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"The Trading Game"
Mar. 17th, 2026 11:33 pmGary Stevenson
* From the 42nd floor of the Citibank Center, you cannot see East London. You can only see the 42nd floor of the HSBC Tower. The ambitious young children of East London look up to the skyscrapers that cast shadows on their houses, but the skyscrapers don’t look back. They look at each other. <> This is the story of how I, of all the kids playing football and selling sweets in those shadows, got a job on the Citibank trading floor. It’s a story of how I became Citibank’s most profitable trader, in the whole world, and it’s a story about why, after all of that, I quit.
There is no way to get a job without an internship, unless you’ve got contacts, and the only time to get an internship is now. If you don’t get an internship after second year, you’ll have to get an internship after third year. After your internship, 50 percent of interns will get an offer of a full-time job a full year later, so if you interned after third year, you’d be facing a full year of unemployment. But really, that’s just theoretical, because no investment bank is going to hire an intern at the end of their third year—they’ll know everyone rejected you in second year, and nobody’s going to want a rejected intern.
It’s called “The Trading Game,” but it’s basically a maths game. If you win it, you can get invited to the national final, and if you win that you get an internship. I heard you’re pretty good at maths. You should go.” <> I had never met Luke before, but he sat down next to me, told me the date and time of the competition, and briefly explained to me the rules of the game.
* A confidence seemed to snake off of him, like smoke from a candle, flowing into the room. There was a kind of thick, sticky darkness to it, but also a sharp, shiny brightness, like treacle inside a glass jar, and alongside it that huge, never-ending, pearly white smile. Something about that dark, sticky confidence transported me back home again, to Ilford. To the cool kids at school turned drug dealers making £10 into £100 by selling bags. But there was a depth there that I’d not seen in Ilford. Something that I’d started to see at LSE. The confidence of a man who wins, not just today, but tomorrow.
It ran using a special deck of seventeen numbered cards: some higher, some lower. In case you ever want to play it yourself, the full deck of cards was a -10, a 20, and all the numbers 1 through 15. Each player is dealt their own card, which they could look at, and then another three cards are placed, face down, in the center of the table. The game works by players essentially making bets against each other on what will be the total numerical value of the eight cards in the game (each of five players has one card, plus the three in the middle). <> Conceptually, you can think of it like this: you are all buying and selling some asset and the total value of that asset is the sum of the cards in the game. You only have certain information (your own card); more information (the cards in the middle) is revealed as the game goes on. If you have a high card, say the 15, or the 20, then that gives you inside information that the total will probably be quite high
you don’t want to tell the trader that you want to buy before you actually get the chance to buy. To avoid this, you say “Hi, give me a price on ten million pounds.” <> When you say this, the trader (in theory) won’t know whether you want to buy or sell. The convention then is that he has to give you two prices—one at which you can buy and one at which you can sell.
Citibank’s Trading Game functioned in the same way. Any player could ask any other player at any time “what’s your price?”; the other player would have to provide a two-way price with a spread (between the buy price and the sell price) of 2.
Imagine one guy on your table has the 20, and he starts right away quoting 67–69 (remember, his expectation is 68). Another guy has the -10, and he starts quoting 50–52. What do you do? <> Well first of all, you know right away that one guy has the -10 and another guy has the 20. They’ve revealed to you exactly their cards with the first words that they’ve spoken. But that isn’t even the point here. The point is, that you can go to the 50–52 guy, and bet that the total will be higher than 52. Then you can turn to the 67–69 guy, and bet that the total will be lower than 67. Buy at 52; sell at 67. Those two bets cancel out immediately, and you make a profit of 15. That happens regardless of what the actual total of the game is, a completely risk-free profit of 15.
While they were working out their expected values, I was just chucking points into the bag.
Now this game was only a maths game, but it does tell you a few things about markets:
1. Individual traders don’t set the price. Just because you think something is worth 60, you don’t offer to buy it at 59 if everyone else is selling it at 50. If other people are selling it at 50, the highest you should possibly quote is 50–52. There is no point offering to buy at 51 if someone is out there selling at 50. This shows something interesting about markets, which is that an individual trader shouldn’t quote what they think something is worth, but rather what everyone else thinks is the price.
2. Because of this, if you ask ten different traders for a price, you shouldn’t get ten different prices: they should all converge on a similar price. This will be true even if the ten different traders have totally different views about what the price should actually be.
The Jubilee Line trains had a totally different sound to the ones that ran past my bed every morning. They make a spiraling, whirring, ascending sound when they speed up and slow down. They sounded new. They sounded high-tech. To me they always sounded like money.
* Through my relentless practice games, I had realized that most players demonstrated a rigid willingness to stick closely to the prices being quoted around them, diverging only slightly. They did this largely by ear, listening out for the prices being quoted, so as to keep their own prices nearby. This presented an opportunity to manipulate the prices being quoted by others simply by quoting prices myself, very loudly. The game operated in a free-for-all style (much like real markets), and if prices were being made around the 62–64 level, loudly quoting 58–60 enough times would often bring the price down to about there.
This presented a new, potentially profitable, strategy. If I had a high card, I would begin the game by calling out a low price. This is a relatively simple bluff—indicating that I have a low card, to bring the overall price down, so that I can then go on to buy at a low level from a variety of players, since everyone has stuck to my initial low price. .. rich people expect poor people to be stupid. If someone who looks like me, and talks like me, starts the game by loudly declaring what sounds like an excessively low price, the other players are more likely to read it as a simpleton revealing his hand cheaply than any kind of complicated bluff.
The key takeaway here is that economists nowadays are ultimately mathematicians, not great thinkers or game players. The other students were playing through calculators, and while they were playing through their calculators, I was guiding their ears, and reading their eyes. Start with a loud bluff, then rapidly assess every other player’s intelligence, level of complexity, and likely card. Once that was established, I’d decide whether I wanted to buy (bet the total would be high) or sell (bet the total would be low). If I was a buyer, I guided the price down by loudly quoting low prices, while actively buying from other players at that low level. If I was a seller, I did the opposite.
* The cards came round and mine was a -10. This is a good card. The -10 is the furthest card from the average, which means it has the most power to change the total of the game. But of course, it’s only of value if other people don’t realize you’ve got it. Otherwise, they’ll immediately start lowering their own prices, and you’ll have no way to profit from it. This is another general rule of trading: you don’t necessarily make money by being right, but by being right when others are wrong.
“Gary’s scores in the warm-up games were so far ahead of any other player that we decided to test him. We wanted to see how he reacted when every single thing turned against him, so we rigged the game. It’s important to know whether a trader will back himself, or back down. Gary, you backed yourself, and we like to see that. Well done.”
The tube station has these four long escalators that flow upward into a huge circular glowing opening hanging above them, so that when you are leaving the station, it feels like you are boarding a spaceship or something. And then, when you come out, you are in a broad, open plaza with trees and with water but with more, so much more than anything, these giant gray columns of metal, soaring upward, spilling their steam to the navy blue clouds.
* Rupert had scanned me, I’d had much time to look at his face. It was at once babyish and concerningly stern, at once handsome and unnecessarily fat. He must have been in his early thirties. Thick black-rimmed glasses framed his eyes beneath a professionally coiffed brown quiff. He had the aura of a man whose parents had dropped him off unexpectedly at boarding school when he was just six years old and had not picked him up until he was twenty-one... He had the muscular-verging-on-fat physique of a man who has been well-fed for many years, possibly from birth. As if his body was struggling to come up with new ways to use all the nutrition... It spoke of a capacity for violence.
* Everybody mentioned Bill, but I hadn’t managed to speak to him. Every time I’d approached him he’d spun his head around like a cat that had been caught licking itself
The next day, Wednesday, I came in at five forty-five. Thank fuck the guy wasn’t there yet. So I bought a cappuccino and put it on his desk. By five past six Bill still wasn’t there, and the coffee must have been cold, so I threw it away and bought another one. I did that again at about six fifteen and luckily Bill walked in just after.
