We Want To Fire You

In 2010 I was given a new boss.

He was Brazilian who did not speak a lick of Spanish, he only spoke Portuguese. Given that my entire account base were Spanish speakers, I thought it was unusual to put this man in this role as he would have no way of talking to any of my accounts without a translator. But such is the nature of Wall Street. He was out of accounts having blown up his account base so they no longer wanted to speak to him. After the crisis in 2008, he spent 2009 in the courtroom with accounts suing him, and our firm, for the damage he had done. He had made the firm a lot of money by selling toxic derivatives but in 2009, the firm was paying for his malfeasance.

But 2010 was a new year and new victims were needed. In fact, I had two new bosses not one. The second boss was living in N.Y having fled Mexico. There were rumors that he hadn’t made certain payoffs in trades and some high level people in Mexico wanted him dead. In my first interview with my Mexican boss, his first words were, “We wanted to fire you but there are too many people at the firm that like you so it was not possible.” Talk about a vote of confidence! You see in 2010, it was getting harder and harder to find revenue and since I was making money, but not sufficiently covered politically, I was an easy target.

Wall Street is about making money. “Make money but not too much” was advice given to me by a colleague of mine when I first started working on Wall Street. You see, if you make too much money on Wall Street, the sharks will come in and take it from you. If you are neither a shark nor protected by one, they will steal your business. If you make too little, they will fire you. But if you can make just enough money and not attract the sharks that’s how you make a long-term career on Wall Street.  However, if you figure out a way to make money that nobody has before you, the predators will come in and claim it for their own. In the first part of 2010, my account base was producing lots of money and people had taken notice.

From 2006 to 2010 I had scraped and pieced together an account base from all over Latin America. I had found accounts and networked to a point that I literally had new accounts calling me every day looking for my bank’s service. It wasn’t easy. From 2006-2008 I had acquired 30+ accounts only to lose them all during the crisis. So I started all over in 2009. But by 2010 I was one of the most profitable sales people on my desk. I had sweated, lost many nights sleep putting my business together. But, by 2010 I was making some serious money for the firm and people were desperate for revenues.

In the end, I left the firm just as the writing was appearing on the wall, so to speak. The thieves had their knifes out and I had to protect myself as best as I could. I left the firm with my stock and I moved to another firm. Two years later, the two bosses that had ousted me were no longer at the firm. Their lack of character was apparent and the firm had no choice but to let them go.

By 2010, the “follow the money” mantra no longer worked. Pension funds and mutual funds had  been burned badly by the Wall Street banks and no longer would tolerate such behavior.  In the end what accounts want in the finance industry is service and transparency. Until Wall Street gives them that the banks will continue to struggle as will the overall financial flow.

Steve

Barack Obama’s Discernable Pattern

The stress an individual is subjected to is directly proportional to the power and responsibility of the position they hold. Leadership, whether in the public or private sectors, is the prime example. No one would dispute that the leader of the nation perceived to be at the apex of standards for the Western world, and beyond, would carry the burden of an almost insurmountable about of stress. So, the need to have outlets to alleviate that stress is logical and understandable in order to do the job rationally and judiciously.

FrolicknigNone of which remotely explain, or justify, President Obama’s pattern of excessive, public frolicking while the economy remains stagnant, the border is breached, genocide rages abroad, an ally fights for its existence, and Russia and China make pacts with one another toward an end game of replacing the U.S. dollar as the global monetary standard.

Barack Obama is either 1) one chip short of the ability to feel compassion and empathy; 2) so egoistical and hedonistic that self-satisfaction is the only lens through which he is capable of perceiving reality, or 3) doesn’t give a damn because chaos was, and remains, his primary goal.

Personally, I don’t give a damn which of the three is his motivating principle. They are equally reprehensible. The hubris and indifference with which he “fiddles while Rome burns” gains him membership in the unenviable club of men and women throughout history who disregarded the interest of the people they served in their personal quests to self-gratification. Hindsight being 20/20, history memorializes those individuals as pariahs upon humanity and treats the accordingly.

Such will be the case with our current President. He and his wife have betrayed the trust given them by the American people as well as their own deceptive promises to bring about a new and improved Nation.

What they have wrought with arrogance, and a continual disregard for the best interest of the Nation, is not hope and change but despair and decline. While history will judge them rightly and accordingly, we must continue to believe that as Americans, we can and will survive this most abhorrent deviation from who were designed and still aspire to be.

Carole

What Robin Williams Left Behind

I tried to commit suicide at age 24 and came frighteningly close to succeeding…if success is ever the right word to use in such situations. As such, I have a lot to say about Robin Williams, not because I knew him but because I know exactly how he was thinking and feeling when he made the decision to try.

feelingsI would first say to those who would second guess his motives, his financial situation or his degree of “selfishness” as I have heard it referred to: DON’T… unless, of course, you’ve been to the point of consciously, albeit irrationally, trying to die by your own hand.

