Untill a few weeks ago Bruno Iksil used to be a trader at the London office of JP Morgan Chase. He is known to be the man who has earned the dubious distinction of bringing a loss to the tune of $2Billion (yes, that's 2000 Million Dollars!!). His fault, making bets on trades way beyond the risk he may have been allowed by the so called 'Risk Manual'. That's how he acquired the the name 'London Whale'. What got into him , no one knows for sure. For his colleagues knew him as a rather bearish trader. Greed perhaps. Perhaps acting on someone else's behalf. Infact, It is said his operations had been earning the bank profits of about a $100 million every year for the last few years. Knowing well, the kind of bonuses people like investment bankers, traders make, he already would have become a rich man quite sometime back.(He travels to work from Paris to London.....daily and works from home on Fridays. Some lifestyle!)
He was a ‘whale’ for sure. A big
one at that. Placing bets on trades of humongous proportions and earning his
employers 100s of millions of dollars in the 7-8 years he traded for them. Then
what went wrong? Well, nothing much just that this last trade he made on behalf
of JP Morgan back fired. He had been building on this trading position on this
particular credit derivative for many months and somewhere across the Atlantic,
a certain Mr.Boaz Weinstein, Hedge Fund manager working out of his Manhattan office, noticed certain aberrations in the trades or the index to which the particular credit default swap paper was linked. He
pounced on the opportunity. He is a
former ‘whale’ himself and for the 11 years he worked for Deutsche Bank, his
transactions as trader made profits for the bank for 10 years of those 11years.
Reports say, At 27, he was the youngest MD of the bank…..Ever. Later, he moved on to float his on Hedge Fund. All investment
bankers & capital market dealers are
razor sharp, that’s the first mandatory requirement for this job, the second is
the brains to make split second decision and third, the heart to absorb big
(read huge) losses and this guy was a prodigy all the way. He and a few others
went on buying as Iksil went on selling and after initially making notional
losses when the particular derivative paper appreciated, they went for the
kill. When the dust setlled JP Morgan had lost more than $2 billion dollars and someone asked a pertinent
question that who was on the other end of the spectrum ie, if JP Morgan made a
loss of $2 billion then who made the profit ?. The very likely answer is
Mr.Weinstein & a few like him. This one deal surely made Boaz richer, some say, by many a
hundred MILLION dollars.
Hmmmm... so where do Gospel
readings during Mass yesterday & today fit into this story from the capital
markets. Yesterday’s readings were Mark 10:17-27. (click to link to verses) A very rich man came to Jesus
and asked what must he do to be saved? That he had fulfilled all the requirements
of the law as laid down in 10 commandments. The Lord’s straight forward answer
was to sell all of his possessions and give it to the poor “and you will have
treasure in heaven.” The rich man went back very sad for he couldn’t bear the
thought of losing his possessions and the Lord told disciples that "It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God". Today’s Gospel readings continue from where
we left yesterday ie Mark 10:28-31. Peter upon seeing the rich man go back sad,
asks the Lord what will happen to them (disciples) and to those like them who
have left everything and everyone to follow Him (Jesus). To this Lord’s answer
is again very crisp and clear. Of all who have left everything, there is no one
who will not get a 100 fold in this life itself, along with persecution and
finally eternal life in heaven. He promises all these 3 things together. As a christian I will have to take it as a package, either leave it all or take it all, persecutions & humiliations included. Wow!!
I am no one to pass judgment upon
either Mr.Iksil or Mr.Weinstein as I do not know what their intentions were
or where their heart is with respect to the pleasures of the world. Making
money is not a sin and nor is being rich. If it weren’t so, Jesus wouldn’t have made
the promise (of 100 fold returns) to Peter above. But holding on to your riches and not sharing it with needy is. The Bible says in the new testament by St. Paul in his first letter to Timothy the
love money is root of all evil ( ie, not money itself) and also in the letter to Hebrews to be free of the love of money and the importance of being content. The rich man who came to Jesus went back sad as he loved his wealth too much and was not willing to let him go. It is indeed next to impossible for mortals like us to let go but then the Lord gives us hope in the end of yesterday's reading itself. "With men it is impossible, but not with God; for all things are possible with God." So all I need to do is to make the effort to let go and at the same time trust Him to come and help me to let go of my attachments.
Personally, I am impressed by both Iksil & Weinstein. These are guys who were at the top of what they were doing and doing it to the best of their abilities except for the fact that they might have driven by sheer greed, in which case, I am not a fan of theirs. As of today, one has lost his position as a trader, some say he was dealing on behalf of the 'biggies' in the company. And the other is laughing all the way to the bank. But this happens. Especially in the crazy world of credit default swaps. I am sure they know this is just another phase in their careers. May be it is my past experience in the corporate world which makes me feel so about them. I worked with various mutual funds for 9 years before becoming a missionary, though I was not a dealer or a trader (Unfortunately or fortunately, I cannot say). Was never sharp enough to be one. Don’t know what I would have done with that (kind of) money. But I am not at all for collateral damage falling upon common man. The small fish, as they say, has to bear so painfully, the brunt of these financial scams.
And I do know that the Lord has provided for my needs and has given me more than I have myself given away/up. So His promise is surely holding true. All I need to do is to continue to focus on Him rather than being distracted by the stuff around me that lure me away from Him. Pray that the rich & famous realise that life is short, there is an impending judgement and when they go 6 feet under packed in a wooden box or cremated, as the case may be, they are not going to take a dime of their billions along with them. There will be a day when the Lord sits down to, if I may use the financial term, square up His positions and I hope that both Iksil & Weinstein come out as winners then.
Personally, I am impressed by both Iksil & Weinstein. These are guys who were at the top of what they were doing and doing it to the best of their abilities except for the fact that they might have driven by sheer greed, in which case, I am not a fan of theirs. As of today, one has lost his position as a trader, some say he was dealing on behalf of the 'biggies' in the company. And the other is laughing all the way to the bank. But this happens. Especially in the crazy world of credit default swaps. I am sure they know this is just another phase in their careers. May be it is my past experience in the corporate world which makes me feel so about them. I worked with various mutual funds for 9 years before becoming a missionary, though I was not a dealer or a trader (Unfortunately or fortunately, I cannot say). Was never sharp enough to be one. Don’t know what I would have done with that (kind of) money. But I am not at all for collateral damage falling upon common man. The small fish, as they say, has to bear so painfully, the brunt of these financial scams.
And I do know that the Lord has provided for my needs and has given me more than I have myself given away/up. So His promise is surely holding true. All I need to do is to continue to focus on Him rather than being distracted by the stuff around me that lure me away from Him. Pray that the rich & famous realise that life is short, there is an impending judgement and when they go 6 feet under packed in a wooden box or cremated, as the case may be, they are not going to take a dime of their billions along with them. There will be a day when the Lord sits down to, if I may use the financial term, square up His positions and I hope that both Iksil & Weinstein come out as winners then.
