London, the week before Christmas, 2007. Seven days to track the lives of seven characters: a hedge fund manager (John Veals, character in below excerpt) trying to bring off the biggest trade of his career; a professional footballer recently arrived from Poland; a young lawyer with little work and too much time to speculate; a student who has been led astray by Islamist theory; a hack book-reviewer; a schoolboy hooked on skunk and reality TV; and a Tube train driver whose Circle Line train joins these and countless other lives together in a daily loop.
So for a time in the late 1980s and early 1990s, Vanessa Whiteway had been on the edge of the financial world and had seen how it transformed itself.
The essential change seemed to her quite simple: bankers had detached their activities from the real world. Instead of being a `service' industry - helping companies who had a function in the life of their society — banking became a closed system. Profit was no longer related to growth or increase, but became self-sustaining; and in this semi-virtual world, the amount of money to be made by financiers also became unhitched* from normal logic.
It followed, Vanessa thought, that the people who could flourish here must themselves be, in some profound and personal way, detached*. They could have no qualms* about the effects of what they did; no cares for the collateral impact although, to do them justice, they did take precautions to minimise the possibility of any contact with reality; indeed the joy of the new products was exactly their magical self-sufficiency*, the way they appeared to eliminate the risk of any final reckoning*. However, it remained necessary for these people to have — or to develop very quickly — a very limited sense of 'the other'; a kind of functional autism was the ideal state of mind.
And in addition to this, there must be a passionate faith: they had to believe that theirs was the true system and that earlier beliefs had been heretical*. Where there were doubts, they had to be excised; where there were qualifications, they needed to be cauterised. A breed of fanatic was born, and Vanessa saw them with her own blue eyes. She met them at off-site bonding sessions* in Florida, at charity dinners and — dog-tired and wind-burned at the end of golfing weekends in Scotland. Although she wasn't there for the lectures or the golf or the drinking, and glimpsed them only at the lobby or the airport, she could tell that these loners had reinforced one another's beliefs over the three days away; that by the end of their exhausting rituals they were reinvigorated in their faith convinced they needed nothing and nobody beyond their own fantastic circuitry*.
What intrigued Vanessa about John was how easily he had fitted into the required psychological profile. To hear him talk of his North London childhood, you would have foreseen nothing so extraordinary; his school performance was unremarkable and his family had neither 'spoiled' nor bullied him. There were no 'formative' incidents* that made him set his face against the world, no early loss or trauma for which he needed to compensate.
In fact, when she thought about John, Vanessa found the whole toolbox of her undergraduate psychology classes to be useless. There was no 'compensation', no subliminal* desires or re-enactments*. What there was, in her view, was a simple and unmotivated collision of two things: the way these new financiers were by nature, and the way the world, for the first time ever, had indulged* them.
Some people thought the crux of it was the invention of some credit derivative* products by a few people at J. P. Morgan; but in fact, in Vanessa's mind, the key was that society as a whole in London and New York had so lost its bearings* that it was prepared to believe, with these analysts, that cause and effect could be uncoupled. To her, this social change, the result of decades of assault on long-accepted norms, was far more interesting than, the quasi-autistic intellects of the people, like John, who worked in the new finance.
Very occasionally, these individuals were compelled to interact with society — most notably when it looked as though politicians might regulate them; then for. a moment they were required to leave their cloister and dirty their hands in the world. The largest cheque that John Veals had ever written was to a political lobbying firm in Washington when he, and the bank for whom he was then working, feared that credit derivatives might be the subject of government regulation. They had contributed $3 million to the fees of the key lobbyist on Capitol Hill.
One other moment came to Vanessa's mind, one other instance when her husband had collided with the old world of obligation and debt that he had outgrown. It came when she accompanied him to a function addressed, quite recently, by the British Prime Minister. What had it been A Lord Mayor's dinner? The opening of a bank's offices in Canary Wharf? She could no longer remember. What she could recall clearly was the way the Prime Minister lowered his voice with the stagey vibrato* that politicians used to convey 'sincerity'* and, congratulating the assembled financiers, had said words to the effect that: `What you have done for the City of London, we now intend to do for the entire British economy.'
She looked at John and thought he was going to faint. All colour had left his face and he was holding hard to the edge of the table. She put her hand on his. At first, she thought he was appalled at the idea that his own circle's understanding of the world was about to be stolen and made public by a man who was not really of their faith.. Later, she understood that the loss of blood was, paradoxically, his way of blushing: of betraying shame.
She had never seen a trace of it again of shame, or doubt, or the embarrassment of reconnection with the world; it was all over in that moment.
And when little Sophie Topping asked her if she still 'loved' her husband, it was not a question that Vanessa felt she could answer. How could you `love' such a man? `What makes him rick?' 'What does he enjoy?' `When you're alone, what does he ... ?' None of these were questions to which Vanessa could give an answer, because her husband had long ago migrated to a place where such matters had no meaning.
Source: pp. 145-149 from:
* unhitched - losgelöst
* detached - abgehoben
* qualms - Gewissensbisse
* self-sufficiency - Selbstständigkeit
* reckoning - Berechnung, Kalkulation
* heretical - ketzerisch
* bonding sessions - Verbrüderungstagungen
* circuitry - Kreislauf
* 'formative' incidents - formende Ereignisse
* subliminal - unterbewußt, unterschwellig
* re-enactments - Wiederholungen
* to indulge - verwöhnen, verhätscheln
* credit derivative - Stated in plain language, a credit derivative is a wager, and the reference entity is the thing being wagered on. Similar to placing a bet at the racetrack, where the person placing the bet does not own the horse or the track or have anything else to do with the race, the person buying the credit derivative doesn't necessarily own the bond (the reference entity) that is the object of the wager. He or she simply believes that there is a good chance that the bond or collateralized debt obligation (CDO) in question will default (go to zero value). Originally conceived as a kind of insurance policy for owners of bonds or CDO's, it evolved into a freestanding investment strategy. The cost might be as low as 1% per year. If the buyer of the derivative believes the underlying bond will go bust within a year (usually an extremely unlikely event) the buyer stands to reap a 100 fold profit. A small handful of investors anticipated the credit crunch of 2007/8 and made billions placing "bets" via this method.
* to lose one's bearings - die Orientierung verlieren
* stagey vibrato - theatralisches Vibrato
* sincerity - Aufrichtigkeit, Offenheit
1. Describe what Vanessa Whiteway noticed about the change in the financial world and its bankers.
2. Although Vanessa being a psychologist, she cannot explain her husband's attitude as to the job he does and to the real world. Why can't she?
3. Explain in your own words what credit derivative products are and what impact they had on the financial world and then on society as a whole.
4. Was John Veals shocked or pleased at what the Prime Minister said to teh financiers assembled in the bank office in Canary Wharf?
5. Why have people become angry at and suspicious of bankers since the financial cisis?