It’s not about the money, it’s not about the fame, it’s not about the lack or excess of anything other than feeling. It’s about feeling too much in a world that does not have enough love or compassion. It’s about living a lie and becoming the comic, the drama queen, the rebel, the alcoholic, or the workaholic in order to harden you sufficiently to withstand all the insensitivity, separation and denial.

I’m not a big proponent of medicating depression. In fact, I was coming off of anti-depressants when I used those same pills to try to kill myself. And, while one of the first thoughts I recall having upon surviving the attempt was what hell I had put my family through, it never entered my mind at the moment I made the decision. You see, when the pain gets bad enough and the fog gets thick enough, the realization that you have finally figured out a way to stop the suffering seems like a relief and that single realization takes precedent over anything resembling rational thought.

When a person tries to commit suicide, they don’t really want to die. They’ve just misplaced hope. Hope that things can and will change. Hope that the pain will ease. Hope that the fog will lift. Hope that they will ever feel joy again. Hope that on balance, life is actually worth living through all its trials and tribulations. Hope that tomorrow, or even an hour from now, it will be possible to give and receive love again. Which is why everyone, not just people who are depressed, should sit up and pay attention to what Robin Williams was driven to do.

We are living in a world overwhelming us with so much negativity that we are losing hope. You see it in the growing apathy. Apathy unchecked leads to hopelessness. Where is the outrage and help for innocents beheaded or buried alive? Where is the outrage, and help, for the Iraqi’s stranded on a mountain top? Where is the outrage and help for children being used as sex slaves and pawns in a political game? Where is the outrage for female genital mutilation as a “religious” practice? Where is the outrage for corrupt, lying, greedy politicians who prosper at our expense and our decline? Where is the outrage at what’s happening on our border? Where is the outrage at what we do to animals every minute of every day in the name of science? Where is the outrage at the manipulation of our economy for the benefit of the few at the expense of the many?

I know. I know. You are tired. You are overwhelmed. You feel powerless. You are dancing as fast as you can dance. So was Robin Williams. That’s the cautionary tale he bequeaths us.

His most important message and he brought us many through his seemingly endless creativity, is that having to feel less, or dying, is not the answer. The message of immediate importance is for each one of us to finally embark upon creating a world where kindness, cooperation, compassion and love are the norm not the aberration.

A world where feeling too much will only get you more joy.

Carole

Argentina, Default and Poverty

Argentina just defaulted last week after having defaulted in 2001. The fact is Argentina has defaulted 8 times in its 200 year history but this time around I actually feel the Argentinians are getting the short end of the stick,let me explain.

argentina

Argentina’s $100 billion default in 2001— was at the time, the largest ever. That default threw millions of Argentinians into poverty and left over 25% of the people unemployed. The crime rate exploded and it left the poor to fend for themselves. During this time, the poor would go on to the streets looking for food, there were numerous reports of cattle cars being stopped on the street where the cattle would be slaughtered and butchered on the sides of the road just so that the people could eat.If you want to read a great account of that default please read “And The Money Kept Rolling In.

Having read the book I can tell you the book is heart wrenching in the damage that it caused the people. Imagine butchering a helpless animal on the side of the road just so that you can eat.  Some of the main takeaways from the default were the following:

  • The disconnect between the political class and the people. The politicians raided the coffers, promised the world to its citizens and when the money ran out, the citizens suffered. The leadership in the country knew the damage that they were causing but still spent the money because they wanted to stay in power. The citizens trusted their officials to balance the fiances but they were betrayed.
  • Wall Street acted as a conduit to sell as many bonds as possible because by doing so they reaped millions of fees in the underwriting. The Wall Street banks knew that Argentina was going to default and they knew there would be a lot of money to made in the restructuring of bonds.
  • Wall Street helped facilitate the purchase of more bonds by creating indices and forced fund managers to buy the bonds. As Argentina issued more bonds, the weighting in the indices became greater so that a fund manager trying to replicate the performance of the index of emerging market bonds was actually forced to buy more bonds. The more bonds that Argentina created, the greater the weighting would be in the index and the more the fund manager would have to buy that debt.

After the default in 2001, Argentina a few years later restructured its debt. “It offered the holders of its defaulted debt—which was still trading at deep discounts—new “exchange bonds” that paid about 35 cents on the dollar of the original ones. It was an offer they couldn’t refuse. If investors said no, they got nothing.  That’s why 93 percent of the old bondholders accepted the new ones. ” (Washington Post).

