We had a saying in the military, "choose your rate (specialty), choose your fate." It was generally directed at the guys in the "tough" rates who were constantly complaining about how much harder they worked and in so much worse conditions while the "easy" rates just loafed along and were staffed by weak idiots. The phrase nicely summed up the more complex idea of "if you're working a tough, hot, dirty thankless job and getting paid the same as the guy with the easy job then at the end of the day you're the idiot, not them." The same for our friend here complaining about how the guys at the banks are idiots because they can't predict bear markets, when in fact they're getting rich without having to predict bear markets and as you pointed out, can do well regardless, while he's left complaining. Sounds like they're the one's doing something right and he's not to me!
Again, I can't disagree more with you. Just because someone makes bucks does not mean they do it right or ethically or morally. The issue of bank traders is an egregious problem of agency risk. You honestly find nothing wrong with a few dudes taking on outrageous risk, knowing that when they are wrong they cost shareholders and others a lot of money and potentially jobs and yet they have no qualm doing it anyway. As long as they get away with whatever lines their pockets the most they do, ethical or not. It's not they fear God but they fear the fury of regulators and punishment. So, their intentions are often times as immoral as it gets, they just keep in line because regulators have in many cases smartened up. I claim that except in very few instances over time prop trading in sell side banks has cost more than the money it brings in. And probably it makes most sense, from a risk perspective, to keep those departments shut for the time being.
I think you're reading far far more into what I wrote than what I wrote! There's nothing inherently unethical about banks making money through MM, building structured products, facilitating OTC trading, underwriting equity and debt offerings, facilitating buyouts.... Certainly there are folks who act unethically in each of those areas, heck I ran into people acting unethically serving their country so there's going to be some of that everywhere, but none of it is inherently unethical. That's what bankers do, that's how they make money at least post Volcker Rule. The OP I was responding to was criticizing bankers as a whole, apparently because of their apparent lack of ability to forecast a bear market, and stating that this makes them idiots. I'm pointing out that they chose to be in a business (market making, structured products, advising...) that's making them all plenty of money while he chose one (individual trader) that I can pretty confidently say is not making him a lot of money. That is all. Nothing to do with moral hazard of prop trading inside a bank at all, we're in violent agreement about that. I'd go further to point out the hurdle rates and incentive structures that existed couldn't have been better designed to amplify the moral hazard and make doubling down the only rational thing to do when you were underwater with only a short time to go before the end of the year/period, so it wasn't just the individuals but the system as a whole that was rotten. Hence I'm generally a fan of the Volcker Rule. If I ran a bank I'd also shut down the prop trading absent the rule because the variance of the returns is so great that even if the mean was profitable over time the variance costs the bank more than the operation brings in due the the resultant increase in WACC for the entire bank.
%% And i dont really blame big banks for not hiring many women; trading is so rough on one's emotions =cant blame them. I like the way most women are tactful, not direct; even most woman not tactful, tend to be smart enough not to stomp on my ego LOL. One wife on Wall Street asked her trader husband, of all things to ''get a soft pretzel'' as if he was some kind of FDX delivery service LOL-_LOL BUT since he admitted she was better trader than he was-he did it.Frankly if he told it right- Jim Cramers ex wife should have learned some more manners. But she was a good trader, she bought $ 500 ,000,000 worth of stock , while Cramer was getting her food, before Fed surprise rate cut.I read Cramer's AUG 7 email after close.,
Darn it, "moral hazard" was the term I was looking for. Can agree with your points made re prop trading at banks.
I'm rich- no mortgage, I can buy anything I want and I don't work for a banker who faces serious jail time-think about that -they are BS merchants whose only talent is scamming money out of dumb people -but the outflows are getting bigger as Goldmine sucks and Dodgy bank are found out.
I was ashamed of making serious coin out of these donkeys in the last recession- they are disposable chancers,and it's only the influx of new money that keeps them afloat. None of them can trade their own accounts like I do.
What exactly do you know about putting together structured products, advising on acquisitions, underwriting IPOs...? What exactly about those activities, which post Volcker Rule is where an entity like GS is making all their money, is illegal or "scamming money out of dumb people". One would think of you're going to accuse a group of highly intelligent folks of being stupid you may want to have at least a tenuous grasp of what they do, but.... projection is a thing I guess.
There is nothing they do that requires a phD - in fact brains in finance can be postively dangerous - LTCM for example. Banks make money from deposits and trade on margin. They were caught with their pants down in 2008. I made money, they lost an unacceptable amount, and they are still in debt to folk like me. I trade options and have met many in the world of finance who cannot even understand the basics. I don't accuse them of stupidity but arrogance.
And you clearly don't grasp the difference between a deposit bank, an investment bank, and a hedge fund, since you just conflated all 3 in the space of 3 sentences! I do accuse you of stupidity for pontificating on something you clearly know fuck-all about!