Rogue Trader

[MysticalTrader]

Did anyone see that film last night. About Nick Leeson. First time I have seen it with any knowledge about trading at all. Wow. if that is anything like what *really* happened, it is deeply scary...

MT

 

[FetteredChinos]

yup, reminds me of my time this year when i tried to average into my position after the madrid bombings..cost me about 30-40% of my account.

sometimes the hard way is the best way to learn. wont be making that mistake again....

still not sure about anna friel though. not really my cup of tea.....

 

[donaldduke]

I have the DVD and watched all of it many times before i ever lost money trading, the last time
(about a year ago) i watched it i actually had difficultly watching the last bit of the film, eg he
starts shaking when talking to his friend, i turned it off, it just reminded me too much of my own
painfull experiences about 2 years ago when i lost a lot of money trading.

The sad thing is that people lose big bucks in the markets everyday, it wont be millions like
in the film, but if you go into debt (as i almost did) you could easily end up losing the house,
wife and kids. Just like Nick did.

 

[TWI]

You are being a bit optimistic I feel

 

[ewilcox]

Did anyone see that film last night. About Nick Leeson. First time I have seen it with any knowledge about trading at all. Wow. if that is anything like what *really* happened, it is deeply scary...

MT

that was what really happened! similar things happened with Enron and I can guarantee that another such event will happen in the future. why? greed and fear...
:cheesy:

 

[MysticalTrader]

makes my 150 quid dropped today seem quite modest... sobering. Mind you, he had 2 things working against him: I think he did behave stupidly, and he got rather a lot of bad luck.

MT

that was what really happened! similar things happened with Enron and I can guarantee that another such event will happen in the future. why? greed and fear...
:cheesy:

 

[GirlPower]

I think he did behave stupidly, and he got rather a lot of bad luck.

His bad luck stemmed from choosing to work for a company that shouldn't have been in the market they were in.

 

[ewilcox]

err....not sure I agree with that.

barings problems were not the markets per say but a complete lack of internal controls allowing leeson and others to get away with murder. compliance and due diligence in banks is getting better but i've still seen and heard about some outrageous practices in some household names still occuring today.

 

[theknifemac]

Yeah I've met a few middle / back office people who thought they could trade, but never seen a firm which let them ! I only saw a brief clip of the film last night, but the part I saw - where the board were meeting just after Nick and his pals had mooned some girls in the bar and got their collars felt for it - was most amusing.

The BofE were getting concerned that Barings were breaking their limits with all the money being sent to finance the margins calls, but the board were happy as Nick was seemingly making lots of money. So the warning signs were there for all to see but they were ignored.

On a related note I was most amused to read what happened when another trader who had some dodgy tickets joined the NY office of my last employer - traders their nailed his desk drawers shut so he wouldn't be hiding any tickets there !

From reading the book, I ended up feeling sorry for Mr Leeson more than anything else. By successfully covering up a colleague's mistake once he thought he could do it always even when the stakes were a lot higher.

Stew

 

[ewilcox]

stew
where did you read that? ;-) rotflol

ew.

 

[GirlPower]

err....not sure I agree with that.

barings problems were not the markets per say but a complete lack of internal controls allowing leeson and others to get away with murder. compliance and due diligence in banks is getting better but i've still seen and heard about some outrageous practices in some household names still occuring today.

It's not as much to do with compliance as it is unsuitability.

Barings were not involved in market-making on the cash side of things, only in the derivatives which Nick was trading.

Although I'm sure as a capable trader Nick did his best to remain 'market aware', without the corporate support and infrastructure that such market awareness requires, the poor little blighter was doomed.

Not that I support the overly litigious society we endure these days, but if this did happen again today, I feel there might be a case for him to sue his employer.

 

[ewilcox]

could you define what you mean by "market aware"? i can't help but feeling we may be argueing the same point.

 

[theknifemac]

stew
where did you read that? ;-) rotflol

ew.

I wish I could remember, I think the trader in question was involved in another Leeson type affair and moved over before it was discovered. Having met some of the traders over there, I can believe the story.

I've seen the view that because Barings were not involved in the cash market in Asia they didn't have infrastructure etc in place. To let a trader run the back office too and be able to book offsetting client trades which did not exist (and then continue to stump up margin payments for the positions) shows an incredible lack of control irrespective of a presence in the cash market. I'm not even convinced that Nick was that good a trader.

Stew

 

[oatman]

I didn't realise Leeson was a trader
Very good at covering his a*se in the back office

 

[mikeyk]

I've been wanting to see it for a long time but never got round to blockbusters to rent it. Spot on film though. i'd been debating earlier on in the day whether i should by the book and then hey presto just as i was getting bored of "average jo" hang on a minute was that a traders jacket..... wahey rogue trader.

I know a lot of people wont feel the same way but i feel sorry for him and have certain degree of admiration how one individual can lose 700 million pounds and bring down a bank. Now thats got to carry some ironic respect.

 

[FTSE Beater]

barings problems were not the markets per say but a complete lack of internal controls

I agree fully with that.

As we know fear and greed drive the markets. No different here. The Barings board would have looked into Leeson a lot earlier if they weren't so blinded by the money he was making and ultimately their greed.

As for Nick himself. I personally think he just got caught up in it all, and I can't say truthfully that I wouldn't have done the same thing. Just like all other animals, as humans, if we get backed into a corner, we come out fighting

 

[oatman]

Leeson wasn't a trader. He was gambling that a sh!t position would come right.
Any trader will tell you that sh!t positions don't come right and that he didn't have the b4lls to take his medicine and come clean with his bosses.

 

[aarie5]

I didn't realise Leeson was a trader
Very good at covering his a*se in the back office

I missed that bit was he Baring it?

 

[ewilcox]

so i take it you are not a fan of doubling down then oatman? ;-)

i take your point though - even given my previous comments leeson was just betting by the end and thats never a good thing if you call yourself a trader.

 

[FTSE Beater]

Leeson's job was to place trades. As soon as he started the 88888 account, he became a trader. When things went wrong in the trade, he was then a gambler.

From broker to trader, was the woman's fault - Admittedly he didn't have to go with it, but he was trying to do here a favour.
From trader to gambler: Well that was just his lack of trading experience. Let's be honest, we've all done it