* Did you know, when people go skiing, they actually go right up to the tops of the mountains? And when they are doing it, all around them they can see all the other mountains, covered in snow. I didn’t know it was like that, but it is like that. That’s what they do.
The Credit Trading desk made a big push for me, and that made Caleb want me even more. All this was in spite of, or, perhaps more accurately, with completely no regard for, the fact that I still had absolutely no idea what anyone was doing. I suppose this could be referred to as a “speculative bubble,” and if you sit and think about it for long enough, you can learn something about how bitcoin works.
People sometimes use the terms “broker” and “trader” interchangeably. In fact, they are quite different worlds. This was obvious to me even at this point, because it seemed almost all of the brokers were from Essex or East London, despite the fact that on the trading floor, which was conspicuously in East London, there were no such accents to be found.
The brokers don’t work for the banks. They work for these cartels called “brokerages” and their job is, technically, to make connections between traders. The traders make the deals, and the brokers just match them together. That’s important: the brokers don’t carry any risk if the trades go bad, only the traders do. The brokers are kind of like estate agents. They get paid on commission, which means that they always want you to do more and more trades,
No one on the desk said anything at all to anyone and I didn’t see anything because I was using every muscle available to me to look directly and exactly at my screens.
one of those great rarities, a young female broker. She had that East London air of a fighter about her, and when Bill, in an unfortunate fit of drunkenness, accidentally tipped his eighth pint, in its entirety, into her expensive handbag, I swear on my life I saw her physically suck a single tear back into her eye. I respected that a lot. <> I never saw her again.
And Caleb had looked down at Spengler like a father looks down at his son and put his arm round his shoulder and leaned into him and said, “It’s not your job to rip the customers Spengler. Your job is to rip them, and leave them smiling.” <> And I always remembered that. But I think Spengler forgot it at times. After Lehman he forgot it a lot.
Two million dollars in one single trade. <> After he did that, he got so excited that he leaped out of his swivel chair and into the aisle, and he dropped into a deep lunge that must have made his cream chinos see their whole life flash before their eyes. His heavy head started to bounce, with his huge mouth agape, and his arms were fist-pumping and the sight was so obscene and so absurdly horrific that everyone turned their chairs round to watch.
Bill had been skeptical about the global economy for some time. He didn’t believe you could run an economy simply by lending money to dickheads and he could see global debts going up. He had long suspected the math-genius-credit-traders to be the spoiled rich idiots that, in hindsight, they probably were, and he’d been expecting their shit to blow up. <> The problem was, he had been a little bit early, and he’d been betting on this blow-up for years. This had probably cost him a few million dollars in PnL in each of the previous three years
An FX swap is a loan. It’s a two-way loan where both people borrow one currency from one another. They both pay interest, which means, in the end, only one person pays the interest differential. If pounds are 3% and dollars are 2%, then the pound borrower pays the difference, which would be 1%.
* But as Spengler had pointed out to me, the FX swaps weren’t all free. The very, very short-term FX swaps, the one-day ones, were free: the price was effectively zero. But for anything longer than a couple of weeks or a month there was a really huge premium for borrowing US dollars. This created an equally huge opportunity for FX swap traders to lend dollars for three months at a time, and then just borrow them back every day. It was, as Spengler explained to me, free money.
Rupert: eventually he said, “You know, this place, it’s like Watership Down. The only people you see here are the survivors. What you don’t see is the people who lost.”
“You know, Gary, I’ve got a problem.”
This was an uncharacteristic statement from Rupert, and it took me by surprise. He wasn’t looking at me, but forward and upward, in the direction he was walking, toward the sky.
“Whenever I meet someone,” he continued, “I need to know immediately, as soon as I meet them, whether they’re better than me or worse than me.”
And I didn’t say anything. I was just watching him as we were walking. I really wanted to know what he’d say.
“And then, if they’re better than me, I hate them, I hate them, for being better than me.”
And then a pause.
“But if they’re worse than me, then, I despise them, and it’s even worse, because they’re worse than me. I despise them for that.”
Rupert leaving meant promotions for everyone. JB got promoted to senior euro trader, and Snoopy got promoted to junior euro trader. Hongo got given JB’s old job—Ozzie and yen trader. Promotions and new books for everyone then. Nothing for me. Except with Snoopy going onto the euro book, I got the one thing that I’d really, really wanted. I got to go over and sit next to Bill.
But here he was, Caleb was going. Twenty-nine years old, still young and still handsome. He hadn’t lost any of his hair yet; not even the first hint of gray. What a hero. He was doing what everyone wanted to do, and he hadn’t pissed anyone off. Well, no one I liked, anyway.
Chuck eventually returned and slowly rolled the chair in next to me, and lowered himself into it in installments. The incredible size and weight of the man lent a great gravity to all of his movements. I felt very much like a boy.
Chuck opened the magazine. Not in such a way as to read it himself, but in such a way that made it clear that we were both to look at the pictures, together. The picture was a double-page spread of a woman in a bikini... I didn’t quite know what was going on, but I realized, perhaps on the third or fourth bikini, that it must indeed be true that Chuck was the new head of the desk. There was no other possible explanation. The feeling established itself with greater certainty as we worked our way through the magazine.
Since Caleb had been the Swiss franc trader, I had assumed that the new boss would take over that role, and I would be left as humble Kiwi trader and cover for Bill. Surely Chuck knew that was my job. Or did he? <> I kept looking at him. Was it a game? Was he clueless? I tried to read it in his face. I probably looked at him for longer than I should have done, because after a while, he started to smile again. That big, wide, mischievous, childish grin returned to his face, and then, as he smiled at me, I started to smile too, and I said to him, “I’m the Swiss franc trader, Chuck. I’m the Swiss franc trader.”
And I did it. I became the Swiss franc trader. And I did trade number one from the sheet that I wrote.
And by the end of the year, it had made me just over twelve million dollars.
Which is exactly what I wrote on the sheet.
Five million dollars. Five and a half million dollars.
She lived in northwest London so I needed a car to get to her, and my friend needed £750 because he was studying Fashion Design at Central Saint Martins and he needed to buy a mannequin with collapsible shoulders, so I gave him £710 for his Peugeot and he borrowed the rest from his mum.
Six million dollars, seven million dollars.
And Harry was living out in Essex, with his dad, now, but whenever I got time I’d drive out to get him and we’d go to the gym, and I’d ask him how his job was going and he’d say that it...
It wasn’t until ten million dollars that I even really stopped to look up. It was the end of November by then.
And I thought of all the years that he’d done that, woken up early, gotten the early morning train, in the dark, in the cold, come back late, in the dark, in the cold. For us. For me, I guess. For what? Twenty thousand pounds a year? <> And here was me, small in the shadow of the skyscrapers that had grown around me as a boy, sitting, cross-legged, with no jacket and no scarf, in a small triangle of light, on a small square of grass, just turned twenty-three years old, and just having received three hundred and ninety five thousand pounds.
And the thought after that was, what did the rest of them make? If I made £395,000 on twelve million dollars, then what did Hong make, on his seventy? What had Rupert made the previous year, with eighty million dollars? What did Bill make on one hundred million dollars, two years in a row? <> And what about the credit traders, with the pink monogrammed shirts, who had blown up the world? What had they made before they blew up the world?
Why not me? I’m not worse than them. I’m better than them. We’re all better than them. And I’m better than all of them. I’m the best. I can be the best. <> And I think there, in that cold January sun something about me changed, and my career changed, and it wasn’t a career anymore. From then on, it was bank robbery.
It was cold that night, one of those frosty London nights where there’s no clouds above you, and you can actually see a couple stars for once, and you can feel how cold the universe is.
“I got three hundred and ninety-five thousand pounds.”
And you could feel it, the oxygen leaving the room. You could hear it, like a gust of wind. And after that, ten seconds of silence, and then the plasticky sound of a PlayStation controller, bouncing twice as it drops to the floor.
Things were never the same after that.
