Tuesday, March 31, 2009

The man who blew up the world economy

The most interesting read of the day is this New York magazine piece by Michael Osinski, the guy who wrote the software that "invented" the various creative instruments of mass destruction that annihilated the financial sector. He issues a faint mea culpa, pointing out he just invented the bomb. He didn't push the button that triggered it.

He gets into the geekery about how he designed it a bit, but mostly it's an anecdotal piece about how he rose from a $200 a week fisherman to the computer guru of Wall Street. The glimpse into the culture on the trading floor is fascinating.
The world around me, though, had become bizarre. At the time, I had an odd sensation that mortgage traders felt they had to outdo the loutish behavior in Liar’s Poker. The more money they made, the more juvenile they became. What do you expect from 30-year-old megamillionaires whose overwhelming aspiration was something vaguely called Hugeness? They had wrestling matches on the floor. Food-eating contests. Like little kids, they scrambled to hide the evidence when the head of fixed income paid his rare visits to the floor.

Now that I was spending more time on the floor, I wondered why the men’s room always stank. Then one afternoon at three, when I was in there taking a leak, I discovered the hideous truth. Traders had a contest. Coming in at eight, they never left their desks all day, eating and drinking while working. Then, at three o’clock, they marched into the men’s room and stood at the wall opposite the urinals. Dropping their pants, they bet $100 on who could train his stream the longest on the urinals across the lavatory. As their hydraulic pressure waned, the three traders waddled, pants at their ankles, across the floor, desperately trying to keep their pee on target. This is what $2 million of bonus can do to grown men.
Easy money and pure greed bred a generation of well dressed frat boys locked into permanent adolescence. In many ways Osinski's tale is the classic American success story of a humble guy who worked his way to the top. But I think he excuses his own complicity too much. Even if he didn't push the red button, the shitpile could not have been built without him. And he knew what they were doing. It won't be that easy to wash the stink off his hands.

[More posts daily at The Detroit News]

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