His twitter profile says that he's an "Experienced stock market and forex trader. Keynote speaker on share trading. Mentor and dedicated to helping others succeed", while his online blog reveals he's "had the privilege of learning from some of the world's greatest traders".
So while debate continues about his qualifications to speak about the markets and his authenticity, I thought it might now be a fitting time to talk to some local brokers about how they feel about Rastani's comments and the nature of trading.
Ken Teale, an investment analyst at Barwon Investments told me in an email, “The mere fact that a single interview like this gets so much attention, just shows how much fear there is in markets at the moment about a potential collapse of the European banking system.”
Unsurprisingly, many, a lot in fact, didn't want to comment directly about Rastani's upfront and personal observations.
But like one broker told me, if Rastani was a real trader, then it's his job to make money and if he is short, then of course he wants the world to go into full blown recession.
There's nothing wrong with shorting the markets. To simply put it, a short is a strategy to profit from a falling market. It's legal.
It seems though what is morally bankrupt, is to say that you want a falling market and don't care about the social consequences as Rastani put it.
In another email, Chris Weston from IG Markets told me, “It totally depends on the individual though. I mean if I am short of course you want the market to go down but I don't want to see everyday people suffer. If you are a good trader then it does really matter what happens out there, you should be able to implement a strategy to suit.”
Is Rastani crazy to publically reveal his true feelings, or is he just a crazy trader?
It's been reported in the international financial media overnight that a small study done by two MBA students at the University of St. Gallen in Switzerland recently showed that stock market traders display similarities to certified psychopaths.
It was only a small sample, but according to the their thesis traders were fixated on gaining more than their competitors in a computer simulation they devised, to the extent that they spent a lot of energy trying to damage their opponents, than the selected hospitalised psychopaths did.
Make of that as you will, but I've got quite a few trader mates, and I'm pretty sure I'd be able to share a bed with them in confidence that I wouldn't be attacked.
As for Rastani's comments that it's not governments that rule the world, Ken Teale says that may have some merit. “It should be pretty clear to people that it is in fact bond markets and equity markets which are driving government policy in relation to the Eurozone crisis rather than the other way around. The only reason that bailouts have been instituted for Greece, Portugal and Ireland is because bond markets won't buy the debt issued by their government or are demanding yields on that debt which would soon send those countries bankrupt. If governments did rule the world, Greece, Portugal and Ireland would still be able to issue debt at rates similar to what Germany can, because markets would believe Eurozone politicians statements that they wouldn't allow members to default. Clearly this is not the case.”
But Rastani's warning of Armageddon doesn't sit well with everyone, and Chris Weston believes the worse things get, the closer to a solution we'll be. “Whilst there are clear risks out there and the market has not discounted a worst case scenario I feel the worse things get the closer we will get to a solution; fiscal unity, a Eurobond.”
If anything, the Rastani interview is another good lesson for journalists too, whether he is an authorised speaker or not as Ken Teale puts it, “It's also quite clear that if this is not a hoax, this trader is short European equities and thus he is probably talking his own book, adding to the fear that is prevalent in the market is only going to help his position and a respected media outlet like the BBC is a great forum to do so.”
Mental note: cross check a trader's history, investment strategy and portfolio before any interview.
