London Broil
A book with an engaging cast spills secrets from the high-pressure world of finance.
A COMING-OF-AGE STORY needs a love interest, a nemesis, a sturdy foundation of adversity and a generous seasoning of youthful rage and yearning.
In “The Trading Game,” Gary Stevenson’s takes place in the world of London high finance — a promising setting. At its best, the book is nicely paced, with an engaging cast of drunkards and neurotics thrown together in Citigroup’s London trading room. You can learn a fair amount about the perils of excessive drinking and the loneliness of early love.
What you will not learn very much about is finance.
And the promise of “The Trading Game” is, implicitly, that while speeding along on Stevenson’s nonfiction romp through London one will eventually unlock the secret of how the rich get ever-richer while sending the global economy down the drain. On this, it does not deliver.
At the start of the story, the 19-year-old Stevenson, a scrapper from the East End whose math abilities have gotten him into the London School of Economics amid a class of Oxford-shirted nepo babies, wins a contest — the “trading game” of the title. The prize is a short internship at Citigroup, where Stevenson’s canny willingness to fetch lunch for the traders wins him another internship, and eventually a position on the London STIRT (shortterm interest rates trading) desk.
Stevenson does a creditable job of explaining just what the desk does: Essentially, traders use “swaps” to bet on the direction of interest rates in multiple currencies. By no means, though, do you need a deep understanding of foreign exchange swaps to appreciate the book.
Or, for that matter, to work on the desk. In Stevenson’s telling, Citi’s London office is populated with traders whose main occupation seems to be competing with one another’s after-hours liquor intake. Each gets a pseudonym and a set of drinking habits. One gets soused at elaborate Japanese banquets; another is prone to relieving himself against the walls of the Bank of England.
The traders have only a rough idea of what they are doing and why, and that’s fine. Their skill is largely guessing what other traders in the market will be doing
and frequently doing the opposite. At the time that the story takes place, mostly shortly after the 2008 financial crisis, they are helped along by the malaise of a world economy that brings central bank interest rates down to zero. That, in turn, means that Stevenson and his mates on the desk can effectively borrow hundreds of millions of dollars one day at a time, for free, and make money lending them out to other banks (the exact mechanism is a little more complex).
With an East End chip on his shoulder, Stevenson picks up what lessons he can from his fellow traders and resolves to be better than any of them. He succeeds, racking up what seems to be the biggest bonus on the desk.
His secret is understanding that interest rates will be close to zero forever, because the world is hopelessly unequal, the economy will always be in crisis and the rich will get richer. Most people seem to be impressed; but then they would be —
it is, after all, Stevenson’s book.
Along the way, Stevenson acquires and breaks up with a girlfriend, nicknamed Wizard, who is not impressed, and keeps telling Stevenson that if he doesn’t like his job he should quit. He can’t quite get himself to take that advice, and having conquered London FX swaps, Stevenson is sent to the backwater of the Tokyo office, and buried under layers of managers. It’s frankly a hard-to-explain transition for a kid who is supposed to have been, as Stevenson claims, Citi’s “most profitable trader” (an unverifiable and eyebrowraising assertion) and makes the reader wonder what might have been skipped over.
Speaking of omissions, there are some. Notably, right around the time that Stevenson worked at Citi, major banks were involved in a scandal around the manipulation of esoteric but crucial interest rates (Libor, for the “London Interbank Offer Rate,” and the less well-known Isdafix). These were exactly the kind of rates that are central to the working of the STIRT desk. Unpacking that might better help explain the extraordinary profits that Ste
venson raked in — more than his broadbrush theory of global inequality.
Should Stevenson have gone there? Let’s be real: The ins and outs of interest rates hold many eye-glazing possibilities. The best books about finance navigate this tricky equation and manage to make that kind of thing gripping. Novels about Wall Street, on the other hand, skip the details entirely.
“The Trading Game” falls somewhere in the middle. As a novel, it wouldn’t quite cut it: The dialogue is frequently too on the nose. And the denouement of the book, in which the action switches from the trading floor to the H.R. office and Stevenson’s efforts to walk away from Citi with his $2 million-something in bonuses intact, isn’t exactly a nailbiter.
I suspect that if Stevenson had told H.R. to shove it and left the money on the table, he might have been able to write a juicier exposé. But there’s a reason that those are exceedingly rare. When the game is done, the insiders tend to have a choice of getting the money, or the story. And the money usually wins out.