Derivatives and Debauchery

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The UK Independent recently published fascinating reminiscences by former UBS trader Philipp Meyer about his debauched life as an investment banker. The grotesque extravagance he describes seems straight out of Petronius’s Satyricon.

I put on 45 pounds in my first year at the bank, and, as you might guess, it was not from eating McDonalds. Occasionally I ate stuff like sushi, but mostly it was steak. We went to the good places like Sparks, Peter Luger’s, and the Strip House. We tended to look down on chains like Morton’s and Ruth’s Chris-they were for car dealers or stock brokers, not traders. Regardless of where we ate, we ate in quantity. My standard strategy was to order half a dozen appetisers, plus a steak and lobster, plus a few desserts and much wine as I could drink, as long it was under a few hundred dollars a bottle. Followed by a digestif, typically a 30-year-old port. There’s not any way to justify this except to say I was trying to catch up to my colleagues. We would treat those restaurants like Roman vomitoriums. And it wasn’t the food so much as the wine. Being a junior employee, I couldn’t really order bottles that cost more than a few hundred dollars, but the senior guys could get nicer stuff – Opus One, Chateau Latour. As long as we were out with a client, the bank paid. I remember being stunned the first time I saw a dinner bill for ten grand. But that was just the beginning.

What it boiled down to was austerity for everyone else and rampant consumption for ourselves. I never saw anyone literally set fire to money, but I did drink most of a bottle of 1983 Margaux ($2,000).

The mornings after, with our thousand-dollar hangovers, my colleagues in corporate finance would set up deals and make a few hundred factory workers redundant. I helped build derivatives that funnelled income to offshore holding companies so rich people and big corporations didn’t have to pay taxes. We had lawyers on retainer in the Cayman Islands and Jersey – a quick phone call and it was all set, no more taxes.

Be sure to read the whole piece. It’s a shame that we should have to wait for an insider to detail the depraved excesses of the financial world. Political and investigative journalists have succeeded in penetrating the similar lives of K Street lobbyists and Congressmen, with their private wine lockers at The Capital Grille. Why haven’t we seen more of this from business journalists?

Where else do you see journalism of this quality and value?

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