Monday, February 16, 2009

Wall Street Was Giving Us the Finger

Somehow, I don’t ever seem to have posted about the magazine Trader Monthly. It came to my attention a couple of years ago when a friend of mine had to do some work for them, and I was kind of amazed (but kind of not) that such a magazine existed: basically, the whole point of this magazine was to offer young obnoxious Wall Street guys expensive things to spend their money on– the cover would always feature a Ferrari, or a yacht, or an expensive watch, etc… oh yeah, and some babe fondling said expensive object and/or Mr. Big-Swinging-Bonus himself.

The magazine was folded last week– not surprising in this economy, but perhaps not because of this economy. In today’s Wall Street Journal, Thomas Frank offers this fond appreciation of the dearly departed:

Wall Street Mocked American Values

Just a few years ago… the bonus cognoscenti at Trader Monthly depicted [Former Merrill Lynch CEO John] Thain as something of a piker. In an article that began with the sentence, “What, did somebody forget a zero?” they sneered at Mr. Thain’s “reported compensation,” which they claimed was $6 million for 2006, back when he was CEO of the New York Stock Exchange.

What was $6 million in those days? Remember, 2006 was the year of “the Biggest Bulge Ever,” as the magazine tastefully put it, when “the bonus pool increased to a size almost beyond comprehension.” That was the year that Goldman Sachs famously distributed $16.5 billion to its employees, and if you were one of the lucky ones, Trader Monthly — “See It, Make It, Spend It,” was its slogan — stood ready to help you figure out how to blow your share properly, conspicuously, flamboyantly.

Oh, there were cars: Lamborghinis, Bentleys, Ferraris, Maseratis, sometimes described in the magazine’s characteristic tone of flippant indulgence. There were airplanes, reviewed and rated in a column specifically dedicated to that purpose.

There were Scotches, including, in the “Bonus Guide” for 2008, a $20,000 bottle of Johnnie Walker. There were watches, mechanical ones of course, and among the most desirable were the ones with transparent faces, presumably so the little gears were visible and everyone knew the timepiece was for real.

Reading through back issues of the magazine, which was published in Europe with distribution help from The Wall Street Journal Europe, one does not get the sense that its trader readers aspired to live this way because they were jolly bon vivants. Quite the opposite. At one point in its intermittent pursuit of the best possible record player, for example, Trader Monthly described what it claimed to be a $300,000 turntable as “a huge middle finger to everyone who enters your home.”

If you didn’t understand why someone would want to greet their guests in such a way — and as a nation we certainly didn’t — then you didn’t understand what it meant to be a trader.

I can understand that there might be some exaggeration going on, but there is just something wrong in a culture that celebrates being an a–hole.

The magazine’s panting worship of the truculent personality culminated in a bizarre spectacle it arranged in November of 2007: trader boxing. Before an audience chewing steak and guzzling luxury vodka, the furious fists of bond traders connected with the jaws of corporate vice presidents.

And to those who wondered why the nation should heap up its wealth at the feet of such pugnacious vulgarians, the magazine gave the usual answer: Traders prospered because they delivered.

“The rewards have become so astronomical that the competition for coveted entry-level trading positions has become extremely fierce,” mused the magazine’s founder in the gilded year 2007. “Or is it the other way around — the talent entering the market is so substantial that it has pushed the returns and, therefore, the rewards to levels once considered unthinkable?”

Although he didn’t mention it, there was also a third possibility: that much of the financial engineering, the fancy new derivatives and balance-sheet legerdemain, was part of a bubble that would one day burst. That many of these hustlers, gamblers and pugilists were helping to misallocate capital on a fantastic scale. That with or without the aid of a $300,000 stereo component, they were telling America just what they thought of it.

Well, I guess now a lot of Americans are giving them the finger right back! Not that any of these guys will probably care…

Read more here: Wall Street Was Giving Us the Finger

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