The fraud triptych: Bad blood, Black Edge and Billion Dollar Whale (2/n)

The second common thread or theme one can pickup while reading these books is that, despite the early disappearance of their moral compass, each of these individuals operated within an environment that either explicitly or implicitly promoted an "any means to an end" mentality. The end of course is money and power (loosely defined) so that of course is definitely less interesting to analyse than the environment they operated in. Luckily for me, the three books provided me with three different types of environment to analyse:

1. Black Edge and the high finance environment: this is by far the most commonly understood environment of the three and probably the one that has spilled the most ink since the GFC (and even before that, starting maybe with Michael Lewis' book Liars Poker). It's no surprise that a phrase like "You are only good as your last trade" ornate traders' desk. I like to say finance is "amoral", meaning it's an environment where morality is non-existent, not to be confused with an immoral environment, requiring self conscious or external actors making a subjective judgement. Moral assessment is either a waste of time or cause for a dual personality diagnostic by a psychiatrist (George Soros for example). Full disclosure, I work in this environment and can share some stories. In 2011, during the Arab spring, I was working as a trader for a London hedge-fund. As violence was starting to erupt, my boss came in and told me to buy as much corn and wheat as I could get my hands on. His reasoning: "war and hungry people make commodity prices go up". That an amoral yet legal action. During the Ukrainian crisis, I saw my boss and another trader discuss one of the leading agricultural companies in the country. The trader, originally from Ukraine, mentioned something about the earnings result of the company, but then both of them decided to take the conversation elsewhere. When they came back from a prolonged coffee break, the instructed us to buy the bonds of the company. A couple of traders questioned the move ahead of the earnings release and we were given some story about "core product" demand. Now, that to me again seems amoral and maybe illegal.
2. Billion Dollar Whale and the political environment: again, a somewhat rather well understood environment which seems to affect any political system both past and present. I don't have much to add about this one.
3. Bad Blood and the innovation environment: to me this is the most fascinating of the three. The two hacker ethos of "better to ship something half done and update it later" and "fake it until you make it" are the two driving forces of this environment. I still haven't thought through the implications and mechanisms but I have one initial comment to make. This type of environment seems to work well when attached to the digital sphere as the capacity to change the product once delivered is high and the actual return on investment of modifying the product post launch is high. The product is obviously not finished when they ship it out either by design ("We have a shipping date we need to adhere to") or by ignorance ("We didn't know this problem would exist"). Think of all those Microsoft update you have to do. The product has a release schedule but it also benefits from the data users create once using the product which can then be translated into a better software. This of course breaks down when you enter the physical sphere as there is both a high cost to modifying the product once it is out in the open and a blunt physical limitation to doing it. Theranos is a prime example of that. But I can think of others, like Tesla for instance.