The UBS Story: Ignorance or Apathy?

Kweku Adoboli was arrested today for fraud as a result of making unauthorized trades during his time at UBS. Oh, and by the way, he lost the firm about $2 billion. You could buy the Empire State Building with that type of money. You could buy a major league baseball team with that kind of money- twice. So my question is, how is a lowly trader able to get past the security systems of one of the largest investment banks in the entire world and screw around with company money? I mean the head of investment banking at UBS, Carsten Kenteger, didn't get almost $15 million last year for improving his golf swing and chatting up prospective clients, right? I figured that after the Lehman/Bear Stearns debacle, there might be some sort of increased level of security. Maybe I was just being foolish. After all, the execs are still going to have their apartments on Park and their houses in Amagansett, regardless of whether their bank goes belly up. Even in the case of Lehman's Richard Fuld, whose $1 billion fortune dwindled to a fraction of that following his company's implosion, was able to scrape together nearly $40 million from selling personal affects. Don't get me wrong, Fuld lost essentially everything he had made over the course of his time at Lehman, but it's not exactly like he had to freeze his butt off waiting outside the soup kitchen afterwards either. It's a little bit disheartening, in my opinion, that the reality may be that executives have a infinitesimal amount of concern for the welfare of their companies, as they will always have their comfortable nest egg upon which to rest their heads.

College: Not For Nothing

In May, Peter Thiel- the venture capitalist known for his home runs with Paypal and Facebook- proposed a novel idea to the young entrepreneurs of the world. Instead of taking their talents to Wharton, Harvard, Stanford etc., Thiel is offering twenty (?lucky?) college students the opportunity to bypass college by giving them each $100,000 to start their own businesses. Thiel, himself a Stanford grad, thinks that the conventional idea of attending a university is unnecessary for those who have the talents to establish themselves in the world. He's speaking up against the rising costs of colleges and the debt that accumulates as a result of these steep tuitions.

In a world where it seems like the only people who can afford college tuition have already made their millions on Wall Street or in Silicon Valley, Thiel's idea seems like a lifesaver for those types who don't have the $200,000 or so necessary to enroll in a top tier entrepreneurial program. His announcement is relatively timely since the general consensus is that the next big business of the future is in venture capitalism and start-up firms. Media such as "The Social Network" have only reinforced the passion to move out to Cali, come up with a "revolutionary, never before seen" idea, and make big bucks ala EBay, Facebook, Amazon, and the like.

If you really think about what Thiel is proposing, it sounds a little like a scheme of "get rich or go home." Sure, it's pretty cool if you make the next Facebook or Zynga, but that's like winning the lottery (against a bunch of Stanford/Harvard MBA/engineering types) Good luck. It's nice to help kids start up their own companies and all, but when you get to Palo Alto or San Jose and realize that starting up a company doesn't just revolve around partying and rope swinging into a pool, it's quite a reality check. When your first or second (or third) business goes belly up and you find out that people might not necessarily want to buy Frisbees over the Internet, what now? What happens when you decide you don't exactly want to be a big shot tech entrepreneur anymore, Mr. Thiel? What happens when you're 22 and the only things you have to your name are a Vespa and a bunch of unsold Frisbees in your garage? From that vantage point, maybe college might be a nice safety net in case that whole billion-in3-years thing doesn't work out too well. Maybe having a degree will at least give you a start. College gives you guaranteed connections, something that can't be said for those in the Silicon Valley frontier. For those of us who want to have a cushion to lean back on that doesn't involve working at Wendy's for the next 35 years, maybe an education might be a decent idea. Just some food for thought.