The Trading Game

1. From paper routes to Wall Street: The unlikely rise of a trader

"When I was very young, my parents gave me a pound coin, and sent me to the Esso garage to buy lemonade. At some point in the trip, I dropped that pound coin, and lost it. In my memory, I searched for that pound coin for what seemed like hours—crawling under cars, scrabbling in the drains—before returning home, empty-handed, and in floods of tears."

Humble beginnings. Gary Stevenson's journey from a working-class background in East London to becoming one of Citibank's top traders is a testament to his ambition and intelligence. Growing up in Ilford, he was always acutely aware of the importance of money, starting with selling penny sweets in school and delivering newspapers.

Breaking into finance. Despite his unconventional background, Stevenson managed to secure a place at the London School of Economics. Through a combination of academic excellence and a knack for gaming the system, he won a trading competition that landed him internships and eventually a full-time position at Citibank.

Rapid ascent. Within a few years, Stevenson became one of Citibank's most profitable traders globally, making millions for the bank through his insights into interest rates and economic trends. His success was fueled by a unique perspective that combined street smarts with academic knowledge.

2. The allure and pitfalls of high-stakes trading

"No longer could we lend dollars at 2 percent and borrow them back at zero. We'd be lucky to get 1 percent."

Adrenaline rush. The world of high-finance trading is characterized by:

• Enormous potential for profit
• High-pressure decision-making
• Constant market analysis
• Competitive atmosphere

Psychological toll. However, the demands of the job can lead to:

• Chronic stress and anxiety
• Substance abuse
• Deteriorating physical health
• Strained personal relationships

Ethical dilemmas. Traders often face moral quandaries:

• Profiting from economic downturns
• Exploiting market inefficiencies
• Balancing personal gain with societal impact

The trading environment fosters a culture of excess and risk-taking, where success is measured solely in monetary terms. This narrow focus can lead to a distorted worldview and a loss of perspective on broader societal issues.

3. Unmasking the illusion of economic recovery

"Listen, you're not as smart as you think you are. I see you pick out the highs and the lows, but it isn't from genius. It's out of instinct for you. For you it's a game."

Economic reality. Stevenson's observations led him to a controversial conclusion: the post-2008 economic recovery was largely illusory. Despite mainstream predictions of normalization, he bet that interest rates would remain near zero indefinitely.

Structural issues. His analysis pointed to deep-seated problems in the global economy:

• Growing wealth inequality
• Declining spending power of the middle class
• Accumulation of assets by the wealthy
• Increasing household and government debt

Market disconnect. Stevenson noticed a paradox: bad economic news often led to rising stock markets due to expectations of continued monetary stimulus. This disconnect between financial markets and the real economy became a source of both profit and moral conflict for him.

4. The dark side of success: Moral compromises and inner conflicts

"I knew straight away I would fight. It was not a decision, it was never a decision. Sometimes you have to look the devil in the face."

Ethical dilemmas. As Stevenson's success grew, so did his internal struggles:

• Profiting from economic hardship
• Participating in a system he increasingly saw as unjust
• Balancing personal gain with societal impact

Cognitive dissonance. The trader found himself torn between:

• The allure of wealth and status
• Growing awareness of systemic inequalities
• Desire for meaningful change

Personal toll. The moral compromises and internal conflicts manifested in:

• Deteriorating mental health
• Strained relationships
• Loss of sense of purpose

Stevenson's journey illustrates the psychological cost of participating in a system that one begins to view as fundamentally flawed. His growing disillusionment with the finance industry set the stage for his eventual decision to leave.

5. Inequality: The hidden cancer of the global economy

"It's inequality. That's the only thing that matters. Trade on that you'll be a millionaire."

