“Psychopaths Caused the Financial Crisis … And They Will Do It Again and Again Unless They Are Removed From Power”

Ha!!  The truth spreads like a virus!  This post will be “borrowed” from http://www.washingtonsblog.com/.  And you thought I was the only one.  ‘That PW, such an unhealthy fascination with psychopaths.’  ‘Sad really, just sad.’ ‘Indubitably, indubitably.’  I hear your whisperings, I see you looking askance at me when you think I’m not looking.  And you even call me paranoid — gasp!!  . . . But, enough about me . . . read on:

All the following quotes (and the post title) are from http://www.washingtonsblog.com/2012/01/psychopaths-caused-the-financial-crisis-and-they-will-do-it-again-and-again-unless-they-are-removed-from-power.html#comment-27721 [green highlighting added].

Psychopaths Caused the Financial Crisis

The “corporate psychopaths” at the helm of our financial institutions are to blame [for the financial crisis].

Clive R. Boddy, most recently a professor at the Nottingham Business School at Nottingham Trent University, says psychopaths are the 1 percent of “people who, perhaps due to physical factors to do with abnormal brain connectivity and chemistry” lack a “conscience, have few emotions and display an inability to have any feelings, sympathy or empathy for other people.”

. . . . . .

How do people with such obvious personality flaws make it to the top of seemingly successful corporations? Boddy says psychopaths take advantage of the “relative chaotic nature of the modern corporation,” including “rapid change, constant renewal” and high turnover of “key personnel.” Such circumstances allow them to ascend through a combination of “charm” and “charisma,” which makes “their behaviour invisible” and “makes them appear normal and even to be ideal leaders

. . . . . .

Then, according to Boddy’s “Corporate Psychopaths Theory of the Global Financial Crisis,” these men were “able to influence the moral climate of the whole organization” to wield “considerable power.”

Psychopaths Have Different Brain Chemistry from the Rest of Us

In October, we observed:

I noted last year:

Vanderbilt researchers have found that the brains of psychopaths have a dopamine abnormality which creates a drive for rewards at any cost, and causes them to ignore risks.

As PhysOrg writes:

Abnormalities in how the nucleus accumbens, highlighted here, processes dopamine have been found in individuals with psychopathic traits and may be linked to violent, criminal behavior. Credit: Gregory R.Samanez-Larkin and Joshua W. Buckholtz

The brains of psychopaths appear to be wired to keep seeking a reward at any cost, new research from Vanderbilt University finds. The research uncovers the role of the brain’s reward system in psychopathy and opens a new area of study for understanding what drives these individuals.

. . . . . .

Has anyone tested the heads of the too big to fails for this dopamine abnormality?

What are the odds that they have it? And if they have it, what are the odds that they will voluntarily start acting responsibly, especially given the broken incentive system?

Experts also tell us that many politicians also share traits with serial killers. Specifically, the Los Angeles Times noted in 2009:

Using his law enforcement experience and data drawn from the FBI’s behavioral analysis unit, Jim Kouri has collected a series of personality traits common to a couple of professions.

Kouri, who’s a vice president of the National Assn. of Chiefs of Police, has assembled traits such as superficial charm, an exaggerated sense of self-worth, glibness, lying, lack of remorse and manipulation of others.

These traits, Kouri points out in his analysis, are common to psychopathic serial killers.

. . . . . .

Unless We Remove the Psychopaths from Power, They Will Cause More and More Destruction

The inmates are still running the asylum.

Anyone who knows Jamie Dimon, Lloyd Blankfein or the other Wall Street “leaders” can tell you that they haven’t changed a bit since 2008. They are not repentent for their role in the financial crisis. They don’t feel bad that the taxpayers have had to bail them out again and again …

. . . . . .

I noted in October:

As former IMF chief economist Simon Johnson notes, the American finance industry has effectively captured our government in a “quiet coup”, a state of affairs that is at the center of many emerging-market crises, and that recovery will fail unless we break the financial oligarchy that is blocking essential reform.

***

The U.S. has become a kleptocracy, an oligarchy, a banana republic, a socialist or fascist state … which acts without the consent of the governed. There is a malignant symbiotic relationship between the governmental leaders and their cronies, which makes a handful rich at the public trough[.]

