AVARICE

Trading Places
By Cari Lynn, A&S '97 (MA)

In 1986, market speculator Ivan Boesky delivered a commencement speech at University of California at Berkeley's School of Business Administration, where he, in what seemed an impromptu gesture, added the now infamous lines: "Greed is all right, by the way. I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself."

A year later the lines were resurrected in the movie Wall Street and inspired a whole new generation of die-hard capitalists. I'd spent a couple of years on the futures exchange trading floors in Chicago, and, to my surprise, many traders recited the Michael Douglas monologue as if it were their personal mission statement: "Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms, greed for life, for money, for love, knowledge, has marked the upward surge of mankind." I, too, had seen the movie, only I'd been under the impression that Gordon Gekko was the bad guy, that there was a reason he'd been named after a lizard.

On the trading floor, I'd had the surreal experience of watching greed embody people. On one of my first introductions, a typical trader — a male in his early 30s, golf shirt, khakis, sneakers, and the tell-tale brightly colored polyester trader's jacket — was extolling his philosophy of futures trading to me. He emphasized his enthusiasm with dramatic hand gestures: "I make money on the Up," he said, swooping the air with his arm. "And I make money on the Down." He sliced the air the other way. His eyes were glowing. It was the glow of making thousands of dollars in a minute flat. The glow of hitting a million a year — when you're 25 years old. It's the Life is Good When You're Me glow. And many traders had it.

But what the trader didn't admit to me at that moment was that when the glow was not there, when you'd bet that the market was going to rise, but instead it plummeted, when you lost money on the Up, as well as the Down, that's when you were caught. And the money always seemed to disappear faster than it had come to you. And then, the only dramatic gesture you were making was the invisible slit to the throat. For every glowing eye, there is an accident site. And the trader is bleeding money.
As a freelance journalist who wanted to be writing hard-hitting pieces, but whose articles typically ended up in women's magazines, I suppose my fascination with the trading floor began with a romanticism along the lines of "What's a nice girl like you doing in a place like this?" I was the opposite of everything a trading exchange embodies — soft-voiced, rather non-materialistic, rather introverted, over analytical, broke, and female. Yet, there I was, in the midst of the antitheses of everything that made me feel comfortable and everything I defined as my ideals. And therein lay the attraction.

I was gripped, just as thousands of others had been gripped. I'd heard the stories — the tale about the cab driver who was always shuttling people to the exchanges and decided one day to see what it was all about. In an instant, it was bye-bye yellow taxi. He got himself a job as a runner, worked his way up to be a trader, and was now a millionaire several times over. Substitute "cab driver" with any profession — dentist, truck driver, lawyer, teacher — and the stories will pop up of people who impulsively chucked stable, often lucrative, careers for a tilt-a-whirl ride in trading.

With no background and no prior interest in finance, I suddenly found myself tuning into CNBC, buying books about the futures market, and religiously reading the Wall Street Journal, Forbes, Fortune, and The Economist.

One of the first things that struck me was a line from a pamphlet I'd picked up at the membership office of the Chicago Mercantile Exchange. It read: "Investors trade futures for only one reason: to make money. They don't always succeed, but they try." I couldn't help but marvel at the boldness of it — no apologies, no sugar coating, we're in this for the money and that's it! I reread the line, trying to get comfortable with the fact that, apparently, this was not just an OK ideal to hold, but an OK one to promote as well. I was five minutes into my new studies and already I was questioning principles. Of course I knew the job was about making money — after all, that was my motive, too — it just felt odd to admit that it was only, only about money. But I needed to get used to it, besides, as one of the guidebooks informed me, one of the worst habits a trader can have is to overanalyze. From here out, I told myself, no more thoughts about morals or ethics; no more thoughts about all the parts of the world that were destitute, or all the people who didn't have money for food. No, from here on out, money would be like points in a game, and at the end of the day, all that would matter would be the final score.

A lot of traders viewed it this way — only, they played hard, and their idea of "points in a game" was equivalent to the final minutes of the Superbowl. The atmosphere on the trading floor was so rough that a common saying was: If you have a heart attack in the trading pit, the others will step on you. Or, at best, do nothing. I had eyewitness accounts of traders grabbing their chests and slumping to the floor while no one around even stopped to look. Perhaps the most telling confession was from a trader in his mid-20s, who told me: "Money makes you do stuff you wouldn't otherwise do."

