"Let's assume I want to be a part of it." "How should I act and what can I expect?" "Collect the necessary 'pats on the back' without a murmur." "You get them by doing 'one-nighters' and 'two-nighters'." "A 'one-nighter' means spending the night in the office." "A 'two-nighter' is two nights in the office or working straight through." "If you do this often enough ... eventually someone will entrust you with larger tasks." "But only if you don't arouse the slightest doubt." "Or even hint... that things could be done differently." "No political statements." "And:" "Absolute loyalty to the organisation." "Basically you have to be willing to give up your life." "How does a 'two-nighter' work?" "Well, the boss comes to you and says: "Listen up." "Something just came in." "The day after tomorrow, we have to present a concept to company X, Y, Z:" "How they can finance the buyback of 10% of their shares ... and an estimate of how this will affect the market, etc." "Sorry." "I know it's your birthday and you wanted to go out with your girlfriend, but I can't think of anyone else I can pass this on to."" "This one's in the bag." "Then he sits down and makes a PowerPoint presentation." "At 2:00 a.m. he falls asleep at his desk." "At 5:00 a.m. the cleaning lady wakes him up." "Then he gets back to work." "Don't question whether it makes sense to buy back those shares." "Basically it's like being in the army." "I've been talking to our lawyer." "There shouldn't be any problems as long as we don't mention names or disclose any business secrets." "We may not infringe on any personal or privacy rights." "I'd suggest you confer with your lawyer as well, also regarding the work contracts, to make sure we're on the safe side." "That building over there with the round tower on top ..." "If you try to picture it ..." "You see the white pane on top..." "Try to imagine..." "that's where the Citibank logo was." "That was the Citibank headquarters." "Then Merrill Lynch moved in." "On 20 floors." "Later on, Bloomberg." "Now it's the Bank of Communication from China." "I think that's about it." "Here we have..." "You can see the leap the Commerzbank has made." "The building with the green roof ... was the original building of the Commerzbank in Frankfurt." "Then the first tower came." "The dark brown one between the Japan Tower and the Taunus Tower." "Right behind it soars... the latest building of the Commerzbank." "They added an antenna to make it higher than the Deutsche Bank." "Looks like this was supposed to be the trading floor." "Those are the server racks." "If this was meant to be a trading floor, then it's a really small one." "The ideal trading floor doesn't have any walls, and preferably no such posts." "It's rather like a soccer field:" "open without any boundaries." "In the past, you relied more on verbal communication." "You had to call out to each other." "That's why it was important." "People stood up and gestured across the room to clarify things." "Today you have small chat rooms." "You don't have to shout anymore." "The trading floors of the major banks," "I think the biggest one is UBS in Greenwich." "It has about 1000 workstations." "1000 people on one floor." "I don't know how many fit in here." "Maybe 100, 150." "If even that." "It's sort of a sacred place:" "You pass through the security gate, and go to your desk and push a button, and it goes 'bzzzz'." "Then ... your neighbour arrives and says, "Good morning"." "He pushes his button and it goes 'bzzzz'." "Eventually everyone's there, and the whole thing picks up speed." "Around 9 or 10 a.m. it starts getting loud." "It's like the command centre of Starship Enterprise." "This sounds crazy, but somehow you feel..." "It's the ingredient that makes you feel like the Master of the Universe." "You sit there in a really comfortable chair." "There are 6 or 8 screens all around you, with funny things flickering on them." "You have 2 keyboards and a telephone and a mouse or two." "You can just..." "It's not for everybody, but I found it quite fascinating." "That was 1986." "Thatcher and Reagan." "They basically unleashed the first wave of privatisation." "Here in Germany, we'd had a cosy capital market zoo." "Up to then." "Everything was regulated." "Then foreign banks were licensed in Germany." "And these people from America came." "We thought they could walk on water." "They wore strange braces and broad-striped shirts." "They explained to us how things work." "It was fascinating." "You were sent to seminars." "They showed you how 'swaps' work, how 'options' work and 'financial innovations'." "'Financial innovations' were all the rage." "We hung on their every word." "We held them for godlike creatures who'd been sent to us." "Then all those instruments were approved in Germany, too." "Which, I'd like to emphasize, was not bad." "It was ... a very anachronistic system." "A closed system with designated regional entities." "It was unsuitable for moving the economy into the 21st century." "The real economy and the financial economy were put on par." "Technically." "Then the financial economy was a step ahead of the real economy." "That's the situation we're in right now." "Is deregulation to blame?" "No." "Was it a prerequisite?" "Yes." "Back then..." "It was a Bavarian bank." "I spent weeks driving through the countryside." "As far as the Czech border." "I can't remember where all I went." "We gave lectures to expand our product range." "Our audiences weren't exactly thrilled by my presence." "You might be able to imagine why given the regional context." ""We've always done it this way, huh."" "They don't want to deal with new things." "I used to tell people:" ""You're far from Frankfurt." "You're far from London." "This doesn't mean no