Idiocy and greed as the City crumbled
Alex Preston secretly felt like a fish out of water in the crazy financial world of the City. But when the crash came, it gave him wonderful material for a novel. Steven Russell hears about life away from the madness
No, it didn’t. After a spell with a Mayfair-based hedge fund from 2001 he had that brief stay at the ill-fated investment bank ABN Amro (“which started imploding within weeks of me appearing – though the two things aren’t connected!”) and then had just over three years with an investment firm. Time marched on. But, underneath, there was always a writer fighting to get out.
Alex was trading credit derivatives on the vast floor of the investment bank when the markets began to falter – “earlier for me than for others: this was mid-2007”. He sensed he was at the centre of something huge, “something that would define not only the bizarre microcosm I inhabited but also the real world . . . I saw the former superheroes around me sitting ashen-faced, their trembling fingers poised over their keyboards, and I wanted to capture this, to open up to a broader world the hubris, the fear, the shattered pride”.
Only one person in his team was over 30 years old – he himself was 27 when the faultlines began widening into crevasses. “I hardly knew my bosses, although one of them recently shot himself, unable to deal with the scale of losses we had run up.”
So he did what a writer does: use the experience as the basis for a story.
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This Bleeding City is his debut novel – written “whilst the financial world unravelled around me” – and won the Spear’s Best First Book Prize.
At heart a love story, it represents “an indictment of the system, and an indictment of my generation for getting so caught up in the bull market nonsense”.
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The central character is young Charlie Wales, a middle-class boy from a dreary seaside town whose desires are awakened by university. He meets the sons of carpet-millionaires and the daughters of commercial real estate tycoons, and he yearns for their glitzy lives.
In London, everything seems possible – including securing the affections of a beautiful French girl. Fast money appears to be the key, and the City holds out that promise.
“This is not an apologia for the City boys. But nor does it portray them as monsters. The book tries instead to show how we fell into these jobs by accident, how little anyone really understood, and how young we all were. The Masters of the Universe were off playing golf and shooting whilst we screwed up the world’s financial system.”
He tells eaman: “It was an attempt to make sense of what was going on and an attempt to highlight something I felt very strongly: that the market was nothing more than the reflection of the sometimes fairly bipolar psychologies of the trained practitioners.
“What I wanted to do was show these spiralling emotional worlds that I suppose any 20-year-old inhabits, and how they were expected to manage billions of dollars of pension fund money at the same time as negotiating fairly complex emotional lives. People would get in with hangovers, or after rows with their girlfriend, and be expected to maintain the kind of weird facade that was the bull market.”
So how autobiographical is it?
“Perhaps quite a bit less than people have suspected. It was a reaction to the fact I was working in an environment that previously had been extremely tedious and really felt like it was a trade-off between doing something interesting or doing something that earned money. And then suddenly things started happening that were momentous. I wanted to find a way of capturing them. I created a character and put him through a trajectory that wasn’t enormously different from mine on a professional level but was shaped in such a way that it did what I wanted it to do rather than what ended up happening (to me).
“It is very much a fictitious novel.”
It seems incongruous that someone with a writer’s sensitivity – taught by poet Tom Paulin, who appears on BBC arts programmes Late Review and Newsnight Review – should become a financial trader in will-o’-the-wisp world so disconnected from mainstream reality yet with widespread power to damage.
“Yes. But so many of us did it. Of the people whom Tom Paulin taught that year, I think only two or three out of a class of 15 went into something other than the City.
“It sounds ridiculous to allow 21-year-olds to make decisions about their future! I was a complete idiot and absolutely should not have been allowed to make such important decisions! But there was a thing called the milk round. They’d (the investment firms and banks) come up to Oxford and take you out for swanky dinners and shoot their cuffs at you and show you their Rolexs, and you’d think ‘Well, maybe that might be quite interesting . . .’
“It’s a huge trade-off, and it really did ruin my 20s. I think it’s bad to have regrets, but I hugely regret not making more of the opportunities that were presented to me at Oxford and immediately after. I should have been writing from that age; it shouldn’t have taken me until 28, 29 to put pen to paper.”
Even so, Alex left the financial world only in May, after nine years in the City. He’s glad to be out of it.