During my research phase (mind you, most traders don't have a research phase), I caught a short documentary about the history of the market that summed it up this way: "Charles Dow put us on the wildest roller coaster. We laugh nervously all the way up, we scream like hell all the way down. And then we line up to do it again." This was around the time that I had learned just enough about trading to start becoming scared.

In theory, the market should be determined by supply and demand, and perhaps it used to be, but now it's about two things: good old Greed and Fear. Greed seemed to come stitched into the very polyester fibers of a trading jacket. Even people who weren't necessarily greedy in any other aspects of life, once they slid their arms into the trading jacket, once they affixed their badge with their acronym, the transformation was, dare I say, inevitable. Fear was the only force that offset Greed, and the powers vie against each other like a tug-of-war. As a trader, it's like pushing your right hand against your left. Greed and Fear. Fear and Greed. Will one arm ever overpower the other? There most definitely is an art to trading, and it lies somewhere between these two emotions.

Trading is an ode to true capitalism. And, to many, an ode to self-destruction. The traditional welcome to this world is telling: You're handed a roll of toilet paper and told, "This place is not for weak stomachs."
I wish my tale had a lucrative ending; however, as is probably obvious, I'm not cut out to be a trader. But, in the two years I spent on the trading floor, I came to really understand how money — just the very allure of money — could, indeed, make people do very strange things.

Not long ago, while grabbing a drink with some friends, I saw some familiar faces at a nearby table of about a dozen clerks and traders. They were living it up — young guys with bulging muscles and charming smiles and spikey-flip, gelled-up haircuts. They all wore silky shirts, collars opened to reveal single gold chains around their necks.

I was familiar with this group — they'd all grown up within several blocks of each other in a gritty neighborhood on the outskirts of the city. The oldest of the bunch had gotten a clerking job at the Chicago Mercantile Exchange, become a trader a couple of years later, done extremely well, and had recruited his childhood friends to follow the money trail. The group was polishing off vodka (I had to wait 20 minutes before a waitress appeared to say the bartender was behind and it would be a while), and when more bottles promptly arrived they showered their cocktail waitress with a round of applause. They were as friendly as they were flirty — and it was all with an air of good fun. That's what life was about for them: Let's have fun! It was almost this reverberating buzz — I'm making cash, I'm young, and I'm living it up! It was refreshing, in a way, to be around people who had grown up in rough, working-class city outskirts, and who were thrilled with the idea that they now were making the money and enjoying the money — and enjoying it with the kids from the old neighborhood. They were throwing it around, exactly like they dreamed when they swore they'd never slave the way their fathers did, and that they'd provide all the things their mothers had stopped wanting long ago because what was the point of wanting something you knew you'd never get. And now they were doing it. They were 22, 24, 26 years old, and they were doing it. God bless trading!

But I knew it would only be another couple of years or so before all that changed. Before making money and spending it got old. Before what was once enough money, was suddenly no longer enough — not because you'd spent it, but because if you had made crazy money last year, then you should be making double-crazy money this year, and if that wasn't the case, if the money was not exponentially growing, then there was something wrong. And hey, it wasn't exactly pleasant to learn that the guy who stood next to you in the pit was making more money than you — and so was that guy there, and that guy over there, and you knew you were a better trader than that jerk over there, but dammit, you heard he was making more than you, too. You should be making more, you deserved to be making more, you WILL make more, you promised yourself. No matter that you were making nearly seven figures a year. You were 29 years old for goodness' sake, you should have broken the million mark already. Half these other bozos in the pit had.

Maybe there was something wrong with you. Were you not on the ball? Not quick enough? Not gutsy enough? You would have to change this. Who cared if that meant you'd be so exhausted that when you weren't on the trading floor all you'd want to do was sleep for days? Who cared that when you did finally sleep you'd be haunted by terrible dreams that the market kept going against you and that you couldn't get out? Who cared that all of your personal relationships would suffer because you were so tense and grouchy all the time? None of that mattered because you absolutely had to prove yourself. It didn't matter that, materially, you already owned just about everything you could want. No, you needed to make more to prove you weren't a loser. You'd do it. You had to.

It also didn't matter that it wasn't fun anymore.

In this world, there was always someone who was better than you, faster than you, richer than you. And even if you were pretty damn good, fast, and rich, well, there were plenty of examples — most of whom could be found tossing back shots at the closest bar to the exchange — of how easy it was for all of that to just disappear.

 
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