May 20, 2013 § Leave a Comment
I remember my first interview at KKK Bank (as I like to call it now, though it doesn’t exist anymore).
There I was 23, straight out of St Andrews, wearing my Armani overcoat, the hope still shining bright in my eyes. For those were the days when bankers could actually walk around and tell people to “Get out of the way, I’m a banker.”
Sadly those days are long gone, for all the great professions– from lawyers to politicians, we are too scared to admit it, but they no longer care. Far be it to say that I go out and kill people for my profession! But no I am the subhuman scum!
So I went in my shiny shoes and polished back hair, looking every bit like Alec Baldwin c. GGarry GRoss, up to the 13th floor. I walked in to find this nerd, all spectacles and front teeth, couched behind the desk reading his copy of the FT. At first I thought about of doing the old Oxford joke and setting fire to his paper as he read, but then thought better of it. After a few seconds he put it down and grimaced at me.
“Tell me about the Greeks,” he said.
Of course I thought he was joking so replied – “Swarthy wop. Doesn’t like to pay tax.”
The man didn’t laugh unfortunately. He said “Don’t waste my time, tell me about the Greek alphabet?” “I said are you crazy I don’t speak Greek.”
Well I was escorted out that time. What I didn’t know was that that guy, apart from being a Geek, was also fluent in the Greeks. He was also Greek (I should’ve checked his card, Eugene Papaphilippopulous). So what are the Greeks and why should we care? Well here is a simple guide for grads, care of my good friend Wannop.
Explaining the Greeks–
Alpha: the word we use when we make money.
Beta: When we don’t make any money, but nor does anyone else
Charlie: A trader’s ex-best friend
Gamma: Second order derivative. A measure of convexity. Curvature. Makes me think of the bird I met at Maddox the other night. Her name might even have been Gamma. Wait that can’t be right
Delta: the first derivative. How the price changes with respect to changes in the price of the underlying. Used colloquially by derivatives geeks to refer to the probability of something happening. Like what’s the delta on me hooking up with Gamma tonight?
Theta: The rate of decay of the asset with respect to time. Some assets decay away very rapidly. Like Gamma. Her value rapidly disappears after I’ve taken her home. It’s always the way with these eastern European chicks. On the other hand, French birds look after themselves. Much less theta there.
Rho: Sensitivity to interest rates. Like the lease on that Ferrari that I can’t afford. Rates go up and I’ll be slinking back to the dealer with keys in hand begging for mercy.
Vega. Not actually a Greek letter. Nevertheless referred to by Geeks as a Greek. Sensitivity to volatility.
Vanna: Sensitivity of the sensitivity to volatility with respect to the asset. Or sensitivity of the delta to the vega.
Vomma: sensitivity of the sensitivity to volatility with respect to volatility. What most, right thinking people do after reading that sentence last sentence. What I did last night in the men’s room at Roka after too many Flaming Ferraris
you get the idea.
Greeks? I don’t know! The point is who cares?! You don’t need to know. We have computers to do all these things for us now. We have quants like Eugene
So the next time someone ask you to define the Greeks in an interview punch him in the stomach and walk off. There are better things for us all to be doing.
May 15, 2013 § 1 Comment
Yes I am returned. The last you heard of me I was embroiled in that fearful Nakamura saga which nearly led to my untimely demise and worse, death, some nine-and-a-half months ago.
I pick up the story in the summer of last year.
The hedge fund business had become fraught so I decided, in my insanity, to go back to the bank. Things were different there. Very different.
Compliance officers now monitored everything you did. You weren’t allowed to take the statutory three hour broker meeting. The bosses were all 22-year old Harvard Grads with poor backgrounds (it made them hungrier).
And of course, the worst of all, they cut bonuses. They said we were to live off our basic from now on. So there I was with a making 700k, the same as a fireman. It’s impossible we told them. How can we make ends meet? Several of my colleagues left.
“Hell this ain’t no charity,” shouted Duckdown, the day they announced it. He simply picked up his bowling ball and ran out of there. The last I heard he had set up a charity for native Indians in the rainforest, was making good money out of it too.*
But no, some foolish loyalty prevented me and I stayed at the bank. I stuck it out convinced that things would turn around. I increased my short position to $13bn, sold everything I could. Started hoarding gold (long $15bn). I even had a cache of gold bars in my drawer. I broke all limits. Crashed all stop systems (helped by my old friend Abdul in IT). But nothing happened. There was no break up. Some clown, a Mickey Mouse Italian, decided to backstop the Euro. (Put an Italian in charge and that’s what happens).