one's going to come see you, but it might take longer."" "I wasn't even 30 at the time." "This was a way to make a name for yourself, because it was very specialized knowledge." "There were only 10 or 15 people at the bank who knew this stuff." "If you were one of them, then age was no issue." "You were considered the expert ... no matter how old or stupid you were." "No, it was ... a chance for quick fame within the bank." "Did you succeed?" "That's for others to judge." "I couldn't say." " At an early stage you were..." "I was promoted very quickly." "And I made more and more money really fast." "Naturally." "Were others faster?" "Yes." "Were a lot of others slower?" "Yes." "We were a whole cohort of people my age." "We sailed right through those banks." "Many of the older co-workers had a lot of skills, but they weren't keen on working with computers." "Whereas we sat there for nights on end, trying to program some Excel spreadsheets." "Calculation models for financial tools ... things like that." "It was an industry." "Like Bill Gates and his fucking garage." "Five years earlier or later, and the man would have become an accountant." "But he was in this bloody garage at the right time." "We happened to be there when computers were brought in." "And we were interested in computers ... and ..." "English books about financial theory." "It was like a gigantic sandbox, where you played with your moulds." "We couldn't mess up anything." "Nowadays a lot can go wrong in the sandbox, but not back then." "It was awesome." "We always came up with something new." "Some weird products." "I once invented oil bonds." "You earned heating oil instead of interest." "The oil price was..." "I'll just give you any old number: $30." "I wrote a whole paper about it." "How they needed to be constructed, how to do the hedge, etc." "Then my boss said to me:" ""Forget about crap like that!" "First there has to be a war in Iraq." "Then the oil price has to skyrocket before anyone will buy that stuff."" "I think that was 4 days before Hussein invaded Kuwait." "I found that quite amusing." "I'll give you a simple example of interest bets." "Lots were sold to municipalities and mid-sized companies." "It's a bet on interest rate changes between the Swiss Franc and the Yen." "And ... it's a position a German municipality has nothing to do with." "No one bets on anything obvious, because you probably wouldn't find anyone to bet against." "But sometimes... the models banks use ... reveal very unusual situations." "It's called a 'Black Swan'." "What is the probability that a black swan will swim by ... at this very moment?" "Extremely low." "The first step is to identify the situation." "Some other things are necessary before you can sell such a product." "You could never sell a construction like this ... to a company like Volkswagen or BMW." "Because they have the same models as the banks." "If they entered these parameters, they'd be on the same side as the bank." "That would be like us betting that the sun will rise tomorrow." "We wouldn't because we both agree it will." "You can only sell a product to a client ... who doesn't have the same opportunities." "The second point, and this is a significant constraint:" "These products make sense for certain clients." "There are clients around the world, who have items in their balance sheets ... that pose a risk." "And I can neutralise this risk with this construction." "It's like buying fire insurance for your home." "The interesting question is:" "Do I take out a fire insurance policy for my own house ... or for my neighbour's house?" "The point is:" "The product only makes sense if it offers me an offsetting item." "Otherwise it's speculation." "Are the clients aware of what they're buying?" "No." "That's the whole scandal." "I don't want that to be recorded, please." "Seriously, right?" "!" "Back to the previous topic." "I reject this simplified notion ... that criminal elements are at work ... figuring out ways to outwit other people." "We're not talking about Albanian shell game players." "We're talking about products." "They make sense." "But if applied incorrectly, they may cause a disaster." "I'll rave about all this some more, and try to clarify how these mechanisms work." "A treasurer has closed a deal." "One week later there's a treasurers congress in Dortmund." "He says:" ""You're really stupid." "Do you know how to clear your municipal balance of deficits?" "Swiss Franc against Yen." "I did it." "I'm up by 3 million."" "That's how it was in the beginning." "Mayor: "Great!"" "Then all the other guys on the table feel like dimwits." "At the same time there's a bankers convention, where derivatives traders are swapping ideas for new products." "One says:" ""I made a killer deal with this one town." "Huge." "Earned 800,000." "One trade."" "The bankers sit there feeling like dimwits, too." "Do I have to explain what's going to happen?" "The more banks offer this product, the more treasurers buy it." "Lemmings." "But that's only human." "It's not treachery or deception." "There may have been cases involving deception." "Those clients are often invited by the bank to speak to other clients." "Everything is closely interwoven." "Again ... would there be charges today if the municipalities had pocketed 30 million instead?" "I doubt it." "My ten years with the second bank were fantastic." "We had a clear adversary, a competitor bank, and it served its purpose." "It was unspoken, but clear to everybody:" "We want ... to do business others have been doing up to now." "And we want to do it better." "For example, imagine there was a long struggle to close a deal with Dow Chemical in the USA to place a ?" "500 million bond on their behalf." "And there's lots of