A Bob Rubin trade is the equivalent of picking pennies in front of a steamroller, except the one making the trade receives the pennies while a third party gets to sit in front of the steamroller.
Heads, I win. Tails, you lose.
The term was coined by Nassim Taleb when describing how hidden risks were transferred from the banking system to the public when the government was forced to bail out the banking system In 2008. Up until then, bankers had enjoyed the rents from the trade with what turned out to be a limited downside.
Robert Rubin is a former Secretary of the United States Treasury. He collected more than $120 million in compensation from Citibank in the decade preceding the Crash of 2009.
Books by Nassim Taleb
- Antifragile: Things That Gain from Disorder
- Black Swan: The Impact of the Highly Improbable
- Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets