Is Wall Street Bluffing?

According to the Los Angeles Times, some Wall Street firms don't care if a new job applicant went to business school or studied finance. The applicant probably didn't even have to graduate from high school. The firms are much more interested in how the young man or woman plays poker. That's right, sometime during the job interview, the interviewer takes out a deck of cards and deals. Another demonstration of Wall Street's love affair with poker is that at least one trading firm has their new traders play poker for one full day a week.

Many of those who apply for investment jobs are good at poker because of their experience playing online and watching on television. What is the typical personality of someone who spends hours alone at home playing poker with other people who are alone in their homes? He or she doesn't exactly sound like a "people person." In televised poker tournaments, the players who are successful are often dressed like cowboys or sport heavy jewelry like Mr.T used to wear. In this time of precarious finances, would you want these people to handle your money just because they once won a big pot with a six-high-straight?

Some financiers take this poker thing quite seriously. Aaron Brown, an executive director at Morgan Stanley has written a book called "Poker Face Wall Street." In it, he advises investors to embrace risk, not avoid it. Isn't that what got America in so much trouble? Is that what we need now, more risk and less caution? Are these "experts" so unhappy with the economy making somewhat of a comeback that they want to see it fall apart again? Try telling the autoworkers in Detroit who have finally gone back to work that risk should be what guides their pension plans again. They'd be tempted to run you over with that new Camaro.

Some point to the fact that people like Bill Gates, H.L, Hunt, and Kirk Kerkorian liked to play poker when they were younger. They probably also liked to sleep, but nobody is pointing to a good mattress as the key to riches. I have the feeling that there were other things besides playing poker with his buddies that made Bill Gates one of the most successful people in the world. It's just possible that in addition to knowing that a flush beats a straight, Gates is inventive, smart, and creative.

I'm not saying that game playing can have no part in preparing one for success. If you were to ask President Obama about games, I have the feeling he'd say that basketball teaches the player about preparation and teamwork, and about winning and losing. I'd have to agree, but I still wouldn't ask Charles Barkley to invest my money for me.

About those poker playing investment traders: While there is something to be said for people having the experience of gambling with their own money before they gamble with a client's, I don't want someone who's investing my money to think of it as a game.

Poker might not even be the best game that prepares a young trader for his profession. How about leapfrog? That teaches people how to jump over others, not caring if they knock them over. That could be a game that helps Wall Street types get ahead. Tic-tac-toe teaches you that some people will play the same game over and over again even if nobody wins. That's perfect training for grinding out commissions over and over again. One of my favorites is the preschool game of "Duck, Duck, Goose." I have no idea how this game could prepare someone for Wall Street, but I'd still love to see a video of those guys in their three piece suits, telling their assistants to hold their calls while they run in a circle calling out, "Duck, Duck, Goose."

Theoretically, a poker face makes it impossible for anybody else to know what you're holding. Then you can bluff and finally you can put all the money in the pot. They call that "big time poker." A little while ago, that kind of manipulation was called, "selling sub-prime mortgages and worthless paper."

Greed: Not So Good

A question that many of us would love to have answered is, whatever happened to those original billions in Wall Street bailout money? Would we be wrong to say that some of that went down the toilet?

It's hard to remember since there have been so many plans, but wasn't the money from Bailout #1 supposed to help the banking and mortgage crisis? Well, have you or any of your neighbors felt that your mortgage problems have gotten better since the banks got this money? Or maybe they decided to help us another way: has your savings account interest gone up since they increased the amount of cash in their vaults? I don't think so.

F. Scott Fitzgerald famously said, "The rich are different from you and me." Ernest Hemingway replied, "Yes, they have more money." But now it's obvious that some of them also have more gall, chutzpah, ego, selfishness, and imported area rugs.

Like the rest of us, the wizards of Wall Street saw how foolish the Not So Big Three automaker heads were when they flaunted their luxurious ways by flying to Washington the first time in their private jets. Yet Citigroup didn't cancel the order for its new $50 million jet until it was pressured by the Obama administration. Now that it cancelled it, Citigroup might not get its deposit back. Do you feel as sorry for them as I do?

As billions flew into banking coffers courtesy of, well, us, millions flew right out of those coffers in the form of bonuses. That's right. Some bailed-out banks gave big bonuses to their bosses. I didn't watch every minute of the news during those early bailout days, but I don't think that's what the money was intended for.

Oh, there's something else that some of these greedy executives are -- clueless. What's missing in their brains that tells them it's okay for them to accept huge bonuses while others would consider it a bonus to just still have jobs?

Their rationalizations are succinct, but absurd. In the case of the GEO's (Greedy Executive Officers), they claim that their company needs to attract the best people to do the best job, and those people sometimes like to be pampered.

John Thain is an executive who liked to be pampered. The recently fired GEO of Merrill Lynch & Co., spent $1.2 million last year to renovate his office. His office. While he was at his very beautiful desk, his company gave out an undisclosed amount of bonuses. These bonuses were paid after, you may recall, Merrill Lynch was rescued by Bank Of America which was helped by – you guessed it, us.

But back to Thain's office. Among the things he had his company pay for were $87,000 area rugs, a $25,000 pedestal table, a $68,000 19th-century credenza, an $18,000 chair, a $16,000 custom coffee table, and a $35,000 antique commode. It wasn't even a new toilet, but the guy spent thirty-five grand for it.

Once Thain was caught with his pants down, he said that he would pay the money back to the company. He added that considering the times, this expensive redecorating was a mistake in judgment.

Hiring Thain was the real mistake in judgment. He wasn't just fired because of his extravagant office tastes. He was let go because while he was in charge, Merrill Lynch lost more than $15 billion in one quarter. That's $5 billion a month or about $166 million a day. If he put in an eight-hour workday, he lost about $21 million an hour, $346,000 a minute, or $5,787.04 a second. This business expert lost money probably faster than anyone can print it.

That's what's so aggravating about all this. These people who have been buying islands and giving their kids platinum pacifiers aren't necessarily geniuses. They are the same jerks that got us into the big financial mess in the first place.

Whoever came up with the idea of giving bonuses to people who do a bad job probably never filled up his car with gas by himself, never took out the garbage, and never uttered the words, "Is this going on sale soon?" If these people had done a great job, their desire for money and luxurious things wouldn't seem so absurd. Let's put it this way: if any of them had made a profit instead of a loss of $15 billion in the fourth quarter of last year, they'd deserve to have any kind of toilet they want in their office. But I still think that 19th-century credenza is a bit much.