competition." "Nobody knows who's won." "Then you get a call:" "You have to prepare everything in secret." "You have to select certain hedging strategies, and inform your traders that this bond will soon be on the market." "Then you sit there and press a button." "And this deal hits the news headlines worldwide." "Just imagine how angry your competitors would be." "Their bosses demand:" ""Why didn't we get the deal?"" "Then you get the feeling with the touch of a button, you've changed world history." "Then you get an offer from another bank:" "You'll triple your salary and be four times more important." "You can bring your whole family and we'll rent you a house." "It was incredible." "Then you go to your boss and say:" "I like it here just fine but I'm leaving." "Then they put you through the wringer." "He starts explaining everything they have in store for you." "Suddenly where you thought nothing was developing, whole new worlds open up." "Then the other offer is no longer so attractive." "Once I was in one of the company director's office." "I knew him really well and cried my eyes out." "I said:" "Help me." "I have no idea how to get out of this." "I don't know what to do." "I've already accepted." "I'd feel really awkward if I back out." "And I'd feel even worse if I told you I'm leaving." "Do you know what he did?" "He called the other bank." "He said: "Listen, guys:" "That's it." "Leave the man alone."" "Then he told me to drive home, pick up my wife and go away for the night." "Because the telephone wouldn't stop ringing all night." "I thought he was nuts." "But it rang every three minutes all night long." "It was the head hunter worried about losing his commission." "He gets a big one for big earners like me." "Kerviel gambled away almost 5 billion Euros." "He juggled with up to 50 billion." "Allegedly because his bank wanted him to do so." ""The seniors treated me like a prostitute who's supposed to make huge profits." "I had to raise more money for the bank every day."" "Jérôme Kerviel's story didn't convince the judges in Paris." "Accordingly, his prison sentence is long." "His lawyer is baffled." ""The bank has been spared although it formed Kerviel." "In a virtual system of financial products beyond all measure, everything's fine as long as the traders are making profits." "But if they start making losses, the bank sues them."" "The bank is very pleased with the verdict." "Société Générale is satisfied that it has been awarded ... damages for its financial losses." "Kerviel has to pay back 4.9 billion Euros." "Based on his current salary as an IT-consultant, he would have to work about 178,000 years to repay his fine." "To answer the question of why it's always individuals:" "It also has to do with the system." "I think most people overrate the trader's role in the banking system." "He's not a senior manager." "He's like a chief mechanic in a Daimler production line." "Of course, junior and senior traders have different limits." "I can't think of any other profession where one can do such harm." "Think of it as an upside down pyramid." "Those who can cause serious damage are at the bottom." "I hope this comes across okay." "There's the general impression that those people ... are managing directors or have big titles." "No." "A trader is well paid ... but he doesn't have any responsibility." "except for his limited area of work." "They're not managers." "They're laying hens, to put it bluntly." "It's completely normal for a trading desk at a bank – whether they're trading shares, derivatives or fixed-rate securities – a trading desk with 3 or 4 people and an assistant, has the same sales and profits of a mid-sized company with 100 employees." "Try to imagine the pressure these people are under." "I don't share this analogy." "He talks about being treated like a prostitute." "He had to make more and more money every year." "That was my experience, too." "It's always about..." "They don't care what a certain market has to offer." "Whether there have been changes that will temporarily ... or structurally lead to a loss of profit." "Not at all." ""10% more each year." "I don't care how you do it."" ""I don't care how you do it."" "I've heard such sayings." "I read this number in a book:" "Twenty years ago the holding period of shares was 4 years on average." "Today it's 22 seconds." "When you think about it, a share is an interest in a company." "What's the point of keeping an interest for 22 seconds?" "Nobody can explain this to me." "You always try to get closer to the stock market computers." "Because they... it's less than the blink of an eye." "We're talking radioactive decay times between these distances." "Because it's the difference between closing a successful deal and ... being the one who gets the information later." "You probably can't even measure these times." "But being 500 meters closer to the stock market computer centre than the other makes a difference." "Think of it like this:" "Automated computer systems place buy and sell orders to gauge a reaction." "Then they quickly remove these orders." "It's not about trading with assets." "But about finding out how the market has positioned itself." "Are there more buyers or sellers?" "Or worse:" "Is someone trying to steer the market in a certain direction?" "Trade volumes are incredibly large." "It's easy to make a lot of money on tiny price movements." "Let's say you start with only ?" "100,000." "You need a price change of 1% to make ?" "1000." "If you have billions at your disposal, you need only 0.0001 or 0.00001% to make a good profit." "There's a disparity of weapons." "You can see it in these computer systems." "Siemens or Volkswagen are both smarter than a bank." "Then it comes down to mid-sized