Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Data Management

12:36 PM
Phil Albinus
Phil Albinus
Connect Directly

The No-Shame Game on Wall Street

Despite this historic mess, bad brazen behavior is not showing any signs of leaving the scene.

"How did you go bankrupt?"

"Two ways. Gradually, then suddenly."

This famous exchange appears in Ernest Hemingway's debut novel The Sun Also Rises, which follows some swanky members of the Lost Generation as they drank their way through Paris in the Roaring Twenties. Published in the 1926, it showed a time when going bankrupt both morally and financially was almost unheard of and slightly scandalous.

Today, economic recklessness no longer brings a sense of shame. Look at the headlines and try to find any hint that the people on the receiving end of fines, harsh probes and endless criticisms feel anything resembling remorse. This week Moody's slashed the credit ratings of many powerhouse banks across the globe even though the rating agency looked the other way while the same banks were dealing mortgages to customers who could barely qualify to lease a Lexus. Europeans are facing a currency and default crisis that demands serious action but instead everyone is waiting for Germany to cut a check. President Obama's political future is tied to a grinding recession that might falter further depending on news from across the Atlantic. If that weren't enough, he is saddled with a Congress that wants to slash spending while maintaining the lowest tax rates on the wealthy in the post-war years.

Despite these historic events, the banks still don't seem to have learned anything in the past four years. For an industry that clamors for every splinter of historical data -- the price of cotton after a war, the price of oil in the summer months during a presidential re-election year -- they have zero sense of history.

JPMorgan-Chase made a huge hedge with an enormous price tag: $2 billion and counting. Some estimates say this bad bet could unspool at the cost of $5 billion and one market analyst predicted it could reach $10 billion. And yet Jamie Dimon strolls into Congress wearing his cufflinks with the Seal of the President of United States and tells the lawmakers that not only does he have everything under control but that the financial industry needs fewer regulations.

Another fan of leaner oversight, Jon Corzine, is the photo-opposite of Jamie Dimon. A very smart man who once ran Goldman Sachs and served as a US senator and a governor of New Jersey, Corzine allegedly used client funds to cover a spectacularly bad bet of his own when he ran MF Global. As Dimon lulls lawmakers into thinking that he has everything under control, the usually commanding Corzine seems to be spinning like a top. The only question for Corzine is does he cop a plea or face a jury?

This week on Advanced Trading, we learned that the buy side may love sexy trading algorithms, they also want a human touch from their broker-dealer counterparties. Speaking of Europe, at a swanky gathering of hedge fund managers in Monaco -- where was the modern day Hemingway to report on that?! -- one hedge fund manager says that the real crisis in Europe has yet to begin. Uh oh, looks like someone is shorting the Euro.

When it comes to regulations, investment firms are still scratching their heads about how to make the Volcker Rule stick and what role data management plays in keeping everyone in line. It's not sexy but perhaps the truth and maybe even the solution to unlocking this long-hidden recovery are in the numbers. And a smart young graduate of Dartmouth doesn't see the allure of Wall Street despite being at ease with spreadsheets and algorithms.

Maybe the Millennial Generation isn't as lost as their predecessors.

Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio
More Commentary
A Wild Ride Comes to an End
Covering the financial services technology space for the past 15 years has been a thrilling ride with many ups as downs.
The End of an Era: Farewell to an Icon
After more than two decades of writing for Wall Street & Technology, I am leaving the media brand. It's time to reflect on our mutual history and the road ahead.
Beyond Bitcoin: Why Counterparty Has Won Support From Overstock's Chairman
The combined excitement over the currency and the Blockchain has kept the market capitalization above $4 billion for more than a year. This has attracted both imitators and innovators.
Asset Managers Set Sights on Defragmenting Back-Office Data
Defragmenting back-office data and technology will be a top focus for asset managers in 2015.
4 Mobile Security Predictions for 2015
As we look ahead, mobility is the perfect breeding ground for attacks in 2015.
Register for Wall Street & Technology Newsletters
5 Things to Look For Before Accepting Terms & Conditions
5 Things to Look For Before Accepting Terms & Conditions
Is your corporate data at risk? Before uploading sensitive information to cloud services be sure to review these terms.