THE CRANKY OLD MAN
Random thoughts and stuff from a cranky old man. Humor (maybe)and satire, mostly stuff from a confused head.
I intend for this blog to be non-political. If I offer a political statement, rebuttals are permitted, however this blog is not for the unsolicited political opinions of others and as such those comments will be deleted and not published.
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Saturday, September 21, 2013
J.P. MORGAN – Why the Death Penalty Doesn’t Work
J.P. MORGAN – Why the
Death Penalty Doesn’t Work
A Cranky Opinion for
CRANKY OPINION SATURDAY
The following is the opinion of a
cranky old man.Opposing opinions are
welcome, wrong, but welcome, and please, no name calling…that means you, you
big stupid head.
This cranky opinion may be a bit
boring, deal with it, you should see some of the crap I read!
J.P. Morgan was
just fined 920 million dollars for inadequate controls in their trading
operations.These inadequate controls
led to a 6 Billion dollar loss from bad trades.
What are bad
this have to do with the death penalty?
are transactions that lose money for a brokerage firm or bank.Good trades result in profits for the firm
and a bonus for the trader.Bad trades
result in the firm losing money and the trader losing his job and his
trader for a bad trade is a career death penalty.
time again, every year, at every firm, there is a trader who makes a bad trade
which jeopardizes his job.Does he own
up to the mistake and cut his and the firm’s losses?Sometimes, but he pays a steep penalty.Often, with nothing to lose personally, he
doubles up on the trade (double or nothing) hoping the market turns around and
he can hide his bad trade, keep his job and still earn a ridiculously huge
doubling up doesn’t work, he will cover up, hide, and lie.If his supervisor does not catch the losing
position, he also faces the career death penalty and he will then aid in the
cover up.Delay owning up to the mistake
long enough and maybe the market will turn around and they will save their
is exactly what happens and both the trader and his supervisor breathe a sigh
of relief while they also feed their ego that they are geniuses and
market does not turn around and the loss gets bigger and bigger.Sometimes the loss gets so big it will put a
firm out of business.That is what
almost pulled J.P. Morgan under.
this say about the death penalty?When
someone has everything to lose, he will continue his ways with the hope of
saving his skin.Anything goes when the
result of owning up to a mistake and giving yourself up is DEATH.
Wall Street, does the death penalty stop murderers?Does anyone think, “Gee I better not bring a
gun, if I kill someone will I get the death penalty?” Maybe…on a rare occasion,
but what if one commits the capital crime?Will he give himself up or will he fight to the death to get away,
killing others in the process?
needs to end the trader “Death Penalty.”Bonuses should not encourage risky trading; instant termination should
not encourage cover-ups.If a trader makes a fortune on a trade,
analyze it.If he took a huge risk and
got lucky, maybe he should not be rewarded.If a trade goes wrong, maybe he should not take the maximum
penalty.Perhaps a fine or extra
supervision would correct the behavior while eliminating massive losses taken
in desperation to avoid the “Death Penalty.”
I know, a
boring topic, but one which was once a part of my life.
The preceding was the opinion of a
cranky old man and not necessarily that of management…Mrs. Cranky.