companies, local governments, and private clients." "There's an old saying on the stock market:" "Private investors always lose." "Sure, sometimes they win." "But it's like roulette." "A roulette player always remembers the ?" "8000 he won yesterday." "But he forgets the 5 x ?" "2000 he lost a week ago." "That's human nature." "Consistently ... making money on the stock market without risk is really tough." "The time of modest share prices is over." "Everyone is going public." "Last year marked another new record:" "194 companies made their debut on the stock market." "Mostly businesses from the Internet, media and computer branches." "Their market rate increased by more than 500%." "Mobilkom head Gerhard Schmidt is beaming." "His company had a successful launch on the 'Neuer Markt'." "Investors made a real bargain ..." "The 'Neuer Markt' is THE high-growth segment in Germany." "An interesting segment for investors willing to take a risk." "Michael, today we want to discuss a topic:" "Women usually wear it on their ring finger or around their necks." "We men have it in our cars." "Platinum." "Very nice." "The platinum price had a turbulent year." "It was a real rollercoaster ride." "What do analysts expect for the next 12 months?" "Conservative estimates are ... $1,700 in 2013 and $1,800 in 2014." "There may be more positive estimates, but those are the general estimates." "A moderate increase in price." "That's still a bit away from the current rate." "So you'd recommend a leveraged product." "Which products have you selected?" "This time we've got a WAVE Unlimited Call." "At the moment it's around $1500 per ounce." "So we've still got some room." "The benefit of this product is its unlimited term." "The investor has some time for the investment to evolve." "Exactly." "It's for more upbeat investors." "We also have WAVE Unlimited Puts for downbeat investors as well." "For more go to xmarkets.de. Thank you very much, Michael." "Have a nice weekend." "I don't have a cosmopolitan background." "I travelled to Munich with my suitcase." "By train." "I can still remember it." "I didn't know anyone there." "All I knew is I started work the next day." "I spoke a bit of English." "Like for domestic use." "It was my only foreign language." "I went down the hallways." "I heard Spanish from one room," "French from the next and a language I didn't know from the third." "I kept walking around thinking:" "I want to be a part of this." "I started reading books." "Books about wine, cigars, clothing, shoes." "At some point you get the idea, and you find a business partner to talk to about it." "My father's a heating engineer." "My very first day on the job I earned more money ... than he did at the end of his career." "From the very first day." "Then I called from Tokyo or New York." "I called my mother." "She couldn't believe I was really there." "You come into the office in the morning, and basically know what lies ahead." "You're taken care of." "You don't have to do anything else." "You drive directly into the underground parking lot." "You climb a few stairs to your workplace." "You don't really need to worry about the outside world." "Your children attend the same kindergarten." "You vacation in the same places." "You go skiing in Gstadt or to the Seychelles or Mauritius." "It's a closed system that leads you further away from reality." "I don't need the outside world anymore." "For the most part." "That's why I don't worry about what I do at work." "If the deals I finalise or the actions I take ... have any kind of effect on the outside world." "This disconnection from social processes is basically institutionalized." "There's no way you can talk about your job during dinner." "If somebody had told me:" ""We're going on holiday with TUI." "It's 200 Euros cheaper."" "I couldn't be bothered with such things." "When you make ?" "100,000 per month, you don't care." "You have no more common interests with your friends." "Unless you force yourself to talk about other things." "But a certain part of your life gets left out ... or it doesn't interest anyone else." "Then you start wondering if ... it would be better to give up some of the things you're fond of for something insecure but maybe better." "A normal person would say:" "If this is what my job's doing to me," "I need a new job, but not a new family." "But with this job I thought:" "The job's okay." "But I need a new relationship that fits it, or whatever you want to call it." "My wife and I had this big discussion after our first child was born." "She wanted me to go on paternity leave." "My employer back then, in the early-90's, would have permitted this." "I always said, "No way."" "My wife said, "You just don't want to."" "There was just no way." "It's a little like I said before." "You know in advance with this profession, if you choose it, then you know what you're getting yourself into." "And there's no room for paternity leave." "Maybe some people do it." "But I couldn't." "I'd have felt like I wasn't living up to ... my own standards for my professional life." "Regardless of whether it was possible to do this." "It's like..." "It's like a virus that gets you." "At the time we're talking about, I was very heavily infected." "You said: "I made the decision."" "Was there ever a 'we'?" "In terms of my family?" "Yes." "Once." "But it was less a 'we' and more my wife saying:" ""If you do that I'm not coming with you."" "What was that about?" "A similar situation:" "A foreign job in a place my wife didn't want to go to." "When I think about ... the golden days I've just been idealising." "Maybe they weren't so ideal." "We tend to glorify the past." "I suffered sometimes, too." "But let's leave it at that." "It's also that ... the more