Wednesday 1 April 2009

Financial Incentivisation: The Golden Years

Michael Osinski wrote the software that turned collateralized mortgage obligations (CMOs) into tradeable assets. CMOs seem to have been a softer, gentler precursor of the infamous collaterized debt obligations (CDOs) whose massive use blew the financial system apart. So what was life like as a humble programmer amongst the masters of the universe?

"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."

Well, not that grown as men go after all - at one point Osinski refers to '30-year-old megamillionaires '. Surely the silver haired old money of top management was cut from a very different jib? Well, yes, as they showed in the lean times of 1995,

"We had to lay off half of research. .After a day of bloodletting, one of the bosses cornered me in the hallway. Did I get a sexual thrill out of firing people, he wanted to know, because it had always worked for him, big time."


No comments:

Post a Comment