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Banking's old boys didn't count on the new generation


He's twentysomething. He wears jeans to the office. He doesn't hear you when you talk about the integrity of the institution. He doesn't hear you unless you're talking in cyber-speak (and then he's probably smirking; actually, you're sure he's smirking).

He's your worst nightmare.

Meet 28-year-old rogue trader Nicholas Leeson, that nightmare come to life. He single-handedly brought down the 233-year-old Barings investment bank, a link to the glory that was the British Empire. This isn't just any bank. It's an old-line London investment firm that practically invented capitalism.

The chairman of the bank, Peter Baring, is the great-great-great-grandson of the bank's founder, Sir Francis. These guys have rubbed tweed-covered elbows with royalty for centuries. The queen's got a small starter account there herself.

And this kid (he's always described as the 28-year-old rogue trader) casually gambled $29 billion of the bank's money on some investment scheme he and his computer thought up.

He lost 1 billion. And one bank, which, after two centuries, is no more.

You can see the old boys in their London clubs gripping their walking sticks and choking on their cigars. Their world is ending. It's a world that goes back some, too.

Barings financed the Louisiana Purchase, meaning that without the bank's money, if you were fly to the west coast today, you'd be going to Kentucky. Barings financed the Napoleonic wars.

And who brought this hoary institution down?

A 28-year-old rogue trader who grew up in a housing project. Who failed his A-level math exam (that's like our SATs). Who did not go to the right school. Who started as a clerk, for God's sake. Has the world gone mad?

Wait, I hear you. The guy in Orange County was of middle years. When Michael Milken or Ivan Boesky threatened the integrity of Wall Street, nobody brought up their ages.

You know why. This isn't about money. It's about us.

This new generation -- they're either slackers or they're whizzes and, in either case, they listen to the wrong kind of rock and roll -- scares us senseless.

We think they think we're irrelevant. The problem is, secretly, we're afraid they might be right. We live in a time where 8-year-olds master computers and we can't even figure out how to program the VCR.

At Barings, the old family relied on 28-year-olds -- even some from the lower classes -- to figure out how to make their money. You saw what happened. If these kids bet $29 billion on something called derivatives, it's just another computer game, like Mortal Kombat. Let the blood splatter where it may.

But if you look at the 28-year-old rogue trader a little more closely, you find something a little different.

He's scary all right -- but scary in the old way. Leeson is, in a sense, right out of "The Man Who Would Be King," -- a movie about two British army types in India out to make their fortune.

A younger Michael Caine could play Leeson in the movie.

It's a familiar story of the Brit who makes his way to some outpost of the Empire, described best in Graham Greene novels, looking for adventure. Leeson went to Singapore to seek his fortune. And if he lost, by God, well, why not lose well?

Leeson lost wonderfully, magnificently.

This is not some nerd who sat in front of his computer. He sat in bars. Sometimes, he stood, and, if he'd drunk too much, he'd drop his pants. Leeson lived in a fancy condo. Drove a fancy car. Bought a fancy yacht.

And when things went bad, he fled Singapore (if there's nothing else we know about Singapore, it's that you don't want to get near that caning guy) in a hired white Mercedes and took off for Kuala Lumpur, where he and his wife checked into a five-star hotel. He sent his resignation by, of course, fax.

Eventually, he flew back to Europe on Royal Brunei airlines. You could see Leeson at the counter saying those words we all dream of: "Get me the next plane out of here. I don't care where it's going."

The plane landed in Germany. The cops were waiting -- although it's still not clear he broke any laws. When the 28-year-old rogue trader was detained, he was wearing jeans and a baseball cap and carrying a book bag.

Scary as hell.

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