Billy never had “pig on pork.” Bill built palaces of culinary balance. First, he would start with his favorite trade, the best trade in the market at the time. That’s the base of the palace. Then Bill would ask himself, what’s the risk to this trade? As an example, Bill knew that the risk to lending dollars was further collapse in the global banking system. He would then look at all the trades that would do well if the banking system collapsed, and pick which one of them was likely to do well even if the banking system didn’t collapse. He’d add that trade to his portfolio, and then he’d make money either way.
He’d continue building his portfolio up like this. What real-world situation is a risk to my bundle of trades? What good trades are there that would do really well in that scenario? In that way he built up a palace of trades in which every risk was covered. That’s why Billy always made money. Whatever tragedy struck, whatever the shock to the system, Bill had some sort of ace to cover it. He seemed to make money whatever way.
Doing this was not easy. I tried to do it, but you needed to know everything about everything. I couldn’t do it. I couldn’t be Bill.
“Am I, Gary Stevenson, twenty-three years old, wearing Leyton Orient shorts with a small Bolognese stain on them, drinking cider and watching the Champions League semi-final with a nineteen-year-old burgeoning alcoholic, the kind of person who receives absolute gold dust, monetizable information on my mobile phone, from a person that I have never met?” <> But alas, I was neither older nor wiser.
You might be thinking, “Well, just call the SNB back and get the fuck out of the trade,” but if you think that, you don’t understand what’s happening. I’ve lent dollars and borrowed francs, and the SNB are offering to borrow dollars and lend francs, at a much much cheaper rate than I ever paid to borrow them. In unlimited size. I can’t get out of the trade with them. They’re trying to do the same trade that I need to do. At the moment, there’s no left-hand sides in the market. <> I can’t get out of the trade with anyone... I got to admit the truth. It turned me on. <> You can’t keep rates at negative 4.5%. It’s not possible. It’s too low.
* What that meant was, I didn’t have to take the loss. Surely. Swiss francs had become unbelievably negative in the three-month swap, and they were getting negative in the longer-term swaps, but day to day I could still lend the francs out at 0. <> I remembered what Snoopy taught me: all that matters is the rate now and the rate at the end. In the gap between those two things is where you make money. I had bet on a difference of 1.1 falling to zero, and it was expanding now to 4.5. But all I had to do was wait and it would come back to zero. It had to. Didn’t it?
“They haven’t done anything to the overnight market. We can still place Swiss francs at 0 percent. Even if the three-month market stays at negative four and a half, we can just roll them down and lend them out every day.”
The Swiss National Bank were taking action to protect their currency. Not to stop their currency from going down, but to stop it from going up. If your currency goes up everything gets too expensive for foreigners. Your exports become non-competitive and your exporting businesses can struggle. The SNB had already brought their official interest rate down to zero and they wanted to try something flash. For some reason, and I’ll never know the real reason, they chose this crazy move in the FX swap market.
In the afternoon, Chuck was off the desk for a bit, about half an hour. When he came back he just put his hand on my shoulder and said, “That was senior management. You know what it means.”
“Yeah. I know what it means.”
Chuck kept his hand on my shoulder when he said, “I know that you’ll learn from this.”
It took me two days to close the trade out. By the end I was down 4.2.
And then the fucker came all the way back.
* The lesson is that Snoopy was wrong. The price now and the price at the end are not the only two things that matter. You must also be there at the end. <> The trade was good. It was the right trade. Snoopy and JB didn’t get stopped out and they both made a ton of money on it. That’s because it was a good trade... Every trader has a pain threshold. Every trader has an amount they can lose. You could have the best trade in the world, but if you hit your pain threshold, it doesn’t matter, you’ll lose all your cash... Take your worst-case scenario, and double it. <> Me, I know what I’m like. When a trade kicks my arse, I’m gonna do more. If it kicks my arse more I will do more again. I don’t know why I’m like that. Maybe because fuck you that’s why.
Titzy was bristly and wiry in both physique and temperament. He had a mousey look, although not without being handsome,
That’s why I needed Titzy. I needed to measure the distance between the real economy and the universities, between the real world and the markets. For that reason, I needed someone beside me who was fresh out of university, fully plugged into the matrix. Someone who knew every economic theory, who read every business paper. Someone whose friends were all fresh out of business school, and whose father messaged him asking for stock trading tips from a yacht. Someone whose silver suit was pumped full to bursting with Kool-Aid. <> Yep, I needed Titzy. I needed Titzy because he was wrong.
Billy knew he was surrounded by idiots. But I’d been inside the universities. I’d taken the courses. I’d memorized the book. I’d seen the dark heart of the idiocy. I knew it. Its flavors. Its taste. <> The best trading, you do it with your nose. It smells like stupidity.
* In the beginning of 2010, everybody thought that interest rates would go back up that year. Everyone had thought the same in 2009. <> But it hadn’t happened. Everyone had been wrong, two years in a row.
I looked to the left of me. Pink shirt, pink shirt, white, sky blue. I looked to the right of me. White shirt, white shirt, pink, ooh, pinstripes, don’t see much of that nowadays. There, in string, sewn into a collar, four letters: “A.I.E.Q.” Who the fuck’s surname begins with a Q?
Millionaires. Every single one of them.
And me, too. What about me? I’d be a millionaire, before long.
It was us. It was us, wasn’t it? We were the balance. We were the boys who’d be richer than our fathers, in a world of children who’d be poor. We were the ones with the growing bank balances that balanced the Italian’s debt. We were the ones receiving the interest on Aidan’s mum’s mortgage
* It wasn’t a crisis of confidence. It wasn’t the fucking of the banking system. It wasn’t an “exogenous shock to consumption savings preferences.” It was inequality. Inequality that would grow and grow, and get worse and get worse until it dominated and killed the economy that contained it. It wasn’t temporary, it was terminal. It was the end of the economy. It was cancer.
And I knew what that meant.
It meant I had to buy green Eurodollars.
A green Eurodollar is a bet. A nice, clean bet on what American interest rates will be in two and a half years’ time.
for them the economy is only ever about averages, about aggregates. They ignore the distribution. For them, it’s nothing more than an afterthought. Moralist window dressing.
If I was right, this was a big deal. It meant that markets were horribly, horribly mispriced. The recovery would never happen and the normalization of interest rates would never happen. At that point, the beginning of 2011, markets were pricing nearly 6 full hikes of 0.25% each from the US Federal Reserve in the following twelve months alone.
* The junior on the Tokyo desk had sent Titzy a video of our Tokyo STIRT trader, Hisa Watanabe, on the trading floor during the earthquake. He was crouched under his desk and gripping onto something under there, but his little head kept popping up in a little yellow hard hat and he was trying to grab his mouse and do some trading while Tokyo swayed wildly through the windows in the background. <> Titzy forwarded the video to the desk, but no one found it funny. Do you know why they didn’t find it funny? Because earthquakes make interest rates go down.
Then you make 2.5 million dollars, in a single day, because of an earthquake, and twenty thousand people die, and all of the people who you are closest to, the people who you spend every single day of your life with, the people who taught you to trade, the people who taught you everything, all of them get smashed. <> What does it mean?
You shouldn’t do that. You shouldn’t flip your whole position on a feeling, on a whim. You shouldn’t play God, you are not invincible. But what am I gonna tell you? I was twenty-four years old and I did it.
The nuclear plant never exploded. Thank God.
I made another five million on the way back up.
The best trading, you do it with your nose. It smells like stupidity.
The trouble with that is that Italy can’t do it. Nor can Spain. Nor can Greece. Nor can Portugal. A consequence of the creation of the euro was that European countries lost their legal ability to print their own money. Nobody really worried much about that because these countries were always considered to be super-safe credits. Until they weren’t.
