Going Rogue

Matt Taibbi on "rogue traders" (via nc links):

They’re not "rogue" for the simple reason that making insanely irresponsible decisions with other peoples’ money is exactly the job description of a lot of people on Wall Street. Hell, they don’t call these guys "rogue traders" when they make a billion dollars gambling.
The only thing that differentiates a "rogue" trader like Barings villain Nick Leeson from a Lloyd Blankfein, Dick Fuld, John Thain, or someone like AIG’s Joe Cassano, is that those other guys are more senior and their lunatic, catastrophic decisions were authorized (and yes, I know that Cassano wasn’t an investment banker, technically – but he was in financial services).
In the financial press you're called a "rogue trader" if you're some overperspired 28 year-old newbie who bypasses internal audits and quality control to make a disastrous trade that could sink the company. But if you're a well-groomed 60 year-old CEO who uses his authority to ignore quality control and internal audits in order to make disastrous trades that could sink the company, you get a bailout, a bonus, and heroic treatment in an Andrew Ross Sorkin book.

The man makes a good point.  Rogue traders are the losers on trades.  If they win, it doesn't matter how or why they won.  Then it's just a matter of them and their bosses divvying up the bonuses.  Rogue traders, while technically true (they probably covered up smaller losses before going for an even riskier, larger score to make up the difference), are just working within the culture they were raised.  All of the high-roller gamblers in Vegas lose a decent percentage of the time, but by luck and exquisite timing, they don't wash out for a while.  Surprisingly on Wall Street, the banks rarely lose, because they generally play a rigged game.  Unfortunately, they continue to try new games, and sometimes either they aren't rigged enough, or somebody else is doing the rigging.  When that happens, some low man on the totem pole is probably going to get canned.  If he is able to hide his losses and tries to double down, he's likely going to end up being labelled a rogue trader. 

The banks, however, managed to lose a crooked game so badly in mortgage securitization that they wrecked the whole economy, got bailed out, and haven't been charged with any crimes.  Was fraud committed? Absolutely.  Some of the martgage securities were tied up in trusts which never actually had legal possession of the mortgages they claimed to own.  Now they can't foreclose on the houses which are in default.  I am not surprised that small fry employees in these companies ignore rules and regulations, they learned from the best.