Sorry, but this trader's banking confession was no prank

[malaise]

http://www.guardian.co.uk/commentisfree/2011/sep/29/alessio-rastani-no-prank
<snip>
This week, an insignificant market trader and self-proclaimed financial self-help guru, Alessio Rastani, rocketed to stardom after speaking frankly on the BBC about the collapsing market and his plans to make money from it. We Yes Men heard about it right away, because soon after the broadcast, people started emailing from all over the world to congratulate us on another prank well done. They couldn't imagine that a real trader could possibly speak so candidly about the market, so they assumed Rastani was one of our posturings.

He wasn't. Rastani is small potatoes, but he's a real trader. And he said nothing that would suggest otherwise; he simply described what he does, more honestly than a true insider would, but quite accurately. "Every night I dream of another recession," Rastani said, and explained that it's possible to make huge money from a big crisis even when millions of others lose their life savings, and worse.

Well, duh. Don't we all know that Goldman Sachs bet against the same housing market they were such a big player in, and made $1bn in profit when the sub-prime crisis rendered millions of Americans homeless? John Paulson, the manager whose hedge fund was betting for Goldman, could have honestly said exactly what Rastani said, but of course he knew better – possibly because unlike Rastani, Paulson's firm had a major, immediate and provable impact, and there's no telling how his millions of victims might have reacted. Unlike Rastani, true industry insiders like Paulson, Geithner et al remain silent about the way their system works, couching it all in technical jargon and full-on deceit. They've been doing it for decades, and, since Ronald Reagan's day, with increasing consistency.

[jwirr]

1. His statement rang very true to those of us who have been watching

this all happen. He merely states that the crisis is so bad that no one knows what to do and the corporatism is in control not governments. Simple.

[joeybee12]

2. KNR

[rdking647]

3. all a trader cares about is the here and now

how much money can I make today,consequences or future be damned.. a lot of this is based on how the average prop trader is paid by a large firm.. they usually get most of their paycheck in 1 or 2 large checks based on how they did that year...
lets say for example they have a deal with the firm that pays them 50% of the money they make..
if they make 10m trading in a year they get 5m. so lets say they take positions that are going to make money most of the time but in an extreme circumstance they blow up..most years they will make good money.. but in the 1 year the shit hits the fan they lose huge..
its possible they make 10m a year for the firm for 6 years in a row.. the firm gets complacent seeing steady profits.. the trader gets his 5m every year.. then year 7 comes along.. what i call something stupid happens.. the trader loses 100m.. but he doesnt have to cover any of that.. all the firm can do if fire him.. so hes 30m ahead of the game.. and ther eis a good chance the firm wont fire him since they need him to return to making money so they can recoup their loses... and it continues.
we use to say if your going to blow out,blow out big because then you have a job security.

it happens all the time..

I was a trader on the floor for 20+ years.. i know how things actually work down there.