Finance Is Depraved

Many years ago, when I first got on Facebook around 2008, one of the first things I did was to look up Nassim Taleb. At the time, he was my hero. And sure enough, he had a Facebook group. It was small but growing. But in the instructions off to the side of the page, it said: No posting about finance. Finance is depraved.

What the fuck? Fuck that guy. I took it personally. I suspect that “fuck that guy” has been written more about Nassim than any other person. Why would he say that finance is an ignoble profession? Wasn’t he a trader? Aren’t his books about risk?

14 years later, I get it. Finance is depraved.

The Kirkus review of my memoir Street Freak described Lehman as a bunch of “selfish, scrambling men.”  I took that personally, too. After a decade, I get it. In my mind’s eye, I can put myself on the trading floor with those primates and I can just see them scrambling to get money. And people were not always virtuous. I’m not talking about the cocaine, I’m talking about stealing people’s accounts and backstabbing, in subtle and unsubtle ways. Or paying yourself a lot so someone else gets a little. Imagine a video of a bank trading floor turned up to 2.0x speed and dubbing the seagulls from Finding Nemo yelling mine mine mine over it. That’s what I picture when I picture a trading floor. Especially an open-outcry trading floor, where people really were scrambling over each other for an order. Oftentimes, the best traders in the futures pits in Chicago were physically large guys.

As for the selfishness, it is true that it is very difficult to be an altruist on Wall Street. But there are examples of it. You might give a penny to a customer to maintain the relationship. You might move up your bid on an EFP to help out your broker. There are occasional examples of where people do uneconomic things to help each other out, or because they like each other. There are also psychopaths, including the guy who parachuted in one day to sell me 250,000 XLE at the precise moment that ExxonMobil did a secondary. After a while, like a cop in his third year of service, you start to think that everyone is a turd, and that human nature is vicious and malevolent. You begin to have a pretty depressing outlook on the world, and that spreads into your personal life, which is filled with fear and paranoia. Everybody fucking sucks.

No discussion on the ethics of Wall Street would be complete without a discussion of Ayn Rand, although I get the impression that most people on Wall Street have never read Ayn Rand. I read her in college and became a disciple, which I suspect is a fairly common experience. I found her completely by accident—walked into a Waldenbooks one day as a cadet and saw a book called The Virtue of Selfishness. Well, that’s interesting, I thought, and bought the book sight unseen. Then I went deeper and deeper. In my thirties I moved away from it, mostly because I thought the writing was terrible (it is), but also because I began to learn that by helping other people, I was helping me. I do that to this day, mostly in my writing. I think that the worlds needs a mix of selfishness and altruism, and I think it can be compartmentalized—you can be selfish (to a point) in your professional life and generous in your personal life. I do scramble from time to time. I chase subscription dollars, though not too hard, because I operate under a marketing philosophy of attraction rather than promotion. But I will tell you this: if I had the ability to stop scrambling, and start creating and giving, I would do that in a second.

I will let you in on a secret. I have made a very good living writing about money, but that’s not what I want to be remembered for. There is that saying that people remember how you made them feel. I want people to remember how I made them feel. I want to be remembered as an artist. Did I uplift their spirits, even for an hour? Did I change the way they feel? Did I touch their soul? All artists have the ability to do this. I want to create. Trading in the secondary markets is not a creative endeavor. Much of finance is a zero-sum game. I win, you lose. Equities aren’t, but they are in the micro-term. What did I do for the seven years that I was at Lehman? I provided liquidity. I helped super-rich people execute trades at a price that was fractionally better than my competitors. I was a snail cleaning the fish tank of the markets. Seven years at that place without a lot to show for it, except for a lot of memories, and I’ve spent the last fourteen years working on not being an asshole. It’s progress, not perfection.

The markets are a neurotic place, and I’ve spent the last 14 years chronicling those neuroses in my newsletter. People think that the markets lurch back and forth between greed and fear, but really, it’s all fear: fear that you won’t get something you want, and fear that you’ll lose something you’ve already got. I write about it, and it’s a fucked-up job. Except the market is a patient that never gets better. It’s like I’m the therapist, and I hear the same shit over and over again every week. It would be tough being a therapist. It’s tough being me.

Finance is ugly. One thing I’ve always found interesting about the hedge fund world is that many of these guys are avid art collectors. But I don’t get the impression that many of them know much about art. In order to appreciate the art, you have to understand the history and context. I think the art collecting is all about dick-measuring. And then they hang this art in their hedge fund offices and the philistines that work there walk by it every day without ever stopping to appreciate it. It’s ridiculous. And the dick-measuring has totally fucked up the economics of the art world. And the public can’t see it if it’s in the lobby of Grand Theft Auto, LLC. It’s bad clothes, bad music (which we’ve talked about before) and bad taste all around. Dick Fuld was an avid art collector, or at least, his wife Kathy was. It reminds me of that line from A Fish Called Wanda. “Apes don’t read philosophy,” Otto says. Wanda replies, “Yes they do, they just don’t understand it.”

Now I will be the first to admit that this grotesque monstrosity that is responsible for capital formation is necessary for a growing, vibrant economy. But nobody really wants to see how the sausage is made. 70% of USDA chicken inspectors no longer eat chicken. I don’t even like the business world very much, with its legal entities and contracts and noncompetes and restrictive covenants. I don’t want to have anything to do with it. Just put me in a position where I can write and create and I am left alone to think and dream. Someone else manages it, and I take a piece. No, I do not have the most successful financial newsletter in the world. But I am one of the most successful writers in the world. I’m guessing I’m in the top 100.

A couple of years ago, I met my friend Gordon at the Hudson Hotel for drinks. Gordon is 6-foot-9, so he was sitting at the bar, and I was standing, and we were the same height. I was pitching him on getting a subscription for his firm. He said, well, why don’t you put together a slide deck with your good calls and your bad calls and your rate of return, and throw some charts in there, and we can present it. And I just gave him a blank stare. He looks at me and says, “You’re an artist, aren’t you.”  And that was the moment I realized it. That was the moment that I realized that I left Wall Street behind years ago. The suits, the stupid ties, the $40 lunches, all of it. At that moment, I  was closer to Jackson Pollock than I was to Stan Druckenmiller.

And from that moment on, I’ve been owning it. Because Taleb was right—finance is depraved. And my curse is that it’s all people want to talk about with me, and I never want to talk about it. Over any rolling ten-year period, I’ve never known what I was going to be doing ten years hence. And my uncertainty is greater than ever.

Go fuck yourself,

Jared

Music recommendation: Einmusik & Jonas Saalbach (Live) at Teufelsberg, Berlin.

Two of my favorite producers climb an old, abandoned East German spy tower, haul all their equipment up there, and lay down the most incredible progressive house set of all time—in the middle of winter. One of the greatest things I have ever seen.

P.S. We’re Gonna Get Those Bastards will always be free. Please forward to whoever you like.