important you become, the more your family becomes integrated into this social context." "Every major bank hosts a family celebration, for example." "Where children and ... spouses and everything that can walk get together during the holiday season." "If you walk down the street behind the Deutsche Bank, there's a day-care centre for Deutsche Bank children only." "They're already being shaped as soon as they can walk." "That was a bit cruel." "But it's very tight-knit." "Then there are the events with clients as well." "I was at an opera festival in London with my wife." "It wasn't a reward for me or my wife." "It was an organised 'get-together' with clients and their wives." "Speaking of absence..." "This was a big issue at peak times." "You have to figure about 280 workdays per annum." "I wasn't home for half of them." "Maybe even more." "We had the appropriate domestic staff." "So my wife didn't get stuck with all the housework." "Still it was..." "I wouldn't quite say my children were strangers to me." "There's always the question of the time you spend with your children." "It's not so much the quantity that counts ... but the amount of quality time you have together." "Spending 6 hours with a small child who keeps jabbering:" "What's the point?" "It depends on how you do it." "This takes us back to the topic:" "Were you a good father or a bad father?" "I can't be the judge." "You'll have to ask others." "I can only talk about what I observed and felt." "But I can't speak for others." "That wouldn't be fair." "The other things you're alluding to ..." "I have no evidence or anecdotes about them." "Really." "Never mind." "That's enough." "That's all I have to say about it." "Finito." "The severe financial and currency crisis in Southeast Asia ... takes centre stage at the summit of Asian states." "The Hong Kong stock exchange suffered its heaviest fall in history." "Asian stock exchanges toppled like dominoes." "Take Bangkok:" "Here hotels and office buildings have been popping up over the last 10 years." "But the building boom was financed with borrowed money." "Most of it from the US and Japan." "Now the lenders want their money back." "They've lost their faith in the booming Southeast Asian region." "Within only a few days the price for rice has risen by 50%." "Cooking oil increased by more than 100%." "The money collapse has led to bankruptcies and increased unemployment." "In a country where 40% of the population is already unemployed." "The IWF reacted with a massive intervention into Indonesian affairs." "Director Michel Camdessus said the task is now  to restore confidence in the currency and the economy." "The government demonstrates it recognises the country's problems." "And it's prepared to take the necessary measures." "Even though they may be difficult and painful." "We didn't think about these things back then." "Countries can – like in Germany – raise money by issuing bonds, treasury notes, etc." "Or they can borrow money abroad." "Under certain circumstances on the 'Euromarket' back then... it was cheaper to borrow money abroad than to raise it domestically." "So they turned to this option." "Countries were considered ... like Portugal or Sweden." "Nobody would have ever doubted their financial standing." "This was long before the introduction of the Euro." "Countries could provide unlimited amounts of their currencies." "Because they could print as much as they wanted to." "We also had constitutional crises and national bankruptcies in the 90's." "South Korea and Argentina." "But ... there was no global meltdown." "No maelstroms leading the rest of the world into the abyss." "Because globalisation and interlacing weren't as tight as today." "In the 90s, everything didn't seem interdependent." "It was more manageable." "You had 4 gears." "If you did this here, then this happened there." "It was easy to understand what would happen." "Today there are 7500 gears." "You don't know what will happen if you turn one." "It was a completely different situation back then." "When I remember how many lawyers I had to deal with in the 90's  and how many lawyers I needed for my last transactions, it's like the factor 10." "The point is that the significance of potential losses ... and pending costs from lawsuits is constantly rising." "I believe:" "If you keep increasing the expected returns ... then the whole business automatically starts shifting ... not into illegality but in that direction." "You see how far you can go." "Then you add a little clause here to make that happen, etc." "And:" "If you do a lot of business, and the business models shift in an illegal direction, then some businesses will fall off the cliff." "People tend to have a fairly naive understanding of all this." "I'll construct a case that happened here in Germany." "A bank plunges into a liquidity crisis and is taken over by another bank." "Most people have this notion that ... these people walk into the bank and liquidate that old business." "It's not that simple." "It's like you're opening a cupboard." "There are 5000 files inside." "Each file contains 1000 pages." "I need to find a particular transaction." "Maybe it's in the 3rd file on the top left." "I definitely want to unwind it." "And now's a good time to do it." "But I don't know if the 2nd file at the bottom left says," "I may not process this transaction between January and March or such." "All these contracts may refer to one another." "Picture a permutation: possibilities that exist mathematically." "They increase exponentially." "I have two options:" "I can hire a lawyer or law firm to read all these contracts." "3-4 years later, after they've waded through 5 million pages, and I've paid a few million in fees, I get a legal opinion