From having worked at UBS, PaineWebber, Union Bank of Switzerland (an earlier iteration), Lehman Brothers, Salomon Brothers, Drexel, EF Hutton, I couldn’t agree more.

Let me add that the claim that they brought about this economic collapse/disaster purposely is pure bs — a standard psychopathic canard.  They do this for three mutually supporting reasons:  1) they hate to lose, 2) if they can define a loss as a win it actually becomes a win — here’s their distorted cause and effect reality, their strange view of words, and much else, and 3) they wish to demoralize/undercut/confuse the opposition to prevent effective countermeasures.

Search: “Are bankers sociopathic?”

I assume the searcher is asking about percentages, in other words are investment bankers more often sociopathic than the norm?

Well, it just so happens that I spent over twenty years working for Wall Street firms.  A distant second source of employment were law firms.  From my experience I would say that there seems to be a higher percentage of sociopathic bankers than lawyers, which might seem surprising.

I spent at least a year, either as a permanent or freelance, at E.F. Hutton, PaineWebber, Drexel, Salomon Brothers, Lehman Brothers, Union Bank of Switzerland and UBS (after the merger with the dominant partner Swissbank)I was at Drexel during the go-go years when support (operations) staff were buying cars for cash with their bonuses (I was freelance at the time unfortunately).  I was there at then end when support staff were asked to leave a professionals only why-Drexel-is-closing meeting.  I was at Salomon Brothers on Black Thursday, and later, from a computer room, heard names being called out on the trading floor — those called had a half hour to gather their stuff and leave the premises.

Of these banks I personally knew or knew of sociopaths at E.F. Hutton, Lehman Brothers, PaineWebber and UBS.  I strongly suspected Salomon’s Gutfriend’s wife to be a sociopath but I suppose that doesn’t count.  From news stories, I’m sure some of the Drexel senior bankers and executives were sociopathic but I had no personal contact with them and no entry to their offices.  But if one accepts that one can often recognize sociopathic arrogance and attitude at a glance, as I do, then all Wall Street companies with trading floors have sociopathic employees.

In my opinion, E.F. Hutton was actually a sociopathic enterprise led by the sociopath Bob Fomon (this became obvious about Bob Fomon over time and for many reasons).  Sociopaths of the SAP (socially adept psychopaths) variety, cluster.  As permanent children the world is a daunting place for them — or to put it another way, they are all strangers in a strange land.  They will gravitate towards those SAPs who are more able to navigate the outside world.  Low level, unable to defer gratification, astronomically egotistical sociopaths don’t play well with other sociopaths and “King Sociopaths,” those at the center of sociopathic clusters, seem to often resent interacting with other “King Sociopaths.”  Many people believe sociopaths are loners due to these two reasons, I think, but I believe the majority are not.

And of course, a sociopathic enterprise offers the promise of corruption for all.

Bob Fomon had the self control and ability to defer gratification to be a successful sociopath (in the sense of passing for normal and having a successful career) but he was unable to hire other sociopaths of his caliber.  The sociopaths underneath him could not keep their hands out of the cookie jar however.

Sociopathic stories from Hutton:

  • I recall Bob Fomon having a fondness for teenage female company (of legal age) but he felt he had to claim the relationships were platonic.  I don’t believe he found many believers — sociopaths will try the stupidest explanations, any excuse will do.  When he showed up with a foot in a cast, the jokes went that he must have fallen off that red velvet swing.  And at his age.
  • I knew a high vice president who was rumored to be having a long-running affair with a gay manager underneath him.  When I mentioned this to a young female co-worker she said “No that’s not true.  He merely calls him every morning.”  This same young friend had warned me earlier not to believe any rumors that she was having an affair with the same vice president.  Slow on the uptake, I said, “What!  How do you know that?”  Anyway, when the day came that management wanted the gay manager to leave the employment of Hutton but apparently not wanting to fire him directly, the vice president simply took away not only his office but even his desk.  The deskless manager was forced to wander like a ghost until he quit on his own.  I’m sure it was emotionally devastating for him.  Sociopaths seem to enjoy pulling that emotional rug out from under their lovers when they discard them.  An element involved, I believe, is their resenting having been cast as a emotional partner when they feel no emotions and they decide to show that in the end.
  • The check-kiting scandal that brought down Hutton — just what were they thinking?  Of course that was in the day and age that Wall Street banks relied on their reputation and needed their clients to survive as opposed to trading on their own account against their clients.