* A stupid game played out between the ECB and the commercial banks. The ECB offered unlimited 1% loans in what it called “auctions”... Seeing that interest rates had collapsed to zero, hardly anyone bid for ECB loans at the next auction. That led to a huge lack of money in the market, and rates shot up to above 2%. Every week it would be like this, with each bank trying to work out how much money the other banks would borrow. If you knew everyone would borrow, you’d try not to borrow yourself, anticipating cheap money in the market. If you thought other banks wouldn’t borrow, you’d get in as much cash as you could. Everyone was trying to do what everyone else didn’t do. The end result was nothing but carnage.
Our faces were even closer now, almost touching, and I could hear his slow, measured breathing. I noticed how blue his eyes were, the pale blueness of the eyes of an old man that have seeped their blue into the world for many years.
“JB, you don’t get it do you? It don’t work like that. Stocks never go down. Stocks only go up. When the economy is good stocks go up, and when the economy is shit, they print so much money stocks go up even more. Same with fucking houses. Everything goes up. The asset holders never lose.
It was obvious what he was saying. I was up over twenty-four million dollars. That trade dropped JB in the red. I have no doubt, I am absolutely certain, that JB himself would have taken the trade.
I remembered the first time I’d met JB. How he’d taken me in. How he’d been the first trader on the desk to talk to me, how he’d given me my first book. I remember how he’d comforted me when I’d lost eight million dollars. I remembered the exact words that he’d said to me—“tough times don’t last, tough people do.” Then I looked into his red face and I saw four luxury flats, overlooking Big Ben.
I stuck my tongue deep into my cheek and bit down on it hard.
“Tough times don’t last JB. Tough people do.”
“Millzy where’s three months? FUCK!” Bang! <> He was going down the broker lines one at a time. There was a real musicality to it, a beauty.
bonus day: And then, suddenly, for the first time in twenty-five years in the city, when I breathed in, I felt the cold air of London come into me, come inside of me, and it filled up my lungs, and it burnt them, and I just couldn’t understand why.
Would you believe that the Japanese drink rice wine from a wooden box? They really do. They place a glass inside of a square wooden box, and then they slowly fill your glass with rice wine until it is full to the very brim. At that point, they do not stop pouring. They continue to pour and the rice wine overflows and it flows down the side of the glass and begins to fill up the wooden box. They continue to pour into the glass until both the glass and the wooden box are both full. Only then do they stop. I’ve always liked it. I suppose it’s supposed to represent an overabundance of hospitality, or something. But, for me, who first witnessed the act on that evening, the practice has always reminded me of the questions that do not overflow from men’s hearts.
parents' visit: They couldn’t seem to destarch themselves the whole time, and I guessed it was because they didn’t know how to use chopsticks.
But the problem with quitting was—I couldn’t. You see, I was handcuffed right in. When Citibank paid me that huge bonus, the bonus that I can’t remember, at the beginning of 2012, they took care to tie me tight to my screens. Some of the bonus was to be paid up front, which was the money I was investing. The rest was to be paid with a significant delay. A quarter in 2013,
And the white shirts, neatly bordered by black trousers and slim, black suit jackets, cascade out of the exits of the underground stations at 8 a.m. and 9 a.m. like waterfalls flowing upward, into the real world, and the individual men and women inside of that flow are carp fighting upstream,
Hisa Watanabe had been the yen trader for as long as anyone could remember. He was a small, mousy man, who had inexplicably chosen to speak his English with the accent of a 1920s New York gangster, and he was a very, very bad trader. No, that’s unfair. He wasn’t a trader at all. He was a shopkeeper, an accountant, a paper-shuffly sort of a man.
* He had the air of the world’s tallest and most prestigious fifteen-year-old, but I suppose he must have been at least twenty-five. Think Jared Kushner with a much better personal trainer. Arthur was the most right-wing person I have ever known personally.
6:30: The three Japanese men around me—Hisa Watanabe, and the two lunch connoisseurs—responded with a loud, militaristic grunt that slid into a long hiss. They stood up and tucked in their own chairs. <> The combined movement of the four men was balletic in its simultaneity. Shocked and impressed, I had turned to face Joey, and was staring the man in the face.
What can I tell you about hostess bars and about soaplands and about hostess karaoke? Probably far more than either of us would like to know. Just, women. So many women. Did I make it clear I wasn’t warned?
You see, once interest rate predictions fall to zero, then everyone’s not wrong anymore. Everyone’s right. Finally, for the first time in nearly two years since putting on the position, everyone was agreeing with me. The economy was fucked forever. There would be no recovery. There’s nothing worse than being right and everyone agreeing with you. There’s no way to make any cash.... I was the yen trader. For an American bank. Not a Japanese bank. The Japanese interest rates never fucking moved and the market was deader than dead. Even when I did have prices to make Hisa overruled them and I couldn’t be fucked to fight back. <> So that was it. No customers to play the trading game with. No economy to bet on the death of. Just me, and Arthur, and Hisa Watanabe, and two men talking about lunch.
I thanked fuck that his screen was on mute. For the first time in my life I realized that I hated him. Did I hate him, or did I despise him? I don’t fucking know, what’s the fucking difference? I wondered if he knew that I hated him and I wondered why I hated him. God knows the guy had done a lot for me, in my career. The more he did for me the more I hated him. So it goes, I guess.
* I had still made money though. I had always made money. That was easy. All you had to do was bet on disaster. The end of the economy. The end of the world. That had been the last thread connecting me to humanity. Suddenly I’d lost even that.
* There is this weird thing in Japanese culture where people won’t tell you if they are pissed off with you, at least not directly. What they will often do, instead, is to manifest physical pain in themselves... So what do you do then if someone asks you to hang out on Saturday, and you have a hot date on Saturday? Do you say no? Of course not. What you do is you tilt your head to the side, and you grimace and you sharply inhale through your teeth, as if afflicted with toothache. The other person, seeing your sudden pain, understands this to be no and backs off. <> Hisa started doing this constantly. The problem was, I didn’t understand. I’d put my feet up on the table and Hisa would hiss like I’d stepped on his foot. I’d turn and look at him, confused, and then try and nod off. Hisa would contort his body and breathe out really throaty and slowly, as if pulling an arrow from his back like the fucking Japanese Saint Sebastian. I’d raise one eye and look at him concerned. Continually failing to transmit his displeasure, Hisa would up his game again and again, to the point where he looked to be experiencing total organ failure.
Touch her on the arm. Ask her to go with you, over there, to that corner. You take her home. Bam!” <> I had not requested this lesson, but I appreciated it, even if only for its pointillistic style.
Arthur paused so that he could reload an extra-loud laugh.
“No! They cannot! This is Japan! There are rules! It is not allowed to break any laws.”
“Kousuke, I think not breaking laws is a pretty fucking international rule mate, and that hasn’t fucking stopped them, has it??”
Kousuke was angry, he was furious. He carried it in a bottled up, invisible way that’s at home in his country and mine.
“You must record it. You have to record it. Buy a recorder. Make him say it again.”
“Why the fuck did they ask me to apply then?” <> It’s a stupid question, because the answer was obvious. They did it to show me I was trapped.
I broke up with the Japanese girl that weekend. I wasn’t having another fucking girl watch me with tears in her eyes as my life turned to ashes and bone. I started running around the palace again. Get all the fat off, all the fucking fat off. Cut all the fat off that isn’t even there. Cut off everything that you don’t need.
The confluence of these two separate occurrences—the Slug’s firing and my personal descent to a new layer of insanity—mean that I have no way of knowing who won my freedom. Was it me? Or was it the Slug?
Maybe I did outplay Citibank, maybe I outmaneuvered them. Maybe I really did play a great game. Or maybe I didn’t do any of that. Maybe I just kept getting up, like handsome Paul Newman, and kept getting punched in the face. How do we ever know which of our wins, and which of our losses, were from luck, and which ones were from skill? <> And trading is like that, too, isn’t it? Sure, I made money in 2011, and 2012, by betting on the collapse of the global economy, the slow but constant and certain collapse of living standards for ordinary people, for ordinary families, the descent of hundreds of millions of families across the world into inescapable poverty, and sure that did actually happen, in the real world, but, in the end, does that mean I was right?