saying:" ""It's probably like this, but we assume no liability."" "Or I can read it myself even though I may lack the expertise." "Or I can make a decision in uncertainty." "That's what's happening." "This isn't ..." "You often read about stupid banks, the damn business or how stupid can you be?" "That's what you see in the press in other words." "But it's..." "It's impossible to provide certainty with deals like this." "Impossible." "I have to make a decision in uncertainty." "Then look at the consequences, and try to straighten out things if something goes wrong." "I venture to claim that no one ... understands the accounting of the Deutsche Bank." "There's an auditing company that's familiar with the accounting system." "But no single person can understand how those numbers are generated." "It's too complex." "That's why ..." "It's like I'm demanding transparency about something..." "I can't demand transparency about." "It's like the question about the existence of the God particle." "I don't know if it exists." "Nor do I know how ... every last branch of this industry works." "Nobody does." "Banks have a Plan B for everything." "If an atomic bomb struck Frankfurt, everyone would know what to do:" "Where to go, when it's okay to go home, etc." "But there's no Plan B for this financial crisis." "In the business report from UBS you find an item ... on the subject of accrual contingent liabilities." "It says here:" "UBS makes provisions for proceedings ... when upon legal consultation the executive board concludes ... that such payment is probably obligatory ... and the exact amount can be reliably estimated." "For every probable case here there are explanations." "There's a procedure for municipal bonds." "There's the Lehman Principal Protection Notes." "Securities issued by Lehman." "UBS sold them wrongfully, and is apparently facing a lawsuit now." "Next we have lawsuits related to the sell-off of residential mortgages." "These are the 'junk mortgages' in the US that were sold." "Then come the disclosure requirements." "There's Bernard Maddoff." "A convicted investment swindler UBS worked with." "'Transactions with the City of Milan and public sector entities in Italy.'" "These are municipal swaps, interest bets by municipalities." "Then the HSH bank in Hamburg and Hannover." "They're suing UBS for selling them something they never should have bought." "The Kommunale Wasserwerke Leipzig GmbH." "Puerto Rico." "There's a whole chapter about Libor, which was recently concluded ... through a considerable payment from UBS." "How much was it?" "$1.5 billion." "Something like that." "It's interesting how such things are never restricted to one organisation." "I'd be surprised if there were a scandal concerning ... a product that doesn't affect another company as well." "That would be really strange." "The industry is way too interconnected." "I remember one particular product." "I won't go into detail because it's irrelevant and too complicated." "But my employer at the time made a big fuss about this new product." "We agreed with some experts that this product didn't make any sense." "It was extremely risky, yielded a very small profit and was very costly to produce:" "All the things you don't need." "Eventually we were the last to jump on the bandwagon." "Only because one of the big bosses had read in the newspaper that everyone else was doing it." "So, why weren't we?" "We gave in to a mood of collective panic." "And rushed out a product instead of just leaving it to the others." "We believe ... and we understand this better than everyone else:" "This can't work." "Now we're seeing the results of this development." "This product was created in 2004." "Now, 4-6 years later, it's exploding." "These are the two really bad banks." "The Gesellschaft für Wertmanagement and the Erste Abwicklungsanstalt." "Hypo Real Estate and WestLB." "Here the Restructuring Unit of the Commerzbank." "That's on balance." "Euro Hypo still exists as a normal bank." "It's not necessarily a 'bad' bank." "The HSH Nordbank is a regional state bank." "Apparently it has a balance of ?" "58 billion ... marked as non-performing loans or transaction loans." "The interesting question is where the loss is incurred." "You can add together the Commerzbank and the Euro Hypo." "Government involvement: 25%." "Hypo Real Estate: 100% ." "Erste Abwicklungsanstalt:" "100%." "HSH: 100%." "The only ones who might have to pay ... are the 75% of the remaining Commerzbank shareholders." "And the government." "Along with the taxpayers." "How would I explain this to my kids?" "It's like picking a rotten apple from the fruit basket." "The rotten apple is still there." "You can see if part of it can be salvaged, or if it's completely rotten." "I understand why it has to be like this." "But these decision-making processes happen so fast." "Debates about ?" "100-200 million for culture go on for years." "But 100 or 200 billion for a bank rescue is coughed up over a weekend." "It's possible." "It's quite fascinating." "The pressure is mounting on Angela Merkel." "Greece needs even more money." "If this summit fails to produce a solid plan to combat the debt crisis, the entire euro zone rating will be downgraded." "Threatens rating giant Standard  Poors." "Never before has the finance industry so blatantly held a gun to politicians' heads." "The important thing in Greece ... was to prevent Greece from going bankrupt at all costs." "That's what it was about." "There are two kinds of Greek bonds:" "International or English law bonds and Greek law bonds." "The difference is under Greek law the state can declare:" "You won't get ?" "10,000 for ?" "10,000, but only ?" "4,000." "That's what happened." "Under English law you need to have a meeting of creditors." "They decide whether this settlement is acceptable or not." "So if I, as a hedge fund, buy 75 Million of 100 Million bonds ... then I'll have a qualified majority for the vote." "Then I can tell the Greeks:" ""Either you give us the money ... or we'll blow the whole thing up." "Then technically you'll be bankrupt."" "That's how they operate." "They try to cause you as much trouble as they can." "They use every possible means to enforce their legal right." "Until eventually you say:" ""All this hassle over 20 million?"" "Then you pay and they win." "Greek bonds were a business model." "There were targeted buyouts under International Law." "There's a list of all the Greek bonds out:" "500, 700, 1000 or whatever." "You can search a database and find out which are ... under English law and which under Greek." "You ditch the Greek ones." "Then you have 50, 70 or 100 under English law." "Then you ask:" "How much money do I have and what's the rate?" "Let's say they're quoted at 30% instead of 100%." "And you want to buy 75 million of a total of 100 million." "You need 75% of the voting rights." "You possess 75% of 30 million." "You buy 28 million for the voting rights for a 100 million bond." "That's your profit." "You pay 28 million and force the state to pay out 100 million." "It's worth it." "That's how you do it." "It was a common business model." "Several companies were doing it that way." "So much money is now in circulation ... that you can tackle whole countries with it." "You start with the smallest – Greece." "You wait to see how the EU reacts." "You create a certain..." "How should I put it..." "You crack the ice a bit." "Then you take on the next biggest:" "Portugal." "And the ice cracks some more." "Some people have an interest in the collapse of the Euro." "There's an enormous profit potential there." "Surely some people have a political interest in the Euro collapse." "That's how you'd do it." "I can't think of a good example right now." "You look for the weakest point, crack it, and then break it from inside out." "I was just in Spain." "Things are really dismal there." "Really dismal." "People are really desperate." "Supermarket selections are declining." "Some things just don't work anymore." "When you order a certain amount of construction material – tiles, bricks or whatever – they no longer get delivered." "Because no lorry will go from A to B for a little box of tiles." "And nothing else gets ordered." "This might sound strange ... but the whole social infrastructure is slowly crumbling." "There's no more buying power so no one's trading anymore." "When there's no more trade, transportation declines." "It's like dominoes falling." "If you go there regularly like I do... then you notice each time ... how the country is crumbling." "People are trying to build up some kind of subsistence existence." "Instead of flowers they're now growing potatoes in their gardens." "It's really noticeable." "With countries, you have to find... the origin of the debt problem." "The real estate crisis plunged Spain into the abyss... and was multiplied and reinforced by the banks." "It's a debt crisis in the private sector." "Not in the national budget." "It's a similar situation in the Netherlands." "But no one likes to talk about it." "Just imagine:" "I think 120% of Holland's Gross National Product... is real estate debt." "Only Property." "Private debt." "No one cares about the national debt." "Because private debt goes far beyond... what's considered reasonable for national debt." "If suddenly 30% of the Dutch can no longer pay their mortgages..." "I think it's highly unlikely the bailiff would evict them." "They'll have to find a solution." "Like they're starting to cancel evictions in Spain." "And trying to keep things from getting out of hand." "Or you'll force people onto welfare." "And who wants that?" "What can we expect next?" "France." "France." "They have a severe economic problem." "The essential structural reforms are not being tackled." "I'm not an enemy of taxes." "But they're adopting a fierce fiscal policy." "I think France is going to become a problem." "Then what?" " Then it'll be over and done with." "Game over." "That's why they're desperately trying to prop up Spain or Italy." "It's a chain reaction:" "Greece, Portugal, Spain, Italy." "It's always the next in size." "Then France..." "If France gets into such a situation, no one will be able to bear the burden." "Forget it." "They'll have to come up with something else." "It's going to blow up in our face one day." "Either financially or socio-politically." "There's no way this is going to have a happy end." "Eventually I was laid off." "I've reached an age where the people around me ... are being phased out." "Nobody's working till retirement age." "Usually companies offer a generous settlement." "No bonuses, but you get your salary for another 5 years." "You're lowering the average age." "53, 54, 55." "That's it." "It happens continuously." "People get a better job and leave." "Or get sacked for messing up." "It's another matter when it come in waves." "When they tell you, usually at the end of the year:" ""We're cutting 4000 jobs." "800 here and there."" "So you can figure out which area is concerned." "It's a bit like a front campaign in World War I:" "Let's see who's still in the trenches." "Some people quickly slip off." "Suddenly they're sitting where you can't see them anymore." "Over in the corner somewhere." "It's pretty silly." "But you can't help thinking:" ""When's it my turn?"" "There's more ... fear." "It used to be different." "People were sacked and new ones were hired." "But this kind of... war-like experience... didn't exist back then." "Nowadays it's a management tool... to