The Rogue Identity

 | Sep 16, 2011 | 9:00 AM EDT  | Comments
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We're at Day 2 in the handwringing postmortem of the UBS rogue trader $2 billion loss.

A lot of the focus has been on the use of ETFs and on digging down into what exactly goes on at the Delta One desks.

Here's a nice, succinct definition of the Delta One forces:

Delta One can be considered the last domain of prop trading in the banking sector, where via market-making activities, traders can still get away with taking ample risks.

But the name Delta One is exciting people who have visions of Chuck Norris brandishing a machine gun in the jungle. For me, it conjures up a key phrase from a book that later became a hit movie: The Bourne Identity.

Throughout this surprisingly long and ponderous long book (almost worth the 50p I paid for it at a London flea market) the phrase "Cain is for Charlie, and Delta is for Cain" keeps appearing. It's the key to Jason Bourne finding his identity and as repetitive as a jackhammer, hitting you until you're almost desperate for Matt Damon to turn up (something Ben Affleck does every time his agent sends him a new script).

Tenuous connection here so far, but a lot of the action in the book also takes place in Bahnhoffstrasse in Zurich, where you can find UBS' HQ. This intrigues me. I'm a firm believer in the theory that when investment bankers look like they have no idea what they are doing, in public, they are at their most crafty.

What's the benefit? It's taken the heat off every eurozone politician having his or her words parsed by investors and actually let them make some initial progress on eurozone bonds. And the major indices could close out the week with gains in four-straight sessions.

In addition, barely anyone has noticed the Greeks haven't made their 90% target on bond swaps and are being as opaque as ever.

That makes Kweku Adoboli, by all accounts a very nice individual, the fall guy. But Wall Street comebacks are commonplace. What would UBS get out of it? How about exclusive rights to eurobond auctions?

Climbing out of the black helicopter, if this is just a big lack of oversight by UBS I hope it doesn't prevent banks from using cool names in the future. I'd love to see some trading desk called Operation Calamity. Or they could sell sponsorship deals to desks like stadium naming rights.

Goldman Sachs' Foot Locker Fixed Income Group has a nice ring to it.

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