Sociopathic stories from UBS:

  • I considered more than one high level officer of my division to be sociopathic.  In addition I have never worked with a higher percentage of children of sociopaths.  The children of sociopaths, almost without exception, are deeply, deeply humiliated (without ever recognizing the sociopathicness of the humiliating parent).  The constellation of traits is actually easy to recognize, though sometimes they internalize the sociopathic humiliator to such an extent that they may be taken for sociopaths themselves.  And, of course, they are very comfortable working with sociopaths (as in, being totally oblivious to it).
  • Under the UBS corporate structure, the regional heads had enormous power.  Many became combinations of screaming babies and lord high potentates.  With outside restrictions removed sociopaths know no restraint.  I’m not saying that they all were sociopathic, but more than one were, in my opinion.
  • The junior bankers were often terrorized by these regional heads and would beg us in NYC to go along and do what their bosses wanted.  I would hear such phrases as “He’ll win anyway don’t fight him“, “He just has to have his own way“.  They knew their bosses were screaming babies but they never drew any conclusions.
  • Some managing directors seemed to be very mild mannered to outsiders but their staffs were utterly terrified of disappointing them.  One sees such manipulation by sociopaths often.  Warren Jeffs comes to mind (http://en.wikipedia.org/wiki/Warren_Jeffs).
  • A pathologically lying sociopath (i.e, a pseudologue, the condition is called pseudologia fantastica) found complete safety at UBS for years.  When he was hired he claimed to have just gotten over both leukemia (seemingly, a cancer hoax favorite) and a kidney transplant.  Five years later he brought in a cake one day, saying it was his fifteenth year of remission from leukemia, apparently having forgotten his earlier story.  When confronted he was smooth as silk, an incredible performance.  However others, including management, still protected him.  He was kind of like a Schmoo, anything you wanted in a friend.  But in reality he was the equivalent of a calculating machine always calculating what his object wanted from him — if, a big if, it suited his purposes.  Like all sociopaths he was a genius at getting others to take care of him and quite a few co-workers were heavily emotionally invested in believing in his Schmoo friendship.
  • I believe this same pseudologue found further safety in the embrace of a male sex-party ring, that included members from all levels of employment, that was rumored to exist (ten years worth of rumors and drunken comments).  Also see Not frat boy behavior, sociopathic behavior.    I don’t care what people do in private, but in a corporate setting and with members of management involved such activity is not a private matter.  I believe this ring helped further this pseudologue’s security (not to mention the possibility of explicit or implicit blackmail) and he branched out into puppetmastery, slander and workplace bullying.  The manager whose responsibilities he essentially co-opted was absolutely unaware of it.  She was his biggest devotee — his word was golden, and she seemingly couldn’t stand to disappoint him.  Uncanny.
  • There was something else worth noting about this pseudologue.  In a sense he became a King Sociopath, i.e., one that other sociopaths clustered about and followed.  As a pseudologue he literally had all the certainty of one who makes up their own facts.  (It seems pseudologues know they are lying, but they seem to think everyone is lying and that there is no “real” reality.)  This certainty carried weight with more childish sociopaths (some of whom were much higher than him in the corporate hierarchy) looking for help in dealing with the non-sociopath world.
  • One time a junior banker (later a managing director) came by, all excited that his young children had included him in a discussion of whether folding toilet paper or bunching it up was a better technique.  This was something he could relate to instantly.  Sociopaths, as part of their arrested development, are endlessly fascinated by bodily functions.   “‘[The Manipulator] loves to walk down the street in pride and certainly, knowing he’s but one moment away from an attack of diarrhea.  This makes him unique among the masses.  The Toxick Magician always views his adversary with his head in the toilet bowl“, http://www.scribd.com/doc/11554313/The-Psychopaths-Bible.
  • I recall a junior banker, with a Harvard degree, who was famous for an occurrence of semi-public sex at one of our corporate holiday parties.  He and a very willing, very drunk partner availed themselves of a stairwell with co-workers peaking in amazement around the corner, as I understand it.  She left soon after, but he was there for years, no doubt thinking it was totally normal behavior.  For more on the sociopath’s lack of need for privacy see Menace to society:  Nushawn Williams should be involuntarily committed as a dangerous psychopath.
  • The holocaust gold history of both Union Bank of Switzerland and Swiss Bank, both historical and modern.

