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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe Wolf Hunters of Wall Street
http://www.nytimes.com/2014/04/06/magazine/flash-boys-michael-lewis.html?_r=0Before the collapse of the U.S. financial system in 2008, Brad Katsuyama could tell himself that he bore no responsibility for that system. He worked for the Royal Bank of Canada, for a start. RBC might have been the fifth-biggest bank in North America, by some measures, but it was on nobodys mental map of Wall Street. It was stable and relatively virtuous and soon to be known for having resisted the temptation to make bad subprime loans to Americans or peddle them to ignorant investors. But its management didnt understand just what an afterthought the bank was on the rare occasions American financiers thought about it at all. Katsuyamas bosses sent him to New York from Toronto in 2002, when he was 23, as part of a big push for the bank to become a player on Wall Street. The sad truth was that hardly anyone noticed it. The people in Canada are always saying, Were paying too much for people in the United States, Katsuyama says. What they dont realize is that the reason you have to pay them too much is that no one wants to work for RBC. RBC is a nobody.
Before arriving there as part of the big push, Katsuyama had never laid eyes on Wall Street or New York City. It was his first immersive course in the American way of life, and he was instantly struck by how different it was from the Canadian version. Everything was to excess, he says. I met more offensive people in a year than I had in my entire life. People lived beyond their means, and the way they did it was by going into debt. Thats what shocked me the most. Debt was a foreign concept in Canada. Debt was evil.
For his first few years on Wall Street, Katsuyama traded U.S. energy stocks and then tech stocks. Eventually he was promoted to run one of RBCs equity-trading groups, consisting of 20 or so traders. The RBC trading floor had a no-jerk rule (though the staff had a more colorful term for it): If someone came in the door looking for a job and sounding like a typical Wall Street jerk, he wouldnt be hired, no matter how much money he said he could make the firm. There was even an expression used to describe the culture: RBC nice. Although Katsuyama found the expression embarrassingly Canadian, he, too, was RBC nice. The best way to manage people, he thought, was to persuade them that you were good for their careers. He further believed that the only way to get people to believe that you were good for their careers was actually to be good for their careers.
His troubles began at the end of 2006, after RBC paid $100 million for a U.S. electronic-trading firm called Carlin Financial. In what appeared to Katsuyama to be undue haste, his bosses back in Canada bought Carlin without knowing much about the company or even electronic trading. Now they would receive a crash course. Katsuyama found himself working side by side with a group of American traders who could not have been less suited to RBCs culture. The first day after the merger, Katsuyama got a call from a worried female employee, who whispered, There is a guy in here with suspenders walking around with a baseball bat in his hands. That turned out to be Carlins chief executive, Jeremy Frommer, who was, whatever else he was, not RBC nice. Returning to his alma mater, the University at Albany, years later to speak about the secret of his success, Frommer told a group of business students: Its not just enough to fly in first class; I have to know my friends are flying in coach.
<snip>
http://www.nytimes.com/2014/04/06/magazine/flash-boys-michael-lewis.html?_r=0
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The Wolf Hunters of Wall Street (Original Post)
LiberalArkie
Mar 2014
OP
hatrack
(59,585 posts)1. K&R - This is really important, and a really fascinating story
Thanks for the post!
mainer
(12,022 posts)2. I just read this. It's sickening and fascinating and needs to be read.
So want to kick this again.
Another reminder of why Canadians are not like Americans.