L'Arrogance: The High-Finance Scent That Never Goes Out of Fashion

By now, unless you've been under one of those proverbial rocks, you've heard about the massive, pending insider-trading charges, a story apparently broken by the Wall Street Journal:

Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders and analysts across the nation, according to people familiar with the matter.

The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say.

Admittedly, I'm a guy sometimes entranced by small detail, so I found this bit of the article most curious, an e-mail sent by a John Kinnucan, a principal (or analyst) at a firm called Broadband Research LLC (and former portfolio manager at Crabbe Huson Special Fund, so his high-finance bona fides are legit):

Today two fresh faced eager beavers from the FBI showed up unannounced (obviously) on my doorstep thoroughly convinced that my clients have been trading on copious inside information," the email said. "(They obviously have been recording my cell phone conversations for quite some time, with what motivation I have no idea.) We obviously beg to differ, so have therefore declined the young gentleman's gracious offer to wear a wire and therefore ensnare you in their devious web.

My first reaction was: Wow. You could build a whole psychology class around the tone of this e-mail. If you were enterprising, you could even bottle it into a scent to be sold to financiers.

"Obviously," the first thing you notice is how effortlessly the writer captures a breezy arrogance. There's a strong grace note of condescension, as if a visit from a couple of FBI agents is to be treated with the same disdain as the appearance on one's doorstep of a pair of vacuum cleaner salesmen. A sniggering-up-the-sleeve quality ("ah yes, these bumbling little investigator types!"). Self-importance. High-brow sarcasm. Haughty disdain for the rule of law. Megalomania.

Where have we seen this before?

Oh yeah. Throughout the whole damn financial crisis.

Banks ungrateful for being bailed out (remember it made headlines when a few bailed-out CEOs actually managed to say "Thank you, America," in testimony a good year after the meltdown). Banks riding the Bernanke liquidity wave to enormous profits and, with little sense of irony, declaring themselves master surfers and paying out lavish bonuses for their "skill." Indignant workers at AIG Financial Products who couldn't believe anyone would try to reduce their fat bonuses even though their division cratered the damn company. Lord Blankfein telling us that Goldman Sachs is doing "God's work."

Plus ca change, plus c'est la meme chose.