What's the difference?

[Ironballs]

Just what is the difference between Nick Leeson and the current crop of banking geniuses? I assume there must be a fine line somewhere between Leeson and his rogue trading incurring a 400M deficit to bring down Barings and Goodwin and co with their dodgy trading that incurred a 25BN deficit that brought down the British economy.

So why did Leeson do time and this lot are not inside the multi-storey chokey?

 

[BradNaylor]

So why did Leeson do time and this lot are not inside the multi-storey chokey?

Because Leeson was a low level trader who got out of control and it was easy to pin the blame on him without harming the old boys network.

This time the culprits are the old boys network! They will do all they can to protect their own.

Bastards.

 

[Jake]

Vague analogy:Nick Leeson was someone who promised to make gold out of MDF, and did, for himself, for a while. He did this by buying what he knew was MDF, but recording it in his accounts as gold.

The bankers presently in disfavour bought what they genuinely thought was MDF and recorded it inntheir accounts as MDF - but some of it turned out to be to chipboard, or just plain old weetabix, and all overpriced, with hindsight.

 

[BradNaylor]

Vague analogy:Nick Leeson was someone who promised to make gold out of MDF, and did, for himself, for a while. He did this by buying what he knew was MDF, but recording it in his accounts as gold.

The bankers presently in disfavour bought what they genuinely thought was MDF and recorded it inntheir accounts as MDF - but some of it turned out to be to chipboard, or just plain old weetabix, and all overpriced, with hindsight.

Not quite...

Nick Leeson briefly did make gold but as he continued to trade, these gains turned to losses. He attempted to cover up his ongoing losses by ever more creative accounting until he finally broke the bank.

The bankers currently in disfavour got swept away in a fervour of greed and incompetence. They ignored the most basic rules of investment; 'If it seems too good to be true, it probably is.' and 'What goes up, must come down'.

There never was any intrinsic reason why property values soared in the USA and across the world; it was a classic bubble mentality and the banks were the main culprits, gambling billions of other peoples' money feeding demand and prices even further.

The inevitable result was obvious to many of us years ago. I have been discussing the 'credit crunch' on other forums since around 2004, when it was merely a hypothesis. For bankers to claim that 'no-one could have seen it coming' is patently a lie.

They are as guilty as sin.

Dan

 

[Jake]

Not quite...

Nick Leeson briefly did make gold but as he continued to trade, these gains turned to losses. He attempted to cover up his ongoing losses by ever more creative accounting until he finally broke the bank.

He wasn't jailed for the bit where he made money.

His fraud wasn't creative accounting - it was a ton of absolute lies!

They are as guilty as sin.

Of negligence, maybe. But that isn't a crime.

 

[neilc]

Vague analogy:Nick Leeson was someone who promised to make gold out of MDF, and did, for himself, for a while. He did this by buying what he knew was MDF, but recording it in his accounts as gold.

The bankers presently in disfavour bought what they genuinely thought was MDF and recorded it inntheir accounts as MDF - but some of it turned out to be to chipboard, or just plain old weetabix, and all overpriced, with hindsight.

Permanent TSB over here lodged something like 7bn into Anglo Irish Bank on the last day of the financial year to make it's balance sheet look healthy. If that's not creative accounting I don't know what is. The worst thing is our financial regulator knew about it and did nothing (since resigned with a nice golden handshake).
Neil

 

[Jenx]

This time the culprits are the old boys network! They will do all they can to protect their own.

Surely not :wink:
Aye the old 'square and compasses' and two-tone checkerboard is a very effective way of remaining innocent / avoiding having to take responsibility for national disgraces etc etc.

 

[Larry James]

...The inevitable result was obvious to many of us years ago. I have been discussing the 'credit crunch' on other forums since around 2004, when it was merely a hypothesis. For bankers to claim that 'no-one could have seen it coming' is patently a lie.

They are as guilty as sin.

Dan

Dan,

I agree, in the US you could see it coming. My son, who lives near Chicago, told me several years ago banks were making loans without verification of income or down-payment - including loans to illegal immigrants! I told him there was no way a bank would loan money under those circumstances. I had to eat my words.

As long as the money was rolling in the Government, bankers and Wall St. did not see it coming because they intentionally looked the other way.

Larry

 

[George_N]

I thought it was just The Alchemist who could turn MDF into gold :wink: