When tight traders got up to cheap tricks

Fake Rolex

Our Highly Placed Professional spills the beans on life in the good old days.

Reading the article about the Goldman cafeteria reminds me of some of the most parsimonious behaviour I ever witnessed during my long career in the markets.

When I was at UBS in New York many moons ago, the firm announced an end to the free lunch policy at the pantries on each corner of the massive dealing floor. As soon as this policy got out, many of the guys in corporate bond sales starting stockpiling free bottles of soda and water under their desks.

I mean it was ridiculous - some of them could hardly sit down since they were atop mountains of soft drinks. Then the sales guys started trading 10 lots, or even the odd 'hundo' as we got closer to the deadline when you had to start to pay for everything. And these were all guys making millions!

Another cafeteria wheeze I witnessed during my time on Wall Street was traders putting ice cream in the soup containers. Sounds strange, but it turns out you were charged a lot more for ice cream than you were for soup. So some bright spark saw the arbitrage and went for it.

Of course this was tantamount to theft, and brings to mind the repackaging of mortgage backed securities a few years later. All those soup containers with their frozen contents needed was a good dose of triple AAA ratings to become the real McCoy! Anyway, it saved a few titans of Wall Street a few bucks on an ice cream, even if they were risking their careers for it.

And what do you do when your firm gives every staff member a gleaming gold watch to mark its anniversary ? Naturally, I put mine on and got mercilessly ribbed for it. But more cost conscious and trading orientated colleagues started making markets in them. 'I'm par to par ten, 5 by 5!' went up the cry. So I promptly paid $550 for five watches, sold two away at a decent profit due to the market frenzy and kept the rest as presents. My mother in law still wears hers sometimes. There was method in my madness, you see.

But the best dodge was surely when I first started out in the markets in London. My firm paid us newbies overtime, so if you clocked in before 7.15am you got paid overtime from 7 till 8.00 a.m. But if you missed the deadline, you got nothing.

And in the evening, if you stayed after 5.30pm, the overtime started totting up. Some braver souls than me left promptly after 5pm to go to the pub for a swift one (or two) and then returned to the office later to clock off.

One poor chap got sloshed one night and unfortunately forgot to come back in to clock off. The firm took all his overtime back for that month (disaster!), and he was threatened with the sack if it ever happened again. But we were young, and loved trying to get one over the company. Just goes to show we all like to bite the hand that feeds us!

images: © teegardin, © sonictk

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