* From the 42nd floor of the Citibank Center, you cannot see East London. You can only see the 42nd floor of the HSBC Tower. The ambitious young children of East London look up to the skyscrapers that cast shadows on their houses, but the skyscrapers don’t look back. They look at each other. <> This is the story of how I, of all the kids playing football and selling sweets in those shadows, got a job on the Citibank trading floor. It’s a story of how I became Citibank’s most profitable trader, in the whole world, and it’s a story about why, after all of that, I quit.
There is no way to get a job without an internship, unless you’ve got contacts, and the only time to get an internship is now. If you don’t get an internship after second year, you’ll have to get an internship after third year. After your internship, 50 percent of interns will get an offer of a full-time job a full year later, so if you interned after third year, you’d be facing a full year of unemployment. But really, that’s just theoretical, because no investment bank is going to hire an intern at the end of their third year—they’ll know everyone rejected you in second year, and nobody’s going to want a rejected intern.
It’s called “The Trading Game,” but it’s basically a maths game. If you win it, you can get invited to the national final, and if you win that you get an internship. I heard you’re pretty good at maths. You should go.” <> I had never met Luke before, but he sat down next to me, told me the date and time of the competition, and briefly explained to me the rules of the game.
* A confidence seemed to snake off of him, like smoke from a candle, flowing into the room. There was a kind of thick, sticky darkness to it, but also a sharp, shiny brightness, like treacle inside a glass jar, and alongside it that huge, never-ending, pearly white smile. Something about that dark, sticky confidence transported me back home again, to Ilford. To the cool kids at school turned drug dealers making £10 into £100 by selling bags. But there was a depth there that I’d not seen in Ilford. Something that I’d started to see at LSE. The confidence of a man who wins, not just today, but tomorrow.
It ran using a special deck of seventeen numbered cards: some higher, some lower. In case you ever want to play it yourself, the full deck of cards was a -10, a 20, and all the numbers 1 through 15. Each player is dealt their own card, which they could look at, and then another three cards are placed, face down, in the center of the table. The game works by players essentially making bets against each other on what will be the total numerical value of the eight cards in the game (each of five players has one card, plus the three in the middle). <> Conceptually, you can think of it like this: you are all buying and selling some asset and the total value of that asset is the sum of the cards in the game. You only have certain information (your own card); more information (the cards in the middle) is revealed as the game goes on. If you have a high card, say the 15, or the 20, then that gives you inside information that the total will probably be quite high
you don’t want to tell the trader that you want to buy before you actually get the chance to buy. To avoid this, you say “Hi, give me a price on ten million pounds.” <> When you say this, the trader (in theory) won’t know whether you want to buy or sell. The convention then is that he has to give you two prices—one at which you can buy and one at which you can sell.
Citibank’s Trading Game functioned in the same way. Any player could ask any other player at any time “what’s your price?”; the other player would have to provide a two-way price with a spread (between the buy price and the sell price) of 2.
Imagine one guy on your table has the 20, and he starts right away quoting 67–69 (remember, his expectation is 68). Another guy has the -10, and he starts quoting 50–52. What do you do? <> Well first of all, you know right away that one guy has the -10 and another guy has the 20. They’ve revealed to you exactly their cards with the first words that they’ve spoken. But that isn’t even the point here. The point is, that you can go to the 50–52 guy, and bet that the total will be higher than 52. Then you can turn to the 67–69 guy, and bet that the total will be lower than 67. Buy at 52; sell at 67. Those two bets cancel out immediately, and you make a profit of 15. That happens regardless of what the actual total of the game is, a completely risk-free profit of 15.
While they were working out their expected values, I was just chucking points into the bag.
Now this game was only a maths game, but it does tell you a few things about markets:
1. Individual traders don’t set the price. Just because you think something is worth 60, you don’t offer to buy it at 59 if everyone else is selling it at 50. If other people are selling it at 50, the highest you should possibly quote is 50–52. There is no point offering to buy at 51 if someone is out there selling at 50. This shows something interesting about markets, which is that an individual trader shouldn’t quote what they think something is worth, but rather what everyone else thinks is the price.
2. Because of this, if you ask ten different traders for a price, you shouldn’t get ten different prices: they should all converge on a similar price. This will be true even if the ten different traders have totally different views about what the price should actually be.
The Jubilee Line trains had a totally different sound to the ones that ran past my bed every morning. They make a spiraling, whirring, ascending sound when they speed up and slow down. They sounded new. They sounded high-tech. To me they always sounded like money.
* Through my relentless practice games, I had realized that most players demonstrated a rigid willingness to stick closely to the prices being quoted around them, diverging only slightly. They did this largely by ear, listening out for the prices being quoted, so as to keep their own prices nearby. This presented an opportunity to manipulate the prices being quoted by others simply by quoting prices myself, very loudly. The game operated in a free-for-all style (much like real markets), and if prices were being made around the 62–64 level, loudly quoting 58–60 enough times would often bring the price down to about there.
This presented a new, potentially profitable, strategy. If I had a high card, I would begin the game by calling out a low price. This is a relatively simple bluff—indicating that I have a low card, to bring the overall price down, so that I can then go on to buy at a low level from a variety of players, since everyone has stuck to my initial low price. .. rich people expect poor people to be stupid. If someone who looks like me, and talks like me, starts the game by loudly declaring what sounds like an excessively low price, the other players are more likely to read it as a simpleton revealing his hand cheaply than any kind of complicated bluff.
The key takeaway here is that economists nowadays are ultimately mathematicians, not great thinkers or game players. The other students were playing through calculators, and while they were playing through their calculators, I was guiding their ears, and reading their eyes. Start with a loud bluff, then rapidly assess every other player’s intelligence, level of complexity, and likely card. Once that was established, I’d decide whether I wanted to buy (bet the total would be high) or sell (bet the total would be low). If I was a buyer, I guided the price down by loudly quoting low prices, while actively buying from other players at that low level. If I was a seller, I did the opposite.
* The cards came round and mine was a -10. This is a good card. The -10 is the furthest card from the average, which means it has the most power to change the total of the game. But of course, it’s only of value if other people don’t realize you’ve got it. Otherwise, they’ll immediately start lowering their own prices, and you’ll have no way to profit from it. This is another general rule of trading: you don’t necessarily make money by being right, but by being right when others are wrong.
“Gary’s scores in the warm-up games were so far ahead of any other player that we decided to test him. We wanted to see how he reacted when every single thing turned against him, so we rigged the game. It’s important to know whether a trader will back himself, or back down. Gary, you backed yourself, and we like to see that. Well done.”
The tube station has these four long escalators that flow upward into a huge circular glowing opening hanging above them, so that when you are leaving the station, it feels like you are boarding a spaceship or something. And then, when you come out, you are in a broad, open plaza with trees and with water but with more, so much more than anything, these giant gray columns of metal, soaring upward, spilling their steam to the navy blue clouds.
* Rupert had scanned me, I’d had much time to look at his face. It was at once babyish and concerningly stern, at once handsome and unnecessarily fat. He must have been in his early thirties. Thick black-rimmed glasses framed his eyes beneath a professionally coiffed brown quiff. He had the aura of a man whose parents had dropped him off unexpectedly at boarding school when he was just six years old and had not picked him up until he was twenty-one... He had the muscular-verging-on-fat physique of a man who has been well-fed for many years, possibly from birth. As if his body was struggling to come up with new ways to use all the nutrition... It spoke of a capacity for violence.
* Everybody mentioned Bill, but I hadn’t managed to speak to him. Every time I’d approached him he’d spun his head around like a cat that had been caught licking itself
The next day, Wednesday, I came in at five forty-five. Thank fuck the guy wasn’t there yet. So I bought a cappuccino and put it on his desk. By five past six Bill still wasn’t there, and the coffee must have been cold, so I threw it away and bought another one. I did that again at about six fifteen and luckily Bill walked in just after.
