Shock, denial, defensiveness and finger pointing Lets begin with denial. The first reaction for many in a trading crisis is disbelief or a shock-like reaction. This may significantly slow down the cure and will for certain if there are conflicting stories or lies being told. Many people move from shock to denial that the problem is really happening or there is a tendency to minimize the problem. A good rule of thumb is to multiply the first loss reported by two.
Most people search for rational ways to divide by two.
The next stage is defensiveness. Effort is directed toward covering one's territory to make sure the slings and arrows are directed elsewhere. This of course inhibits the discovery of both the facts and the various problems. Lastly comes finger pointing. Fighting sets in at his point and the ability to get at the real problems is severely hampered.