put pressure on people." "I had a Colombian boss once who said:" "I kick out 10% of my employees each year." "Then you know you've got 10 years tops." "Do you mind talking about this?" "No." "I just don't know why... you're always trying to get more out of me." "I'm telling you as much as I can." "There are no more details to talk about." "I told you, it hurts." "Obviously." "And this process is what it is." "So a family is created that drags you in and captivates you." "But the way you're discharged from this family doesn't ... match the family spirit that was initally presented as a mirror or option." "Yes, that's right." " So this family never really existed." "No." "You believed in a family that ended up chucking you out the backdoor." "Yes, but..." "It's like being a mercenary versus dying for one's fatherland." "There's something for everybody." "I need to feel loved by an institution, if possible." "And ... feel valued." "Then it's even worse when the rug is pulled out from under you." "The mercenary feels no pain." "He doesn't give a damn." "It's a fairly normal cycle." "First there's euphoria." "Then the wave washes you away and you swim and swim." "And sooner or later you have a hangover." "Then I moved heaven and earth to get a new job ... that was similar to or better than the old one." "In retrospect I have to say:" "That was one crucial step too many." "I felt like I'd lost all my dignity." "It didn't have to be like that." "It takes a really long time... to take a critical view of the whole matter." "With most people, even those who've lost their job, their top priority is:" "How do I get the same job again as fast as possible?" "They don't ask themselves:" "Is there some life plan I've always dreamt about?" "And now I can try it out?" "Instead... they continue along the same old path." "This is a problem in an industry that's dramatically shrinking like the banking industry." "I think a lot of mentally affected people ... will fall by the wayside." "Because they're... incapable of leading their own lives outside this system." "Yes." "Why does no one trust banks anymore?" "Some banks say it's because of the crises." "Others say it's the stock markets." "We did something a bit unusual for us." "We looked for the reasons in ourselves and asked:" "Does Germany need another bank that does the same old thing?" "Or do we need a bank that puts an end to speculation on basic foods?" "That finances renewable energy for the future." "That lends money to small and mid-sized companies." "That doesn't reward consultants for selling as many contracts as possible." "But only when their clients are satisfied." "There's a long road ahead of us." "But it also begins with the first step." "I don't think anything's happening within this system." "Everyone's staring at politicians and regulators and saying:" ""Tell us what to do!" Actually they know exactly what's expected of them." "But they're not doing it." "Instead they run ads that state: "We understand"." "Or print some gigantic corporate identity brochures ... and corporate responsibility brochures." "You can observe this, too." "I've been involved in philanthropy." "Corporate social responsibility is an important part of it:" "i.e., the donations and social activities undertaken by companies." "This may knock some people's socks off who know better, but:" "The bigger the shit, the thicker the corporate social responsibility brochures." "Yes." "It's good that measures are being taken." "I think what's being done... within the political decision-making framework is sensible." "But I'm convinced they won't achieve their goal." "They won't achieve their goal." "Laws are passed in 6 months." "?" "150 billion to save a bank is passed in 6 months." "But what people think... reflects the social situation." "It will take decades to change." "No politician can pull that off." "Just look at the semantics used today: 'The markets'." "There's no such thing as 'the markets'." "We act like they're some godlike power descending upon us." "'The Bank' or 'The Company' decided." "No." "People make decisions." "And if you tell them to stop, they'll stop." "You just have to do it the right way." "If the boss of a large investment bank sent out an email tomorrow saying:" ""Every trader who still has shorts in Spain, Portugal or elsewhere, who is speculating against these countries, will be sacked."" "It would end immediately." "Other parties would have to join in as well." "But if the will were there, it would be like pulling the plug." "So why doesn't this happen?" "Because no one ever takes the first step." "Do we need a fresh start?" "Yes, for sure." "But then..." "Either an external shock:" "i.e., political interventions or another crisis." "Or a radical freak who can convince us of a new business model... that works." "Wasn't the recent shock big enough?" "No." "No." "Only simpletons believe the market is capable of learning." "We had that topic:" "Can banks learn?" "It's collective versus individual learning, but the answer is no." "No." "Markets don't learn yet." "Investors don't learn either." "They jump into the same abyss... that they jumped into or were shoved into 2 years ago." "Now they're gladly jumping into it." "There are lots of examples dating back to the 30's." "That's..." "No." "I don't believe in it." "Was the shock big enough?" "Sure, it was a big shock." "Let's get on with it." "Rainer Voss quit his job at his last bank, and is now a man of independent means." "The building was abandoned after the merger of two banks." "It has been empty for 6 years." "Director" "Director of Photography" "Editors" "Music" "Sound Recordist" "Sound Mix" "Commissioning Editors" "Producers" "English translation and subtitles:" "Rick Minnich"