Derivatives are a whole other issue — though perhaps more what the searcher had in mind, rather than the vignettes above.  There is no question that derivatives were hatched by a sociopathic mind or a sociopathic modality mind.  The notion of derivatives (essentially insurance but with no need that the buyer be a stakeholder, i.e., they’re sidebets, pure gambling) is grotesquely irresponsible, ignorant of reality, ignorant of cause and effect, ignorant of what drives economies.  Financing is the tail of the dog, not the dog.  The financial service industry has to serve the greater economy.  Obviously if there were trillions of dollars bet on sporting outcomes, the debts would be unenforceable and laughed at.  However the power players are still demanding that derivative bets be paid off, though the value is greater than the world economy.  This is insane, though not to sociopaths. Derivatives are the economic equivalent of perpetual motion machines, another great sociopathic favorite.  Being permanent children scientific cause and effect are beyond them.

Derivatives and the sociopathic philosophy behind them and the insane notion of a riskfree capitalism have crashed the world economy. See Welcome to our sociopaths-gone-wild economy and Commonalities between Wall Street speculators and/or Fed bankers and sociopaths.

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Ah, so that’s why UBS had us study how to prevent money laundering

UBS Admits To Massive Tax Evasion Scheme

Banking giant UBS has agreed to pay $780 million and turn over once-secret Swiss banking records to settle allegations it conspired to defraud the U.S. government of taxes owed by big clients.

. . .  UBS executives helped U.S. taxpayers open new accounts in the names of sham entities.

Prosecutors contend that UBS executives used encrypted software and other counter-surveillance techniques to prevent anyone from detecting that they were actively marketing such Swiss bank secrecy — and tax evasion — to American taxpayers.

The clients, in turn, filed false tax returns that omitted the income they earned in their Swiss accounts, according to the court papers.

Federal officials said they had pulled aside a veil of secrecy that hid a corrupt international banking practice.

“This was not a mere compliance oversight, but rather a knowing crime motivated by greed and disrespect for the law,” said Alexander Acosta, U.S. attorney for southern Florida.

http://www.dollarsandsense.org/blog/2009/02/ubs-admits-to-massive-tax-evasion.html

In 2006 and 2007 UBS was having everyone brush up on their “‘know your customer’ (KYC) skills and the identification of new trends in suspicious behavior” — even operations staff (on the computer side in my case).  We had to “undertake regular training courses, [. . .] in the form of on-line training” or compliance modules as they were called.  These had absolutely zero to do with our jobs, we never dealt with clients, let alone their money, so we used to call in banker friends to help us with the online tests.  (Above quotes from “Contributing to society, Preventing money laundering, corruption and terrorist financing,” http://www.ubs.com/1/e/about/corporate_responsibility/society/fighting_money_laundering.html.  OOPSIE, that page has been deleted!  OK, here’s another one:  http://www.ubs.com/1/e/polandcareers/ourcultureandvalues/corporate_responsibility/society/fighting_money_laundering.html.  Note that this page is under the heading, Our Culture and Values — one trait of the truly advanced, truly high ranking sociopathic mind is the depth and breadth of its hypocrisy.  Criticizing a sociopath for being hypocritical is like criticizing a fish for swimming — it’s simply their nature.)

It’s apparent now what the strategy was — window dressing.  UBS was putting on a big show of complying with anti-money laundering laws by having all firm personnel be trained in recognizing it — all the while carrying out that very thing through encrypted software and other counter-surveillance techniques (according to the U.S. DOJ).

Now what kind of mind would think a transparent ruse like this would accomplish anything?  Perhaps an arrogant, childish sociopathic mind.  Obviously not every crook is a sociopath.  However, in my opinion, sociopathy is the wind in the sails of evil and corruption.  The normally corrupt are forever fighting their consciences, following the conscienceless, the sociopaths, is a relief to them.

