Gary Stevenson and herd mentality

FT expose tells us a lot about society

Which of these would get you more YouTube followers and media attention: saying “I was the best fucking trader in the fucking world and I’m the guy that calls it right every fucking year” and now listen to my views on income inequality or “I was a good trader but because I was junior with risk limits I couldn’t make as much as my colleagues and most of my P&L was captive flow because of my seat at the biggest FX bank in the world”?

Robert Smith aka Bond Hack’s expose yesterday on Gary Stevenson was great but what was better was the comments section of the FT article. If you had never heard of Gary Stevenson, reading the comments section you could be forgiven for thinking this was like talking about eating cats and dogs in Springfield!

I never knew the comments section of newspapers existed until last year but FT Alphaville’s piece yesterday “Gary Stevenson claims to have been the best trader in the world. His old colleagues disagree - What is the truth behind the inequality campaigner’s Citigroup memoir?” went viral and the 640+ odd comments are a good perspective into why. Of course, a good position on the FT website always guarantees clicks but this piece was the most read on the FT overnight.

Many of the rants went along the lines of this was an FT hit job and did not in any way undermine Stevenson’s income inequality cause. The most entertaining of which included readers accusing the lowly paid journalist of being a private-school educated (not true) corporate fat cat that was going after a poor (cough…multi-millionaire) Stevenson.

The irony in this was the FT gave Stevenson softballs earlier this year, lots of publicity to talk about his income inequality crusade, even putting his book on the shortlist for their Book of the year. Hardly, the sort of thing you would do in a paper wide organized character assassination. The even bigger irony is that UK journalists tend to be quite left wing in their views and certain senior City folk have been critical of this and how the FT is so far left of Wall Street media. It’s hardly Fox News!

But alas I digress. To summarize the comments section it really felt like a concept Robert Shrimsley wrote about in the FT late last year referring to people’s political stances as the “album culture”. Essentially people like to be associated with a herd and this involves buying an “album” of views and not lots of “singles” to use a music analogy….“Each cause necessitates accepting the other parts of the agenda at face value.”

It can be true that Stevenson deserved some of the adoration from the UK media over the last year, but someone finally asking the basic question, how on earth could Stevenson be Citigroup’s most profitable trader with a P+L of $35m, was also completely fair!

Having worked close to trading desks throughout this period and also working for the world’s largest interdealer broker the answer was obvious to me. But Rob did his homework and got a huge number of sources and the global head of FX on the record to create a a very powerful piece.

Does it hurt Stevenson’s credibility as a messenger. In my view, yes as it was such an implausible statement to start with that anyone knowledge about finance would have doubts about his character.

At the same time, do I blame Stevenson? Not at all. He exaggerated and it was up to society to either call it out or not care. But it makes you ask other questions:

Does Stevenson’s book give outsiders a good idea of how trading works? It was a moment in time but anyone involved in trading knows how much it has changed since the 2009-2011 period. Massive regulation. Massive fines from Libor and FX rigging. Thousands of additional compliance and risk people. A shift away from proprietary to customer flow trading. A shift away from manual to algorithmic computer-based trading.

Is Stevenson’s journey unique? I started working on the trading floor of Credit Suisse First Boston in 1998 and there were still many East End boys done good on the trading floor then in equities and in areas like FX definitely a lot more. I worked with thousands of money brokers at ICAP from around the time of Stevenson’s departure and that whole industry was mostly brokers from humble backgrounds - perhaps not all as humble as Stevenson’s but many were.

Is Stevenson a Robinhood? Perhaps. His intentions appear good and its great to see someone like him shake things up. But I found it striking in all his media interviews that he never gave to charity himself. His message on income inequality is correct but is hardly original and having watched his YouTube videos he seems long on explaining the problems and short on solutions, beyond blanket wealth taxes.

But what I find most fascinating about Stevenson is not what his story tells us about him but about the rest of us - what does it say about society? It reminds me of something that made Yuval Noah Harari famous - his arguments about how humans like “story-telling” and myths are the cornerstone of civilisation.

Why didn’t society and the media ask the basic question Robert Smith did a long time ago. Of course, you could say it has no relevance to his income inequality crusade which is noble but then again, what does the book really have to do with articulating and giving solutions to the income inequality problem?

Humans move in herds and Stevenson is a true Robinhood of brand building - becoming big on YouTube primarily in the UK which meant the traditional media had to jump on the bandwagon. Again, the geographical breakdown of Stevenson’s brand is fascinating. A huge book launch in the UK with an epic publicity machine but in the largest financial and book publishing market in the world the United States of America he received virtually no media coverage. The New York Times were pretty negative and stated his claim of being the biggest trader in the world was not plausible. The Wall Street Journal didn’t mention him at all. There was very little else written in other publications.

If I was Gary Stevenson, I would be pitching for a weekend “Lunch with the FT” slot. Perhaps Robert Smith could take him to Nando’s - which is one taste point I agree with Gary on - Nando’s is good ROE…if only more of our brokers at ICAP had been taking their bank trader clients to Nando’s our profits would have been higher!