* Did you know, when people go skiing, they actually go right up to the tops of the mountains? And when they are doing it, all around them they can see all the other mountains, covered in snow. I didn’t know it was like that, but it is like that. That’s what they do.
The Credit Trading desk made a big push for me, and that made Caleb want me even more. All this was in spite of, or, perhaps more accurately, with completely no regard for, the fact that I still had absolutely no idea what anyone was doing. I suppose this could be referred to as a “speculative bubble,” and if you sit and think about it for long enough, you can learn something about how bitcoin works.
People sometimes use the terms “broker” and “trader” interchangeably. In fact, they are quite different worlds. This was obvious to me even at this point, because it seemed almost all of the brokers were from Essex or East London, despite the fact that on the trading floor, which was conspicuously in East London, there were no such accents to be found.
The brokers don’t work for the banks. They work for these cartels called “brokerages” and their job is, technically, to make connections between traders. The traders make the deals, and the brokers just match them together. That’s important: the brokers don’t carry any risk if the trades go bad, only the traders do. The brokers are kind of like estate agents. They get paid on commission, which means that they always want you to do more and more trades,
No one on the desk said anything at all to anyone and I didn’t see anything because I was using every muscle available to me to look directly and exactly at my screens.
one of those great rarities, a young female broker. She had that East London air of a fighter about her, and when Bill, in an unfortunate fit of drunkenness, accidentally tipped his eighth pint, in its entirety, into her expensive handbag, I swear on my life I saw her physically suck a single tear back into her eye. I respected that a lot. <> I never saw her again.
And Caleb had looked down at Spengler like a father looks down at his son and put his arm round his shoulder and leaned into him and said, “It’s not your job to rip the customers Spengler. Your job is to rip them, and leave them smiling.” <> And I always remembered that. But I think Spengler forgot it at times. After Lehman he forgot it a lot.
Two million dollars in one single trade. <> After he did that, he got so excited that he leaped out of his swivel chair and into the aisle, and he dropped into a deep lunge that must have made his cream chinos see their whole life flash before their eyes. His heavy head started to bounce, with his huge mouth agape, and his arms were fist-pumping and the sight was so obscene and so absurdly horrific that everyone turned their chairs round to watch.
Bill had been skeptical about the global economy for some time. He didn’t believe you could run an economy simply by lending money to dickheads and he could see global debts going up. He had long suspected the math-genius-credit-traders to be the spoiled rich idiots that, in hindsight, they probably were, and he’d been expecting their shit to blow up. <> The problem was, he had been a little bit early, and he’d been betting on this blow-up for years. This had probably cost him a few million dollars in PnL in each of the previous three years
An FX swap is a loan. It’s a two-way loan where both people borrow one currency from one another. They both pay interest, which means, in the end, only one person pays the interest differential. If pounds are 3% and dollars are 2%, then the pound borrower pays the difference, which would be 1%.
* But as Spengler had pointed out to me, the FX swaps weren’t all free. The very, very short-term FX swaps, the one-day ones, were free: the price was effectively zero. But for anything longer than a couple of weeks or a month there was a really huge premium for borrowing US dollars. This created an equally huge opportunity for FX swap traders to lend dollars for three months at a time, and then just borrow them back every day. It was, as Spengler explained to me, free money.
Rupert: eventually he said, “You know, this place, it’s like Watership Down. The only people you see here are the survivors. What you don’t see is the people who lost.”
“You know, Gary, I’ve got a problem.”
This was an uncharacteristic statement from Rupert, and it took me by surprise. He wasn’t looking at me, but forward and upward, in the direction he was walking, toward the sky.
“Whenever I meet someone,” he continued, “I need to know immediately, as soon as I meet them, whether they’re better than me or worse than me.”
And I didn’t say anything. I was just watching him as we were walking. I really wanted to know what he’d say.
“And then, if they’re better than me, I hate them, I hate them, for being better than me.”
And then a pause.
“But if they’re worse than me, then, I despise them, and it’s even worse, because they’re worse than me. I despise them for that.”
Rupert leaving meant promotions for everyone. JB got promoted to senior euro trader, and Snoopy got promoted to junior euro trader. Hongo got given JB’s old job—Ozzie and yen trader. Promotions and new books for everyone then. Nothing for me. Except with Snoopy going onto the euro book, I got the one thing that I’d really, really wanted. I got to go over and sit next to Bill.
But here he was, Caleb was going. Twenty-nine years old, still young and still handsome. He hadn’t lost any of his hair yet; not even the first hint of gray. What a hero. He was doing what everyone wanted to do, and he hadn’t pissed anyone off. Well, no one I liked, anyway.
Chuck eventually returned and slowly rolled the chair in next to me, and lowered himself into it in installments. The incredible size and weight of the man lent a great gravity to all of his movements. I felt very much like a boy.
Chuck opened the magazine. Not in such a way as to read it himself, but in such a way that made it clear that we were both to look at the pictures, together. The picture was a double-page spread of a woman in a bikini... I didn’t quite know what was going on, but I realized, perhaps on the third or fourth bikini, that it must indeed be true that Chuck was the new head of the desk. There was no other possible explanation. The feeling established itself with greater certainty as we worked our way through the magazine.
Since Caleb had been the Swiss franc trader, I had assumed that the new boss would take over that role, and I would be left as humble Kiwi trader and cover for Bill. Surely Chuck knew that was my job. Or did he? <> I kept looking at him. Was it a game? Was he clueless? I tried to read it in his face. I probably looked at him for longer than I should have done, because after a while, he started to smile again. That big, wide, mischievous, childish grin returned to his face, and then, as he smiled at me, I started to smile too, and I said to him, “I’m the Swiss franc trader, Chuck. I’m the Swiss franc trader.”
And I did it. I became the Swiss franc trader. And I did trade number one from the sheet that I wrote.
And by the end of the year, it had made me just over twelve million dollars.
Which is exactly what I wrote on the sheet.
Five million dollars. Five and a half million dollars.
She lived in northwest London so I needed a car to get to her, and my friend needed £750 because he was studying Fashion Design at Central Saint Martins and he needed to buy a mannequin with collapsible shoulders, so I gave him £710 for his Peugeot and he borrowed the rest from his mum.
Six million dollars, seven million dollars.
And Harry was living out in Essex, with his dad, now, but whenever I got time I’d drive out to get him and we’d go to the gym, and I’d ask him how his job was going and he’d say that it...
It wasn’t until ten million dollars that I even really stopped to look up. It was the end of November by then.
And I thought of all the years that he’d done that, woken up early, gotten the early morning train, in the dark, in the cold, come back late, in the dark, in the cold. For us. For me, I guess. For what? Twenty thousand pounds a year? <> And here was me, small in the shadow of the skyscrapers that had grown around me as a boy, sitting, cross-legged, with no jacket and no scarf, in a small triangle of light, on a small square of grass, just turned twenty-three years old, and just having received three hundred and ninety five thousand pounds.
And the thought after that was, what did the rest of them make? If I made £395,000 on twelve million dollars, then what did Hong make, on his seventy? What had Rupert made the previous year, with eighty million dollars? What did Bill make on one hundred million dollars, two years in a row? <> And what about the credit traders, with the pink monogrammed shirts, who had blown up the world? What had they made before they blew up the world?
Why not me? I’m not worse than them. I’m better than them. We’re all better than them. And I’m better than all of them. I’m the best. I can be the best. <> And I think there, in that cold January sun something about me changed, and my career changed, and it wasn’t a career anymore. From then on, it was bank robbery.
It was cold that night, one of those frosty London nights where there’s no clouds above you, and you can actually see a couple stars for once, and you can feel how cold the universe is.
“I got three hundred and ninety-five thousand pounds.”
And you could feel it, the oxygen leaving the room. You could hear it, like a gust of wind. And after that, ten seconds of silence, and then the plasticky sound of a PlayStation controller, bouncing twice as it drops to the floor.
Things were never the same after that.