Unfortunately it seems UBS is still the same bank that accepted holocaust gold and sought to deprive the heirs of concentration camp victims their rightful funds.  As late as 1997 bank management thought they could order underlings to destroy Nazi-era banking records.  Fortunately, Christopher Meili, a security guard, turned them in.  (For more information:  “‘Nazi gold’ settlement mixed intangibles with money,” http://www.cnn.com/SPECIALS/views/y/1998/08/hirsch.nazigold.aug21/; Swiss Banks and World War II, http://en.wikipedia.org/wiki/Banking_in_Switzerland.)

Suggesting to a sociopathic banker that accepting gold collected from the teeth of concentration camp victims was wrong or the same to an athlete gaining the top of the podium through fraud would only convince the sociopath that the questioner was the one with the problem.  Their code:  you call it cheating, I call it winning.   If the point was to amass gold, the source, to a sociopath, would be utterly of no concern.

Welcome

Welcome to The Path Whisperer. My aim is to seek stories of possible sociopathy (focusing on sociopathic behavior and thinking patterns) in daily news and current events. Our popular culture is already soaked in sociopathy. The only thing missing is recognition. The only joke in Borat was that he wasn’t joking. There are movies made for adults based on bodily functions. Parents can’t understand their teens’ wildings — sociopathic teens, feeling no need for restraint, have raised the bar, and teens being teens strive to outdo their peers. Millions of parents wonder why a child behaves the way he or she does. The phenomenon of sociopathy is everywhere but the recognition of it is not. I truly believe the world is anxious for this discussion.

Without going into them here, I will also be touching on related matters: the relationship between sociopaths and incest; sociopaths and the rigidly narcissistic and the corrupt; and sociopaths and the phenomenon of the evil couple.

There is also a subcategory (probably) of sociopaths termed pseudologues — pathological and fantastical liars who actually believe what they say, seemingly unaware that there is a real reality out there, confusing reality with the verbal claim of reality. Geniuses at gathering sympathy they often claim a deadly illness miraculously recovered from or lived with. Traveling to the Holy Lands they claim divinity. Seemingly not very common, they do appear in the news from time to time

Finally, two additional points of interest, first, in our economy corporations are essentially given sociopathic freedoms. Not surprisingly sociopaths often then climb to the top. Second, I believe this country could use a political movement that excludes the pathologies of the right (a sociopathic lack of generosity and empathy) and the left (a self-congratulatory rigid narcissisism capable of creating a welfare system that rewards the breakup of the family).

Again welcome. I hope you find this of interest. I try not to hold my opinions dogmatically and see this as a journey towards the truth. Hopefully some of you will wish to add your own comments. I’ll start by organizing past writings and notes and then begin searching the news for items of interest.

[on edit] It seems I should add what I claim to be my alternate credentials for claiming insight into sociopathy (as opposed to the traditional credentials of higher degrees, specific jobs, etc.). There are really three. First, I believe I have a very intimate knowledge of sociopaths and their thinking patterns. I have always gotten along with sociopaths very easily. Back in elementary school slightly odd classmates (who I now recognize as being sociopathic) I hardly knew would make my acquaintance, telling me things and asking me questions, as though I might have some insight into their experiences. To this day sociopaths continue to do this.

Second, my father’s career was in mental health (this career took him to a state commissionership of mental health). So I would say that I grew up with the idea of an almost infinite complexity of the psychological universe.

Third, among other things, I am a professionally trained actor — I studied around 5 years with Bill Hickey and around 3 years with Sandy Dennis. We were taught to respond spontaneously to our instant reading of the emotional vibes of an acting situation (the theatrical buzzword was “organically” as I recall). Much to my surprise this gave me one foot in the world of sociopaths. Sociopaths simply use words for strategic reasons, as a life tool — meanings are another thing entirely. The truth is read behind the words themselves.

In terms of my educational background I have a B.A. in Anthropology from Columbia.  While I don’t think this gave me insight into sociopaths specifically it did give me a non-judgmental ‘people are what they are and do what they do’ approach.  Sociopaths fall into the ‘just are’ category of life.

I’m not sure the above will carry weight with anyone else, but I do believe these factors have helped give me insight into sociopathy.