The 7% that held out got nothing. In addition the Argentinians told the 93% that accepted the new bonds, that if they were to renegotiate with the 7% that held out, any deal they got would be granted to them as well. The reason being is that all senior sovereign bonds are created equal and are treated as such.

In 2005 after all the old defaulted bonds had been exchanged, there was still these un-exchanged defaulted bonds circulating. out there. A few hedge funds started buying the old defaulted bonds to the point where they controlled most of these bonds. They did so knowing that if they controlled all of these “old bonds” they could try to force Argentina to pay them 100 cents on the dollar.

These hedge funds that bought these old defaulted bonds did not lose money in buying them. They bought them in the hopes that they would get paid in full. Many of these bonds were bought when they were trading at 30 cents on the dollar.

Over the last few weeks the courts have agreed with the hedge funds and their claim to be paid in full. The courts have ordered Argentina to pay the old defaulted unexchanged bonds in full. However as a consequence of this ruling, Argentina will be forced to pay all the old bonds holders from 2001 the same 100 cents on the dollar (the other 93%). And because Argentina does not have the ability to pay every bond holder from 10 years ago at 100 cents on the dollar, they have defaulted once again.

Argentina will once again plummet into despair and the poverty level will shoot through the roof . Argentina bears a heavy burden for the faults that they made but the decisions of the fund managers to force Argentina to default once again will cause untold misery on the poor once again. Finance and bonds are a rich mans game but the poor are the ones that really pay the prices. For them, it won’t be the legality or rule of law but having enough food to eat that will concern them.

Steve Clark

 

Hamas and The U.S. Economy

I have long lived by the certainty that everything is energy. This includes money which, by logical extension of thought, includes the economy. The evolution and advancement of humanity has always been tied to its understanding, harnessing and application of energy. Since human nature, in its lower form, contains elements of both selfishness and greed, there are those who throughout time have sought to understand, harness and apply to their sole benefit, the production and distribution of money for the purpose of concentrating power among the few.

MoneyThe concentration of power among the few can only be achieved at the expense of the many. Which brings me to the invaluable lesson we in the United States and elsewhere can learn from Hamas.

What we witness Hamas inflicting in Gaza, and what occurs throughout the radical Islamic controlled regions of the world, is a combination of physical and psychological enslavement. Through terror, brute force and total disregard for quality of life (or life itself) such “leadership” profits and prospers while sacrificing the very people it claims to be representing.

We in the West should not be quick to judge how the Palestinian population could allow and participate in such a diabolical arrangement as we in the United States are living in an “economic glass house.” Instead of physical and psychological enslavement we in the West have been blindly cooperating in our own financial and psychological enslavement.

By way of understanding and controlling the means of production, distribution and regulation of the energy of money, and the mind-altering control of the means of dissemination of information by media…elites and power brokers in this country have enslaved us as surely as those in countries we condemn for lacking humanitarian policies. The only difference is the subtlety and masking of true intent as executed in the West. While Islamists use kidnapping and torture as their weapons of choice, the U.S. government and global power brokers use the Federal Reserve, the World Bank and social engineering as theirs.

What humanity must do, and do in a hurry before escape (freedom) is no longer a viable option, is to plunge the stake of truth into the heart of the beast of enslavement that has been sucking our life’s blood from us for at least the last 100 years. We can do this by awakening to the truth of what’s happening and taking a lesson from the ancient Israelites who were economically and psychologically enslaved to Pharaoh: they opted out in a hurry.

We too, must now hurry to opt out of a corrupt and diabolical system that manipulates us through the illusions of “lack and fear” and which have caused us to become indebted and addicted to a fiction that “more and faster” is better.

You must opt out of the lie that you are only one person who has no ability to know what is happening to you and lack a voice to articulate that knowing.You must opt out of fear and all its progeny…victimization, depression, frustration, impotence, rage, violence, and hate.

Step into who you are. Step into your connection with all that is good and true. Step into the memory of what freedom feels like and reclaim your birthright.

Slow down. Self-source. Have courage. Trust yourself.

You have the answer. You know the way out.

Carole

What the Marines Can Teach The World of Finance

Before I worked on Wall Street, I served in the Marine Corps as an Infantry Officer in the 1st Gulf War. The Marine Corps trained me in ways of thinking that I still use today and I am forever grateful for what I learned. However, the thing that impressed me most was the integrity of the organization and the unity among its members. The motto “Semper Fidelis” (always faithful) means something real and tangible. They are not merely words.
marinesWhen I left the Marine Corps and entered the world of finance, especially the world of sales and trading,  Semper Fidelis meant nothing. The motto that best describes finance is, sadly, every man for himself. To be fair, I worked with some great people on Wall Street. The critique is aimed at the culture of finance than rather any individuals. Having worked in both worlds, its important to draw out the differences between the two.

