Losses Not Caused By Greed

Former Wall Street trader and behavioral finance expert John Coates argues that recent billion dollar losses at JPMorgan, UBS, and Societe Generale are not necessarily the result of greed, but rather the "winner effect". A winner becomes more confident and seeks more risk after each win. As Coates notes, each billion dollar loss he has examined has come at the hands of a trader who is at the end of a multi-year winning streak.