Christmas came and went. I obviously had no money so I went home and stayed with the parents in Suffolk (they’ve had to open the place to the public to make ends meet).
I returned in January and grown men were suicidal. Our Japanese office lost 13 guys playing sushi roulette.** Then came the crises– they cut off our internet. Men, grown men, were reduced to tears. The best minds of our generation driven insane.
Finally they got me. Someone had been reading my IM chats. I got a call. The police arrived. It wasn’t so much that I’d built up a huge unauthorised position. But rather that I didn’t know what to do with it.
But the real straw that broke the camel’s back was Eddie, my broker. He grassed me up. I’d been routing all my trades through him, you see. And you know why? Because I felt sorry for him. His wife had leukemia. She’d had a double mastectomy. I felt sorry for the guy! I really did.
But the idiot went out and bought her a spectacular new pair of tits. Apparently he got her a pair of 36dders. Unheard of on a broker’s salary. That alerted the authorities. How could a mere broker like Eddie afford to buy a boob job like that? And that was it– he told them he’d been getting all his trades from me.
In the end I walked out of there with my head held high (it was quite touching really, when the police came round all the traders did that Spartacus thing, except they said “I’m not Tim Green!” So the police led me away).
Four months in chokey is what I got. (I will perhaps recount it some day).
So what have I missed? Well Queen Elizabeth’s still on the throne. Bowie is back (never know if he rhymes with “cow” or “low”). Nuclear war has not happened. And bankers are still reviled. Plus ca change really.
Except now I am returned: things will change.
* Infact the thought ran through my mind. I seriously considered joining an environmental hedge fund investing in resource efficiency. It’s a no-brainer. The returns are massive. I mean consider the shortages in the world– food and water: people are hungry, starving. With all this climate nonsense food and crop prices are only going to go one way. What you need is a niche. Loxley joined one, cornered the Ethiopian grain market. Now every time there was a drought his position went through the roof. Clever. Tells me he hates comic relief.
** Take six rolls of sushi and put a cyanide pellet in one. Men take turns to eat a roll. It’s a very noble way to die. But the Japanese have always believed in self-sacrifice/death before humiliation. Those who are left will actually manage to get a bonus. Real nobility.
May 14, 2013 § 2 Comments
I am returned.
How long have I been out: 9 months. Where have I been: HMP Pentonville. Will I be describing it: Will I fuck.
The Reformed Hedge Funder
PS: It was a truly humbling experience
PPS: I am setting up a fund for jailed bankers. I know how hard it is. If you wish to help please reply at the bottom with your details…
September 4, 2012 § Leave a Comment
As a result of getting too much attention I am going to rusticate this blog.
For those who have been reading it regularly you will realise why. I am taking a sabbatical. I might even disappear completely.
Future posts are for private members only. Please send your requests to:
The Fassbender saga is not complete…..not by a long way.
August 30, 2012 § Leave a Comment
Nothing in this world should ever surprise me. I have lived through it all. I was cool when Lehman went under. I was ice in depths of the Euro crack. I’ve laughed through Libor, sailed through subprime.
And yet now my soul is in turmoil. Why should this be? I am young. Wealthy. Handsome. I work at a hedge fund. I drive a LandRover. I am English. I have everything any man could want. Right?
No. In truth I’ve lost all my mirth. All I wanted was a little mystery in my life. A bit of a Sherlock Holmes adventure. This isn’t what I signed up for.
The facts are this:
1. An analyst called Dorien Fassbender died.
2. I was given the address to a website by a man who knew Fassbender. He also died.
3. I am now being pursued by an organisation who want me to work for and uncover the secret of Fassbender.
Where do I start? What do I spy? Who do I call?
A few years ago I considered giving up banking. My life was a haze. I’d wake up, get into work, lose money and go home. Sure we all lose money– this isn’t really a problem as we’re still getting paid.
The problem was that I had developed a conscience. I started to think about the people who’s money this really was. I thought that somewhere, on the other side of the world, this money would mean something to someone.
It was hard. Try as I might I couldn’t shake off the feeling that this was wrong. And so I left the bank. I stayed at home, wandering the halls of my house in Berkshire. I was probably suffering from depression. I was also drinking too much. It was a funny feeling. Having it all. Then having nothing.
I thought back to my childhood when all I wanted to be was a trader. The tales my father raiding another nowhere company, kicking the bums out and turning it around for a million profit– so inspirational. I used to watch the currency markets and think buy, sell, buy! And more often than not I’d get it right. You know I called Soros before he ever shorted the pound– I knew!
