After the last post I received a bunch of responses along the lines of “why are you so bitter about finance?” and initially taken aback, I looked back at the content of the last few posts.
Oh. I see.
There is one point – good news makes boring copy. If I had written “the saints of finance” instead of “Scumbag Storytime” the page hits would have been cut by 75%. That said, I now accept that I might have a bit of an animosity problem where the industry is concerned.
Autobiography is a form of narcissism so I won’t try your patience here. It is important, however, to note that my rise in the ranks of finance coincided with a crawl from a deep, dark personal hole. Particularly in the early stages, every promotion was not just a matter of personal finances but existential validation. I viewed the trading floor the way an undersized Division III football player views the NFL. As an outlook this was twisted and sad, sure, but an accurate depiction.
When through luck and diligence the break finally came – a peripheral job on trading floor – I was not yet a lot stronger in the broken places. But I do remember vividly, half-terrified in my department store suit, swearing that the only way I was leaving that chair was on a stretcher. I would work the hours, stammer through the humiliating process of learning how to give a presentation, kiss whatever ass was shiniest at any given moment. I would pay the ask.
Nothing in life is as good or bad as expected so the process of my disillusionment was inevitable. The heroes, and there were a number, were too often pushed aside in favor of the shadiest sales guy elevated by commissions from PMs who would wind up in jail or in Israel to avoid extradition. The details are cliché by now.
To quote one of the funniest monologues in movie history “the details of my life are inconsequential.” The interesting point now is whether, as the details ooze out, the broader culture is undergoing the same process of de-rating the importance and status of the finance industry.
Look at Jack Welch, so stunned by his fall on the Fawn-o-meter that he only leaves his underground lair for the cozy embrace of Joe Kernan. Rubin, Dimon, Steve Cohen, all fighting off the steady assault of Lilliputians pulling on their $3000 pant legs to drag them off their pedestals.
Much is made, correctly, of the public financial costs of TBTF. Before 2007, I suspect that part of the reason this was tolerated was the misguided belief that finance worked for the greater good, that when your broker or I-banker said they were working in your best interests they at least intended to do so.
In my experience, the vast majority of individuals in finance do try to help their clients although the process of rationalizing takes up steadily more brainpower as time goes on. But the vast majority of the money is controlled by a small percentage of finance employees. A significant percentage of this daily-commute-by-helicopter crowd must constantly, like the London Whale’s boss of the jackasses laundering al-Quaeda money at HSBC, hide what they’re doing and hedge themselves with pitchfork-proof vests.
As to the question as to whether finance is beginning a steady decline in cultural and economic importance in the same way many predict for the concussion-ridden NFL, I’m clearly biased. Odds are that if you’re reading this, you are part of the financial industry which suggests that so are you. So, let’s phrase things objectively in terms we all understand:
The finance industry is currently about 8% of GDP. If I offer to sell you a 2035 call option on this number with a strike of 6.0%, are you buying?