So consider all those swaggering hedge fund managers and Wall Street proprietary traders who recorded paper gains on their credit insurance bets as the prices of Bear and Countrywide bonds fell.
"I love finding a great man's-style watch, with lots of features and a big dial it makes me feel like a master of the universe," says a trader at one Wall Street proprietary trading desk.
Goldman Sachs, Salomon and Bear Stearns are the three best-known proprietary traders on Wall Street.
Alternatively, some suggest that if the U.S. institutes a strict version of the Volcker Rule — which would prevent profitable but risky proprietary trading — then Wall Street institutions would high-tail it across the pond.
Many on Wall Street consider proprietary trading, or prop trading, to involve only trades made by dedicated traders who are using the bank's capital and do not have access to client information.
A separation between Morgan Stanley and Mr. Muller has been in discussions for years, but talks accelerated in the wake of the passage in July of the Dodd-Frank Act, which restricts proprietary trading by Wall Street firms.
Incredibly, despite the events of last fall, nearly every one of Wall Street's proprietary trading desks can still take huge risks and then, if they get into trouble, head to the Federal Reserve for short-term rescue financing.
His most visible contribution to the current regulatory overhaul effort is what has come to be known as the Volcker rule, which in its initial form would have banned commercial banks from engaging in what Wall Street calls proprietary trading -- that is, risking their own funds to speculate on potentially volatile products like mortgage-backed securities and credit-default swaps.
The institutional barriers are high for those without the sacred sheepskin .I don't think they [noncollege grads] can get in the door," admits Thomas Gallagher, 54, head of proprietary trading at Wall Street's CIBC Oppenheimer.
Meanwhile, Billyboy's [Bernanke's] trick box of liquidity extensions, guarantees, and purchases of garbage securities have done very little to help the ordinary American wage earner and done a lot to allow Wall Street's proprietary trading desks to make lots of money gaming the system".