Billy never had “pig on pork.” Bill built palaces of culinary balance. First, he would start with his favorite trade, the best trade in the market at the time. That’s the base of the palace. Then Bill would ask himself, what’s the risk to this trade? As an example, Bill knew that the risk to lending dollars was further collapse in the global banking system. He would then look at all the trades that would do well if the banking system collapsed, and pick which one of them was likely to do well even if the banking system didn’t collapse. He’d add that trade to his portfolio, and then he’d make money either way.
He’d continue building his portfolio up like this. What real-world situation is a risk to my bundle of trades? What good trades are there that would do really well in that scenario? In that way he built up a palace of trades in which every risk was covered. That’s why Billy always made money. Whatever tragedy struck, whatever the shock to the system, Bill had some sort of ace to cover it. He seemed to make money whatever way.
Doing this was not easy. I tried to do it, but you needed to know everything about everything. I couldn’t do it. I couldn’t be Bill.
“Am I, Gary Stevenson, twenty-three years old, wearing Leyton Orient shorts with a small Bolognese stain on them, drinking cider and watching the Champions League semi-final with a nineteen-year-old burgeoning alcoholic, the kind of person who receives absolute gold dust, monetizable information on my mobile phone, from a person that I have never met?” <> But alas, I was neither older nor wiser.
You might be thinking, “Well, just call the SNB back and get the fuck out of the trade,” but if you think that, you don’t understand what’s happening. I’ve lent dollars and borrowed francs, and the SNB are offering to borrow dollars and lend francs, at a much much cheaper rate than I ever paid to borrow them. In unlimited size. I can’t get out of the trade with them. They’re trying to do the same trade that I need to do. At the moment, there’s no left-hand sides in the market. <> I can’t get out of the trade with anyone... I got to admit the truth. It turned me on. <> You can’t keep rates at negative 4.5%. It’s not possible. It’s too low.
* What that meant was, I didn’t have to take the loss. Surely. Swiss francs had become unbelievably negative in the three-month swap, and they were getting negative in the longer-term swaps, but day to day I could still lend the francs out at 0. <> I remembered what Snoopy taught me: all that matters is the rate now and the rate at the end. In the gap between those two things is where you make money. I had bet on a difference of 1.1 falling to zero, and it was expanding now to 4.5. But all I had to do was wait and it would come back to zero. It had to. Didn’t it?
“They haven’t done anything to the overnight market. We can still place Swiss francs at 0 percent. Even if the three-month market stays at negative four and a half, we can just roll them down and lend them out every day.”
The Swiss National Bank were taking action to protect their currency. Not to stop their currency from going down, but to stop it from going up. If your currency goes up everything gets too expensive for foreigners. Your exports become non-competitive and your exporting businesses can struggle. The SNB had already brought their official interest rate down to zero and they wanted to try something flash. For some reason, and I’ll never know the real reason, they chose this crazy move in the FX swap market.
In the afternoon, Chuck was off the desk for a bit, about half an hour. When he came back he just put his hand on my shoulder and said, “That was senior management. You know what it means.”
“Yeah. I know what it means.”
Chuck kept his hand on my shoulder when he said, “I know that you’ll learn from this.”
It took me two days to close the trade out. By the end I was down 4.2.
And then the fucker came all the way back.
* The lesson is that Snoopy was wrong. The price now and the price at the end are not the only two things that matter. You must also be there at the end. <> The trade was good. It was the right trade. Snoopy and JB didn’t get stopped out and they both made a ton of money on it. That’s because it was a good trade... Every trader has a pain threshold. Every trader has an amount they can lose. You could have the best trade in the world, but if you hit your pain threshold, it doesn’t matter, you’ll lose all your cash... Take your worst-case scenario, and double it. <> Me, I know what I’m like. When a trade kicks my arse, I’m gonna do more. If it kicks my arse more I will do more again. I don’t know why I’m like that. Maybe because fuck you that’s why.
Titzy was bristly and wiry in both physique and temperament. He had a mousey look, although not without being handsome,
That’s why I needed Titzy. I needed to measure the distance between the real economy and the universities, between the real world and the markets. For that reason, I needed someone beside me who was fresh out of university, fully plugged into the matrix. Someone who knew every economic theory, who read every business paper. Someone whose friends were all fresh out of business school, and whose father messaged him asking for stock trading tips from a yacht. Someone whose silver suit was pumped full to bursting with Kool-Aid. <> Yep, I needed Titzy. I needed Titzy because he was wrong.
Billy knew he was surrounded by idiots. But I’d been inside the universities. I’d taken the courses. I’d memorized the book. I’d seen the dark heart of the idiocy. I knew it. Its flavors. Its taste. <> The best trading, you do it with your nose. It smells like stupidity.
* In the beginning of 2010, everybody thought that interest rates would go back up that year. Everyone had thought the same in 2009. <> But it hadn’t happened. Everyone had been wrong, two years in a row.
I looked to the left of me. Pink shirt, pink shirt, white, sky blue. I looked to the right of me. White shirt, white shirt, pink, ooh, pinstripes, don’t see much of that nowadays. There, in string, sewn into a collar, four letters: “A.I.E.Q.” Who the fuck’s surname begins with a Q?
Millionaires. Every single one of them.
And me, too. What about me? I’d be a millionaire, before long.
It was us. It was us, wasn’t it? We were the balance. We were the boys who’d be richer than our fathers, in a world of children who’d be poor. We were the ones with the growing bank balances that balanced the Italian’s debt. We were the ones receiving the interest on Aidan’s mum’s mortgage
* It wasn’t a crisis of confidence. It wasn’t the fucking of the banking system. It wasn’t an “exogenous shock to consumption savings preferences.” It was inequality. Inequality that would grow and grow, and get worse and get worse until it dominated and killed the economy that contained it. It wasn’t temporary, it was terminal. It was the end of the economy. It was cancer.
And I knew what that meant.
It meant I had to buy green Eurodollars.
A green Eurodollar is a bet. A nice, clean bet on what American interest rates will be in two and a half years’ time.
for them the economy is only ever about averages, about aggregates. They ignore the distribution. For them, it’s nothing more than an afterthought. Moralist window dressing.
If I was right, this was a big deal. It meant that markets were horribly, horribly mispriced. The recovery would never happen and the normalization of interest rates would never happen. At that point, the beginning of 2011, markets were pricing nearly 6 full hikes of 0.25% each from the US Federal Reserve in the following twelve months alone.
* The junior on the Tokyo desk had sent Titzy a video of our Tokyo STIRT trader, Hisa Watanabe, on the trading floor during the earthquake. He was crouched under his desk and gripping onto something under there, but his little head kept popping up in a little yellow hard hat and he was trying to grab his mouse and do some trading while Tokyo swayed wildly through the windows in the background. <> Titzy forwarded the video to the desk, but no one found it funny. Do you know why they didn’t find it funny? Because earthquakes make interest rates go down.
Then you make 2.5 million dollars, in a single day, because of an earthquake, and twenty thousand people die, and all of the people who you are closest to, the people who you spend every single day of your life with, the people who taught you to trade, the people who taught you everything, all of them get smashed. <> What does it mean?
You shouldn’t do that. You shouldn’t flip your whole position on a feeling, on a whim. You shouldn’t play God, you are not invincible. But what am I gonna tell you? I was twenty-four years old and I did it.
The nuclear plant never exploded. Thank God.
I made another five million on the way back up.
The best trading, you do it with your nose. It smells like stupidity.
The trouble with that is that Italy can’t do it. Nor can Spain. Nor can Greece. Nor can Portugal. A consequence of the creation of the euro was that European countries lost their legal ability to print their own money. Nobody really worried much about that because these countries were always considered to be super-safe credits. Until they weren’t.