Then I joined the bank. What a kick! My first day being led onto the trading floor, being given a platinum Amex, my Bloomberg, the client account I got (it was 10m, seems ridiculous now!). How thrilling it was. The rush of two bps moving on your every click. I gradually rose through the ranks. Became a star!
And yet, those feelings, that memory, the energy– somehow I’d lost it all. I was listless. Sad. Then one day, lying in bed, I had a revelation. Donald Trump was on the TV talking about condos. It was weird– but I looked at his face and his eyes went all soft. They bore into my own. It was as though he was trying to communicate.
And I heard a voice.
“Tim, you are the end and the beginning. You are the alpha. You are not a layabout. You love money as much as I do. Come my friend. Get up and fucking get back to work.”
The next day at 8.55am my phone rang. It was Mike. My old friend from JP Morgan. He said he had just set up a hedge fund and wanted me with him. Call it coincidence, call it fate, call it a miracle, but I knew then this was my destiny.
And so I said yes. And now look where it’s got me!
August 28, 2012 § Leave a Comment
A bank holiday in London. I’ve been working on deciphering the mysterious website. Who should I call– Lagarde, Monti, Jerry del Kisser? The possibilities are endless. But it’s a big holiday. I’m decided on enjoying my downtime. And I am until things take a turn for the strange….
I am in a bar called Copenhagen, on Denmark Street in London. Young, beautiful and rich…the best of the city. I’ve drunk a cocktail and am musing about the euro crisis when the bartender comes over and places a drink infont of me.
“This is for you sir, our special Bloody Mary,” he says. “From the gentleman.”
“What gentleman?” I enquire, but he’s already walked off.
I look around to see who it could be but can’t identify anyone I know. That blonde-haired Scandinavian man looks vaguely familiar. Or the swarthy Italian? Is he an old school friend? Hold on that Germanic brute– is it Klaus?
Well when in Roma– I take a sip and feel a jolt of nausea rip down my throat. This is real blood. I swallow it nonetheless, so as not to make a scene but I’m annoyed. I’m looking around for the barman when I hear a voice behind me.
“Tad! Tad Aligash!”
I turn. He’s mid-20s, young, slicked-hair, large suit, big smile, all the hallmarks of a Wall Street banker.
“How are you man. Where’ve you been?” he continues oblivious to the expression on my face.
“I’m sorry,” I reply showing off my newly polished set of fangs, “but I think you have the wrong person.”
“Haha Taddd! Always playing the fool.”
He slaps his thigh in jocular, pantomime fashion. As though he is acting. A soft tune comes on the speakers—Moon River I think it is. Something by Sinatra. Or the rat pack.
“Hey man why don’t you come with me.”
“What?” I reply, quite annoyed. “Who are you?”
He turns to me and his smile disappears.
“I recommend you follow me right now.”
I am stunned by the sheer audacity of this man. But the expression on his face is extremely sinister and I cannot help but feel that this is a threat more than an invitation.
He walks and I follow. We go through a small door in the back of the club, down a corridor paved with white tiles and through the kitchen. The smell of fishbones and lavender rises into my nose.
Emerging on the other side we are at a staircase which leads up to a side-room. We enter. The man tells me to take off my jacket and pats me down. Then he tells me to wait. I’m indescribably angry. But show nothing.
Another man comes in. He is older, more sauve.
“Mr Aligash,” he says, a glint in his tepid eyes. “How frightfully brilliant to meet you.”
I am silent.
“Of course. I understand. You’re probably a little tired. Just relax.”
He lights up a black cigarette which smells of mountain herbs (I remember it from the school trips to the Matterhorn).
“Well let me explain. You have been inculcated into a society called les debauchees.”
“You’re utterly crazy. I have no idea what you’re talking about.”
“Now now Mr Aligash. We know about the website. We’ve been tracking it ourselves. It would be churlish of you to deny it.”
“Yeah Tad, c’mon man,” says young Mr Wall Street. “You’re not Max Von Sydow you know.”
I don’t get the oblique reference to Hollywood filmology.
“Look we know who you are. We’ve been taking a close interest in this affair. As have you.”
“Which affair would this be?”
He pauses to drink in the surprise on my face.
He does all the talking now. He tells me they are ‘an organisation.’ They have been following me. They have been investigating the death of Fassbender. They know about the website. They need information.
“We want you to do something for us.”
“And what would that be?”
“We want you to go to the mattresses.”
August 24, 2012 § Leave a Comment
As mentioned previously the Libor scandal has further to run. Newspapers seem reluctant or slow to report this.
The banks are a big short right now.