be with the university, but with a prison in Zurich. But Der Spiegel doesn’t bother to link to the study, so we’re expected to take their word for it.
I can’t do that. Sociopathic behavior, maybe. Psychopath? I need more proof. Maybe this study does exist, and maybe it clearly documents the testing and the results. But if there’s no link to see this for ourselves, why should we believe it? Even if we really want to?
But it doesn’t end there. The BBC this week ran an interview with a “day trader” named Alessio Rastani, who had some candid comments on why stock brokers are looking forward to the collapse of global stock markets:
Now this, too, borders on the edge of psychopath, but stands firmly in the sociopath world. This guy seems to have his act together. Or does he? He’s not shown to be affiliated with any major brokerage house. In stockbroker land, these are the kinds of statements that are more likely to be said in the comfort of a trading floor with like minded sociopaths, but never on live television with millions of listeners. At the least, if this guy’s with a real financial institution, saying this would be a firing offense. So anyone watching this should, after the initial revulsion and self-satisfied feeling of being right about Wall Street all along should think, “Wait a minute. Is this guy real?”
The Daily Telegraph in London followed up and is reporting this:
In the interview Mr Rastani described himself as an independent trader. Elsewhere he claims he’s an “investment speaker”. Instead of operating from a plush office in Canary Wharf Mr Rastani works and lives with his partner Anita Eader in a £200,000 semi in Bexleyheath, south London. The house, complete with a mortgage from Royal Bank of Scotland, belongs to her not him.
He is a business owner, a 99pc shareholder in public speaking venture Santoro Projects. Its most recent accounts show cash in the bank of £985. After four years trading net assets are £10,048 – in the red.
Canary Wharf and “The City” are London’s two financial districts of London. Rastani doesn’t appear to work in either of them. Two hundred thousand pounds, which in the real world is seen as a lot of money, doesn’t get you anything more than a modest flat in London. And “broker” living in South London, is probably like a Charles Schwab specialist living in Hoboken, N.J. Not saying that’s poverty stricken, but it definitely isn’t where the movers and shakers live. So the guy really has no basis for speaking as a “Wall Street” or “City” or “Canary Wharf” insider. He doesn’t make money trading. He doesn’t move markets. As the Telegraph story says:
How a man who has never been authorised by the Financial Services Authority and has no discernible history working for a City institution ended up being interviewed by the BBC remains a mystery.
So far, we’re just getting examples of shoddy reporting based on lame background checks.
We already have enough reasons to condemn Wall Street practices and to demand action against banking institutions for getting us in the financial mess we’re already in. But even if we want to believe in the stories about psychopaths and guys who get off on market collapses because it means more money for them (and just to emphasize, people do get extremely rich when financial products collapse. Read Michael Lewis’s “The Big Short” on the meltdown in the subprime mortgage market), we need bulletproof documentation on these “accepted truths.”
Otherwise, it’s just another group of people making up crap. And we already have enough of that.