* A stupid game played out between the ECB and the commercial banks. The ECB offered unlimited 1% loans in what it called “auctions”... Seeing that interest rates had collapsed to zero, hardly anyone bid for ECB loans at the next auction. That led to a huge lack of money in the market, and rates shot up to above 2%. Every week it would be like this, with each bank trying to work out how much money the other banks would borrow. If you knew everyone would borrow, you’d try not to borrow yourself, anticipating cheap money in the market. If you thought other banks wouldn’t borrow, you’d get in as much cash as you could. Everyone was trying to do what everyone else didn’t do. The end result was nothing but carnage.
Our faces were even closer now, almost touching, and I could hear his slow, measured breathing. I noticed how blue his eyes were, the pale blueness of the eyes of an old man that have seeped their blue into the world for many years.
“JB, you don’t get it do you? It don’t work like that. Stocks never go down. Stocks only go up. When the economy is good stocks go up, and when the economy is shit, they print so much money stocks go up even more. Same with fucking houses. Everything goes up. The asset holders never lose.
It was obvious what he was saying. I was up over twenty-four million dollars. That trade dropped JB in the red. I have no doubt, I am absolutely certain, that JB himself would have taken the trade.
I remembered the first time I’d met JB. How he’d taken me in. How he’d been the first trader on the desk to talk to me, how he’d given me my first book. I remember how he’d comforted me when I’d lost eight million dollars. I remembered the exact words that he’d said to me—“tough times don’t last, tough people do.” Then I looked into his red face and I saw four luxury flats, overlooking Big Ben.
I stuck my tongue deep into my cheek and bit down on it hard.
“Tough times don’t last JB. Tough people do.”
“Millzy where’s three months? FUCK!” Bang! <> He was going down the broker lines one at a time. There was a real musicality to it, a beauty.
bonus day: And then, suddenly, for the first time in twenty-five years in the city, when I breathed in, I felt the cold air of London come into me, come inside of me, and it filled up my lungs, and it burnt them, and I just couldn’t understand why.
Would you believe that the Japanese drink rice wine from a wooden box? They really do. They place a glass inside of a square wooden box, and then they slowly fill your glass with rice wine until it is full to the very brim. At that point, they do not stop pouring. They continue to pour and the rice wine overflows and it flows down the side of the glass and begins to fill up the wooden box. They continue to pour into the glass until both the glass and the wooden box are both full. Only then do they stop. I’ve always liked it. I suppose it’s supposed to represent an overabundance of hospitality, or something. But, for me, who first witnessed the act on that evening, the practice has always reminded me of the questions that do not overflow from men’s hearts.
parents' visit: They couldn’t seem to destarch themselves the whole time, and I guessed it was because they didn’t know how to use chopsticks.
But the problem with quitting was—I couldn’t. You see, I was handcuffed right in. When Citibank paid me that huge bonus, the bonus that I can’t remember, at the beginning of 2012, they took care to tie me tight to my screens. Some of the bonus was to be paid up front, which was the money I was investing. The rest was to be paid with a significant delay. A quarter in 2013,
And the white shirts, neatly bordered by black trousers and slim, black suit jackets, cascade out of the exits of the underground stations at 8 a.m. and 9 a.m. like waterfalls flowing upward, into the real world, and the individual men and women inside of that flow are carp fighting upstream,
Hisa Watanabe had been the yen trader for as long as anyone could remember. He was a small, mousy man, who had inexplicably chosen to speak his English with the accent of a 1920s New York gangster, and he was a very, very bad trader. No, that’s unfair. He wasn’t a trader at all. He was a shopkeeper, an accountant, a paper-shuffly sort of a man.
* He had the air of the world’s tallest and most prestigious fifteen-year-old, but I suppose he must have been at least twenty-five. Think Jared Kushner with a much better personal trainer. Arthur was the most right-wing person I have ever known personally.
6:30: The three Japanese men around me—Hisa Watanabe, and the two lunch connoisseurs—responded with a loud, militaristic grunt that slid into a long hiss. They stood up and tucked in their own chairs. <> The combined movement of the four men was balletic in its simultaneity. Shocked and impressed, I had turned to face Joey, and was staring the man in the face.
What can I tell you about hostess bars and about soaplands and about hostess karaoke? Probably far more than either of us would like to know. Just, women. So many women. Did I make it clear I wasn’t warned?
You see, once interest rate predictions fall to zero, then everyone’s not wrong anymore. Everyone’s right. Finally, for the first time in nearly two years since putting on the position, everyone was agreeing with me. The economy was fucked forever. There would be no recovery. There’s nothing worse than being right and everyone agreeing with you. There’s no way to make any cash.... I was the yen trader. For an American bank. Not a Japanese bank. The Japanese interest rates never fucking moved and the market was deader than dead. Even when I did have prices to make Hisa overruled them and I couldn’t be fucked to fight back. <> So that was it. No customers to play the trading game with. No economy to bet on the death of. Just me, and Arthur, and Hisa Watanabe, and two men talking about lunch.
I thanked fuck that his screen was on mute. For the first time in my life I realized that I hated him. Did I hate him, or did I despise him? I don’t fucking know, what’s the fucking difference? I wondered if he knew that I hated him and I wondered why I hated him. God knows the guy had done a lot for me, in my career. The more he did for me the more I hated him. So it goes, I guess.
* I had still made money though. I had always made money. That was easy. All you had to do was bet on disaster. The end of the economy. The end of the world. That had been the last thread connecting me to humanity. Suddenly I’d lost even that.
* There is this weird thing in Japanese culture where people won’t tell you if they are pissed off with you, at least not directly. What they will often do, instead, is to manifest physical pain in themselves... So what do you do then if someone asks you to hang out on Saturday, and you have a hot date on Saturday? Do you say no? Of course not. What you do is you tilt your head to the side, and you grimace and you sharply inhale through your teeth, as if afflicted with toothache. The other person, seeing your sudden pain, understands this to be no and backs off. <> Hisa started doing this constantly. The problem was, I didn’t understand. I’d put my feet up on the table and Hisa would hiss like I’d stepped on his foot. I’d turn and look at him, confused, and then try and nod off. Hisa would contort his body and breathe out really throaty and slowly, as if pulling an arrow from his back like the fucking Japanese Saint Sebastian. I’d raise one eye and look at him concerned. Continually failing to transmit his displeasure, Hisa would up his game again and again, to the point where he looked to be experiencing total organ failure.
Touch her on the arm. Ask her to go with you, over there, to that corner. You take her home. Bam!” <> I had not requested this lesson, but I appreciated it, even if only for its pointillistic style.
Arthur paused so that he could reload an extra-loud laugh.
“No! They cannot! This is Japan! There are rules! It is not allowed to break any laws.”
“Kousuke, I think not breaking laws is a pretty fucking international rule mate, and that hasn’t fucking stopped them, has it??”
Kousuke was angry, he was furious. He carried it in a bottled up, invisible way that’s at home in his country and mine.
“You must record it. You have to record it. Buy a recorder. Make him say it again.”
“Why the fuck did they ask me to apply then?” <> It’s a stupid question, because the answer was obvious. They did it to show me I was trapped.
I broke up with the Japanese girl that weekend. I wasn’t having another fucking girl watch me with tears in her eyes as my life turned to ashes and bone. I started running around the palace again. Get all the fat off, all the fucking fat off. Cut all the fat off that isn’t even there. Cut off everything that you don’t need.
The confluence of these two separate occurrences—the Slug’s firing and my personal descent to a new layer of insanity—mean that I have no way of knowing who won my freedom. Was it me? Or was it the Slug?
Maybe I did outplay Citibank, maybe I outmaneuvered them. Maybe I really did play a great game. Or maybe I didn’t do any of that. Maybe I just kept getting up, like handsome Paul Newman, and kept getting punched in the face. How do we ever know which of our wins, and which of our losses, were from luck, and which ones were from skill? <> And trading is like that, too, isn’t it? Sure, I made money in 2011, and 2012, by betting on the collapse of the global economy, the slow but constant and certain collapse of living standards for ordinary people, for ordinary families, the descent of hundreds of millions of families across the world into inescapable poverty, and sure that did actually happen, in the real world, but, in the end, does that mean I was right?