Root cause. Stevenson identified growing inequality as the fundamental issue plaguing the global economy:

• Concentration of wealth in the hands of the few
• Erosion of middle-class purchasing power
• Increasing debt burden on ordinary people

Vicious cycle. He observed a self-reinforcing pattern:

• The rich accumulate assets
• The poor and middle class accumulate debt
• Interest and rent payments flow from the bottom to the top
• This further concentrates wealth, exacerbating the cycle

Economic implications. This growing inequality led to:

• Persistently low interest rates
• Stagnant economic growth
• Asset price inflation (e.g., stocks, real estate)
• Increasing financial instability

Stevenson's insight into the role of inequality in shaping economic trends became his key to trading success, but also fueled his growing disillusionment with the finance industry.

6. The trading floor: A microcosm of human nature and power dynamics

"Every trader has a pain threshold. Every trader has an amount they can lose. You could have the best trade in the world, but if you hit your pain threshold, it doesn't matter, you'll lose all your cash."

Survival of the fittest. The trading floor is a high-pressure environment where:

• Quick thinking and decisiveness are rewarded
• Emotional control is crucial
• Hierarchy is based on profit generation

Power plays. Various dynamics shape relationships:

• Competition between traders
• Manipulation by senior management
• Exploitation of junior staff

Coping mechanisms. Traders develop strategies to handle stress:

• Substance abuse
• Escapism through extravagant lifestyles
• Emotional detachment

The trading floor serves as a microcosm of human behavior under extreme pressure, revealing both the best and worst aspects of human nature. It's a place where fortunes are made and lost, and where the boundaries of ethics are constantly tested.

7. Escaping the golden handcuffs: The struggle to leave a toxic industry

"I've worked on this desk for twelve years. And I've never even once gone to that canteen. We eat. On. The desk."

Trapped by success. Stevenson found himself in a gilded cage:

• High salary and bonuses
• Deferred compensation schemes
• Status and lifestyle expectations

Internal conflict. The desire to leave clashed with:

• Fear of financial loss
• Uncertainty about alternative careers
• Pressure from colleagues and management

Corporate tactics. The bank employed various strategies to retain him:

• Threats of legal action
• Emotional manipulation
• Promises of future rewards

Leaving the finance industry proved to be a complex and emotionally draining process, highlighting the powerful hold that high-paying, high-status jobs can have on individuals, even when they recognize the toxicity of their work environment.

8. The human cost of high finance: Mental health and relationships

"I hadn't had three months free since I'd been nineteen. I spent most of that time floating around Tokyo in a daze."

Mental health toll. The high-pressure environment led to:

• Chronic stress and anxiety
• Depression and burnout
• Substance abuse issues

Relationship strain. Personal lives suffered due to:

• Long working hours
• Emotional unavailability
• Misaligned values with partners

Identity crisis. Many traders experienced:

• Loss of sense of self
• Difficulty relating to non-finance people
• Struggle to find meaning outside of work

The story highlights the often-overlooked personal costs of working in high finance. Despite the material rewards, many in the industry find themselves grappling with severe mental health issues and struggling to maintain meaningful relationships.

9. Confronting corporate power: David vs. Goliath in the banking world

"What do you think? What do you think when you are twenty-six years old, one of the most profitable traders in the world, for one of the world's biggest banks, having come from nothing, having come from fucking £12 a week paper rounds, and a man who was once your idol sits there, across a table from you, over two bowls of ramen, and looks in your eyes and says to you, 'Sometimes bad things happen to good people. We can make life very difficult for you.'"

Power imbalance. Stevenson found himself pitted against a global corporation:

• Vast legal and financial resources
• Influence over regulatory bodies
• Ability to shape public narrative

Personal risk. Standing up to the bank involved:

• Potential loss of deferred compensation
• Threat of legal action
• Damage to professional reputation

Ethical stand. Despite the risks, Stevenson chose to:

• Document threats and misconduct
• Seek legal and medical support
• Refuse to be silenced or intimidated

The confrontation between Stevenson and Citibank illustrates the enormous challenges individuals face when standing up to powerful corporations. It highlights the importance of documenting misconduct and seeking support when confronting systemic abuses in the workplace.

Last updated: August 2, 2024