The top banks believe the smartest people only go to the best ranked schools, while the Marine Corps believes highly intelligent people come from every walk of life and are educated at diverse institutions. Since the banks have an excess of  applicants, they decided to focus their attention only on those who are “the best” students from “the top schools.” When I worked on the Merrill Lynch sales and trading desk, over 80% of my co-workers had gone to an Ivy League school. The rest of us had worked in finance somewhere else before getting hired. By only selecting students from an approved set of recognized schools, it is easy for  collective group think to set in.

When the banking crisis of 2008 happened, it is no coincidence to me that all the major banks had the same set of problems: over- leveraged positions related to housing.  The main culprit was the AAA ratings that were given to the mortgage pools. My conclusion was and is that had more people within banking had different assumptions about mortgage debt, they would have debated the validity of assigning AAA ratings to pools of mortgage debt and the outcome would have been different.

In contrast the way the marines select their applicants is quite different. The Marine Corps Officer program has a specific way of finding their future leaders. They gather 25% from the enlisted ranks, 25% from the Naval academy, 25% from the ROTC program and the last 25% or so from the Officer Candidate School. Their reasoning is that they look for officers from a variety of background because they know that collective thought is dangerous. The main criteria for being a Marine Officer is intelligence, toughness and integrity. The Marine Corps culture is so strong that given those three ingredients they can mold these men into excellent officers. Given that war is brutal, hectic and confusing it is best to have a variety of backgrounds and viewpoints to solve problems. It is best to have a team with a wide range of backgrounds to come up with the best solutions.

The best banks cull the bottom 10% every year. Banks do this because they feel it gives people the incentive to always work hard and never slack off.  By constantly striving to improve yourself  the top employees never have to worry about being in the bottom 10%.  In practical terms, these policies make everyone incredibly stressed and fearful for their jobs. Having worked in finance, I have seen all types of people fired from the very best to the very worst. Because no one market goes straight up or down, sometimes the best employees get fired when their sector gets creamed. In 2002, thousands of people were fired from the technology sectors because that was the area that had seen the most drop in the market. I know of many great people that were fired during this time and the reality is that it was not because of their being in the bottom 10%.

The Marine Corps strives to create an environment where every one can do well and create a culture that promotes and supports that goal. If the Marine Corps gets saturated with too many Marines in a specific area they will look to transfer and retrain those Marines in a new job function. I have seen Marines transfer from infantry to aviation without any hesitation in order to keep the Marines high functioning and on mission. Because the culture is good at attracting the right people in the first place there is no need to weed them out later on.

In banking every one is a specialist. For example, I use to work on a trading desk and there would be people who would sit 10 seats away from me and I had no idea what they did. On the bond desk, you will have one trader that will only trade a handful of issues and you might find traders that only trade a specific set of derivatives and nothing else. Part of the reasoning is that it is very hard to make money in the financial markets. The only way to do so is to master  a certain niche. It is not unusual to see a trader sit in a certain seat for over 10 years trading the same product every day. If that trader were to make a ton of money for the firm he would then get promoted to run a group. So the qualification for running a group is dependent on your ability to make money in your specialty and not in your ability to manage a group. The fact is you might not have the ability to manage another traders position because you never had any  exposure to do so.

In the Marine Corps every one is a generalist, your job will change every 3 years. You will be moved from job to job to get you as much experience as possible. So by the time you get to a senior leadership position in the Marine Corps you have been exposed to a variety of jobs and settings from which to draw on.

In finance, if you disagree with your boss and the positions he takes you can get fired. In 2006, the head of mortgages for Merrill was fired because he wanted to reduce the firms exposure. His boss, Stanley O’Neal, wanted to increase the exposure as he felt it would make the firm more money. In the end the decision was to fire the head of mortgages which ultimately caused Merrill Lynch to go under. Had the firms leadership not been threatened by his opinion the results would have been different.

In the Marines a lowly Private can change a Generals battle plan.In the Marine Corps if a Private during the battle sees an attack on his unit, that observation will alter the General’s plan. The General will listen and act on the Private’s warnings because he knows if he doesn’t do so, people can die.

When Merrill Lynch fired Stanley O’Neal for the bets he took, he walked away from the firm with over 170 million dollars in the bank. He took all his money while the employees who stayed saw all of their life’s earnings wiped out.

In the Marines, leaders eat last. The subordinates come first and as the famous Marine James Webb stated, “There is no privilege without great responsibility.” Marines lead from the front…not the rear. The Marine Corps General steps on the battlefield with his Marines.

How different Merrill Lynch would have ended up had Stanley O’Neal lived and worked with the people that he had employed.

Steve Clark