Via Ghost Exchange, excerpts from a fascinating PBS interview with former hedge fund analyst Cathy O’Neil on the culture within Wall Street:
The basic cultural assumptions were not pleasant to me. The sort of most basic cultural assumption was that as a smart person, we have the right to take advantage of the system and of “dumb people.” And that is sort of — I mean, I guess I should have known, going into a hedge fund, that’s what people think.
I was thinking of it naively, more like, “Oh, there’s a system, and we should see what inefficiencies there are in the system and add information.” I mean, I just sort of drank that Kool-Aid. But once I was inside, I realized that’s not really how people think about it. They think, “Well, of course we’re going to take advantage, because we’re smart, and we can. We have better tools, and our tools are our brains.” Take advantage of absolutely everything and everyone that we can, in any way we can.
You know, Occupy Wall Street from the very beginning was being criticized. The people in Zuccotti Park, the occupiers were being criticized for not really knowing how the system works. And what I realized was, you know what? Nobody knows how the system works. Even the people in finance don’t understand the system.
They understand their little corner of the system. If it’s securitized products, they understand how that works. If it’s, you know, arbing [arbitraging] the equities market, they understand how that works. But very few people would come forward and say: “I know how everything works.” It’s a huge black box, in other words, and they are seeing the output of that black box.
Read the rest at Ghost Exchange