The Pained Trader: Markets make the man

The Pained Trader didn't allow Lehman to dull his appetite.

  • By The Pained Trader
  • 13 Sep 2018
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It is a truth universally acknowledged that a man in possession of a good fortune must have somehow avoided losing it during the Global Financial Crisis. Ten years on from the Lehman bankruptcy which catalysed it, I look back now and reflect that I probably didn’t have one before and I definitely didn’t have one afterwards.

The Lehman’s thing was one of those you-remember-where-you-were moments — like 9/11, the death of Diana Spencer, Everton winning the FA Cup, something actually going right in your life or losing your virginity — when you can pinpoint exactly what you were doing when the story broke.

The news had been announced overnight but I read about it on the 5.19 into Waterloo. This I recollect clearly because, at that time, I was in the habit of occasionally meeting Dolores for some early-morning, pre-work jiggery-pokery in the handicapped loo and shower facility on the floor below that was occupied by The Brokerage So Designed So That Normal Things Could Not Happen.

Whichever firm had premises one level lower, they did not start until much later, which made for easier comings and goings and unbridled slap, tickle and sizzle.

That morning, Dolores and I had one such arrangement scheduled and there was no way I was going to allow the largest bankruptcy filing in US history to check my voracious sexual appetite.

I remember logistics became complicated, though, because some colleagues were so taken up with the dramatic developments overnight they had come in early to follow the narrative, and they assumed I had also. The naivety of some market participants never ceases to amaze me. To my shame really, at that unique juncture in economic history, about Lehmans I gave not one solitary jot.

So while stocks and bonds collided, volatility spiked, careers ended and assets were smashed on the trading floor above, just a few feet below my libido rumbled and roared like a Minotaur in its subterranean labyrinth. Market Armageddon above, erotic detonation below. It’s a familiar literary trope to use meteorological features as a metaphor for human events and I am not averse to employing markets to represent some of my own internal commotion. At least, I think it’s that way round. Maybe I project my feelings on to the shares and exchanges I trade. Emerging Markets and I: made for each other.

It’s true, though, what strikes me, reminiscing about this crazy period in markets, is not the seismic, era-defining crashes, the economic mayhem and violent gyrations in asset prices, raging above our heads but the individual melodrama taking place on the ground down here. I know we would all like to think globally in times of a crisis like that but the human instinct (mine at least — I accept it may not accurately reflect the mindset of the rest of mankind and for that we should all be truly grateful) is to reduce everything to a personal level because that is all we can understand. It might have been a universal trauma, but it was experienced in the particular.

I became especially expert at hearing or reading yet another headline that heralded the crack of doom for the human race and then managing to break it down into what it meant for me on a miniature basis.

If Fannie Mae and Freddy Mac were going under, I was able to compute what this meant in turn for the US stock market, the dollar, emerging markets, Russia within an EM context, the Brokerage So Designed So That Normal Things Could Not Happen, the equity broking department within that bucket shop and then, finally, little old me. Of course, pretty much everything that went bust or malfunctioned had consequences for me that ranged from the merely bearish to the catastrophic and at the time I was utterly incapable of taking a wider perspective. It was just a long, existential struggle throughout the GFC’s winter of discontent, fought in sucking mud, the combat brutal and hand-to-hand.

You might have thought a small Russian brokerage would have been a good place to hide out through that banking holocaust, but it was not. It felt liken the Eastern Front in 1942.

Of all emerging markets, Russia was the most disastrous and the most dysfunctional, as the government and the exchange tried to stem the haemorrhage by simply suspending the market for brief periods, then whole sessions and then for several days at a time.

Counterparty risk became a huge issue for dealing and, in times of uncertainty, a two-bob shop from Moscow who could not have resembled cowboys more if they had been wearing chaps and ten-gallon hats, was very low down on everyone’s list as a suitable trading partner. It happened then, that during one of the most intense periods in stock-market history, amid the wild swings, once-in-a-lifetime moves (now happening every 15 minutes) and record-breaking turnover, my market was very often closed — and even if it were open, I was shunned like the leper’s bell. My days could be characterised then as frenetic inertia. Turboparalysis.

I had dinner last night with an old EM sparring partner who was plying his trade at Lehman when the ship went down. He told me two things I thought were fascinating. First, that when it became apparent there were no lifeboats, those operating in emerging markets were more phlegmatic and took things in their stride more readily than their Developed counterparts, who struggled to adjust to rapidly shifting reality. EM boys were more au fait with a shitshow on jet skis. Second, he reminded me that the man heading up Lehman at the time was Dick Fuld. If, like me, you are a believer in nominative determinism, then, clearly, there was only way that Lehmans could end.

If late autumn is warm, after grapes are harvested, vines can sometimes be fooled into attempting a second flowering. It dreams of renewal and fruit but, of course, it never works out. Our dreams make us, at once, glorious and ridiculous.

I thought I had made it through the nuclear winter of the GFC but on the last day of March, I was taken out by HR, like Wilfred Owen was by a sniper a week before the Armistice at the end of WWI. It marked the very nadir of asset prices. I never forgot that feeling, of almost having survived, before succumbing to the inevitable.

The past is always with us and the 10th anniversary of that tectonic event coincided almost with Tuesday’s commemoration of the attacks on the WTC in 2001. I had my own private 9/11 on Tuesday and knew a sadness so complete all subsequent sadness will be its junior.

A decade after Lehman, I’m still here and the ex-Lehman guy toasted my survival skills last night and congratulated me on my longevity. I clinked glasses doubtfully. You can put cherries on a turd but that doesn’t make it a cake.

  • By The Pained Trader
  • 13 Sep 2018

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 59,389.63 191 8.32%
2 JPMorgan 58,294.01 209 8.16%
3 Barclays 49,613.60 160 6.95%
4 Bank of America Merrill Lynch 42,095.04 147 5.90%
5 Deutsche Bank 38,720.01 140 5.42%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Bank of America Merrill Lynch 6,045.16 4 18.58%
2 BNP Paribas 1,742.18 7 5.36%
3 Credit Agricole CIB 1,539.94 8 4.73%
4 MUFG 1,257.24 4 3.87%
5 SG Corporate & Investment Banking 1,165.08 6 3.58%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 UBS 998.25 3 13.45%
2 Citi 693.55 2 9.34%
3 Morgan Stanley 572.72 3 7.72%
4 Bank of America Merrill Lynch 509.34 3 6.86%
5 Jefferies LLC 409.89 4 5.52%