TRYING TO DETER PEOPLE WHO’VE MOVED ON. Surowiecki points out some of the practical problems with trying to punish the reckless. He points out that the executives have often retired with their bonuses. He could have added that by the time the decision is made on whether to rescue an institution like Bear Stearns or Lehman Brothers, many of the shareholders at the time the mistakes were made have moved on, even if they have had to swallow losses. The shareholders who remain are often making a bet on what the government is going to do. Executives and traders who lost money will often be able to get new opportunities to trade. The Wall Street Journal had an article on February 6 about a brilliant trader whose group lost $1.8 billion for Deutsche Bank last year. He specialized in gaps in pricing between various securities of a single companies, and had had great success in the last seven years. He is now leaving the bank to start his own hedge fund and already has commitments for the new fund from several investors.

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