MonkeyBusinessBlog: This Is The Business of Small Men

A quick post on the fabulous business of "High Finance". I'm sitting here around 9pm eastern time and my little hedge fund has to unwind a little Australian Dollar interest rate swap. Unwind means that I have the trade on with with one of the f**king thieves that make markets in this crap and I want to end it. It's pretty simple...just a series of future cash flows that have to be discounted back to "present value". No rocket science if you are in this business....and even if your not, I could probably teach most of you how to do it in an hour or two.

Anyway, I have this little interest rate swap that I put into my model, which is the same as everybody else's model. I know I have to pay these bastards and I figure that they are going to charge me the full bid/offer. What am I gonna do right? It's not like we are BlackRock. So I run it and it shows that I have to pay 6,300 Aussie Dollars. Then the following "Bloomberg" instant messaging sequence takes place.

Me: "What say you young man?"

Trader in Sydney: "7,900"

Me: "7,900? What rate are you using?"

Trader: "5.70"

Me: "Yeah, me too and I see 6,300"

Trader: "Agreed."

Me: "Agreed? What happened to 7,900? Where did that come from?"

Trader: "Oh, hah hah....I'll send a ticket."

And this is how it goes. This is what hundreds of people get up and do every day. They spend their days looking to pick off somebody who either isn't paying attention, or isn't very bright....or in our case, small guys without a ton of leverage. This is what finance either has become or always has been, a bunch of guys running around trying to find a sucker. It starts with petty bullsh*t like this mope's 1,600 Australian Dollars that he was trying to clip me for (and he was already making about 2,000 for doing....nothing) and eventually you graduate to putting municipalities into financing and "hedging" instruments that they don't understand (or they do and they're getting paid off not to notice) and clipping them for hundreds of millions. It's learned behavior.

Ahh, I feel better now. What's really funny is, that little prick might actually read this blog!