The dog in the night time: Difference between revisions

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Theories:
Theories:
====Disbelief-suspenders====
*'''Over-reliance on regulators''': we imagine regulators/rating agencies are better resourced, more powerful and more talented than they are.  - assumed the SEC was doing its job
*'''Over-reliance on regulators''': we imagine regulators/rating agencies are better resourced, more powerful and more talented than they are.  - assumed the SEC was doing its job
*'''Credibility''': Connection to well-regarded community pillars - If George Schultz is on the board the company must be legit, right? We imagine community pillars have done their due diligence on our behalf?
*'''Credibility''': Connection to well-regarded community pillars - If George Schultz is on the board the company must be legit, right? We imagine community pillars have done their due diligence on our behalf?
*'''Interconnectedness of red-flags
*'''Cult of personality''': A single Svengali, genius, Nobel prize-winners, NASDAQ chairmen,
*'''Belief in paradigm shift as part of the story''': We’ve banished risk. The internet has changed economics forever
*'''This time it’s different''': A paradigm shift as part of the narrative. We’ve banished risk. The internet has changed economics forever
*'''Micromanager''': Single person unusually able to influence/control the narrative
 
*'''Cult of personality''': single svengali, genius, nobel prize-winners, NASDAQ chairmen,
====Nothing to see here folks====
*'''Sleepy backwater''': It’s a boring and unglamorous part of the operational network. No one’s taking any risks there: Libor, Kerviel, Abodolo
*'''Weird whistleblowers''': The people who called it out were unglamorous, outsiders, easy to catagorise as cranks
 
====Porkie Indicators====
*'''No errors''': no screw ups, no bad launches: everything is fine. Real companies have setbacks. Especially if defended with hostility - e.g., you threaten to ruin EVERYTHING with your questions.
*'''The dog ate my homework''': Promised answers to your questions are delayed, derailed, lost or excused. There's an excuse for everything. The excuses are implausible/out of proportion with the question. (what's the most plausible explanation: The dog really did eat your homework or ---?
 
====Cloaking devices====
*'''Micromanagement''': Single person unusually able to influence/control the narrative.
*'''Secrecy''': Insistence on confidentiality not just of unannounced plans but of entire operation. Black box operations.
*'''Secrecy''': Insistence on confidentiality not just of unannounced plans but of entire operation. Black box operations.
*'''Hostility''': combative/aggressive demeanour to criticism
*'''This is different how?''': To what extent is “fake it till you make it” bravura, and how much is it confidence in your ability to sort it out later, or big opportunities. Is there a difference?
====All is not well====
*'''High turnover''': Especially when combined with confidentiality. Workplace bullying etc.
*'''High turnover''': Especially when combined with confidentiality. Workplace bullying etc.
*'''Hostility''': combative/aggressive demeanour to criticism
*'''Who’s that guy?''': A position of unusual influence with a flaky backstory
*'''No errors''': no screw ups, no bad launches: everything is fine. Real companies have setbacks. Especially if defended with hostility - e.g., you threaten to ruin EVERYTHING with your questions.
*'''A big problem is a small problem that hasn't grown yet''': Often big problems start out as small problems, where a well-intended patch didn't play out. How disciplined is your organisation with sweating the little stuff. and what of the trade off between “bureaucracy” and “discipline with sweating the small stuff”?
*'''The dog ate my homework''': Promised answers to your questions are delayed, derailed, lost or excused. There's an excuse for everything. The excuses are implausible/out of proportion with the question. (what's the most plausible explanation: The dog really did eat your homework or ---?
*'''Sleepy backwater''': It’s a boring and unglamorous part of the operational network. No one’s taking any risks there: Libor, Kerviel, Abodolo
*'''Weird whistleblowers''': The people who called it out were unglamorous, outsiders, easy to catagorise as cranks


====Correlation risks====
*'''Interconnectedness of red-flags
With all the checks and balances in financial regulation, how did:
With all the checks and balances in financial regulation, how did:
===Examples===
*[[Bernie Madoff]] get away with it?  - Author Harry Markopoulous
*[[Bernie Madoff]] get away with it?  - Author Harry Markopoulous
*Nick Leeson
*Nick Leeson
Line 29: Line 46:
*Libor
*Libor


===Women in STEM===
==Women in STEM==


Does regulation work?
Does regulation work?
- Netting
- Netting
- Diversity
- Diversity

Revision as of 15:22, 28 January 2019

Podcast idea - look at unusual anomalies in the markets and ask why they persist

Categories

Fraudsters

what are the red-flags that an out and out fraud, pyramid, ponzi scheme is going on? are there some consistent themes?

Theories:

Disbelief-suspenders

  • Over-reliance on regulators: we imagine regulators/rating agencies are better resourced, more powerful and more talented than they are. - assumed the SEC was doing its job
  • Credibility: Connection to well-regarded community pillars - If George Schultz is on the board the company must be legit, right? We imagine community pillars have done their due diligence on our behalf?
  • Cult of personality: A single Svengali, genius, Nobel prize-winners, NASDAQ chairmen,
  • This time it’s different: A paradigm shift as part of the narrative. We’ve banished risk. The internet has changed economics forever

Nothing to see here folks

  • Sleepy backwater: It’s a boring and unglamorous part of the operational network. No one’s taking any risks there: Libor, Kerviel, Abodolo
  • Weird whistleblowers: The people who called it out were unglamorous, outsiders, easy to catagorise as cranks

Porkie Indicators

  • No errors: no screw ups, no bad launches: everything is fine. Real companies have setbacks. Especially if defended with hostility - e.g., you threaten to ruin EVERYTHING with your questions.
  • The dog ate my homework: Promised answers to your questions are delayed, derailed, lost or excused. There's an excuse for everything. The excuses are implausible/out of proportion with the question. (what's the most plausible explanation: The dog really did eat your homework or ---?

Cloaking devices

  • Micromanagement: Single person unusually able to influence/control the narrative.
  • Secrecy: Insistence on confidentiality not just of unannounced plans but of entire operation. Black box operations.
  • Hostility: combative/aggressive demeanour to criticism
  • This is different how?: To what extent is “fake it till you make it” bravura, and how much is it confidence in your ability to sort it out later, or big opportunities. Is there a difference?

All is not well

  • High turnover: Especially when combined with confidentiality. Workplace bullying etc.
  • Who’s that guy?: A position of unusual influence with a flaky backstory
  • A big problem is a small problem that hasn't grown yet: Often big problems start out as small problems, where a well-intended patch didn't play out. How disciplined is your organisation with sweating the little stuff. and what of the trade off between “bureaucracy” and “discipline with sweating the small stuff”?

Correlation risks

  • Interconnectedness of red-flags

With all the checks and balances in financial regulation, how did:


Examples

  • Bernie Madoff get away with it? - Author Harry Markopoulous
  • Nick Leeson
  • Theranos
  • Enron
  • Dot com bust
  • CDOs
  • Libor

Women in STEM

Does regulation work? - Netting - Diversity

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