He’s sure there are interesting jobs in finance, and that some people relish the things he found mundane, “but I came from a background that is literary. My grandfather is an English professor” – emeritus professor at Princeton University – “my mother was a professor as well, and my father is a Renaissance man, and I don’t know how I made the leap into a world where I was dealing with abstract numbers.
“I remember that within weeks of starting my job I was asked to spend $200million! It immediately places you in a world where the money has no relation to the money you spend in real life. I think that’s really where things got so wrong: people stopped equating the actions they took within their jobs to actions they took outside their jobs.
“The mortgages that were securitised were no longer mortgages that pertained to real people and real houses; they were just these abstract figures.
“The picture that has developed of the bankers in the wake of the credit crunch has been one of Machiavellian types who are fabulously intelligent and making extraordinary bets. I think that’s wrong. It seems to me the real mark of the credit crunch is it showed that nobody knew what they were doing, and it was idiocy piled upon idiocy.”
He argues that finance is a deliberately complex world that even those who inhabit it don’t fully comprehend. “It simply doesn’t help to know what ABS, CDOs and SIVs are if we don’t know what was going on in the minds of the people who traded them. I wanted to show how greed drove these people, how quickly they grew cowed, how they reacted when their world fell apart.”
Alex thinks the City has changed hugely. Thank goodness.
“There was a brief attempt to continue as though nothing had happened, when the worst of the crisis was over and the likes of Goldman Sachs started posting profits again. But I do think, now that governments are beginning to lean on banks, things will change dramatically.
“I think one of the things that has happened is that people who were marginal in the City – and I would very much count myself as one of those who did it just for the money – have left. They’ve either left of their own accord or they’ve been fired.
“I kept a file when I was still at work – of emails from people who were leaving, and some of the things they were doing. There were guys going off to be game wardens in parks in South Africa, and people going to teach baseball in universities in America. They were off to follow their dreams – and also spend time with their families.
“One of the great things for me, having left the City, is that this time around with the baby I’m able to see her and give her a bath.” Alex and his wife have two children: Alastair is two and a half years old and Aurelia just five months. “It was heartbreaking for me to creep in, when I got home from work late at night, and see a little boy sleeping but really not having any time with him.”
He wrote the novel, then, while concurrently working in a nervous City and being a young dad. (And, more recently, studying for an MA and writing another book.) In September he embarks on a PhD.
It sounds enough to make one’s brain explode.
“I just didn’t sleep, I guess!
“I started writing when I found my wife was pregnant with our little boy. In some ways it was trying to justify to him what his dad had done! I probably thought bankers were going to be even more reviled than they ended up being. If someone at a dinner party asked me what I did, I’d cough into my hand and try to avoid the question.”
Does he worry about the world his children will inherit – one in which “certainties” (such as pensions and job security) have been exposed as built on sand.
“I worried much more in the boom years, I think. The idea that everything was becoming defined by money . . . where property had become totally unaffordable . . . I think it was possible to construct a bleak picture of the future, where the only way people differentiated themselves was through financial means.
“Whether we are at the very end of late capitalism, as Marx saw it, I don’t know, but it seems to me that one could construct a more optimistic picture of the future. But you’re right that many of the certainties we had created were brought down. I think those of us who hadn’t subscribed as fully to it (the notion of market success) as we might have done slightly revelled in that, maybe – or at least saw it as part of a natural process.
“I think everyone knew things had got ridiculous. Whether it was sub-prime or the extraordinary complexity of financial products, or the cost of a one-bedroom flat in Zone Four in London, I think all these things began not to make sense any more.
“We’re absolutely not out of the woods, but I think surely there must be the chance we develop a world based on something more useful than mere capital.
“The question remains: ‘What replaces the kind of liberal conservatism that is the foundation of modern democracy?’ and I don’t know what the answer to that is. But it seems as if at least some of the worst excesses of the Bush-Blair era are being if not reversed then at least stalled.”
n This Bleeding City is published by Faber and Faber at �12.99
ALEX Preston had a Suffolk launch of his book in Aldeburgh – an area he knows well, as dad Anthony lives locally and is involved in am-dram with The Friston Players.
“My father’s family is originally from just outside Saxmundham and he grew up there. He always dreamed of going back. It’s an area for which we have a great deal of fondness. We take the kids up regularly to see their grandfather.
“When I was working on the novel I went up there and chucked around ideas with my dad, and also had walks along the front, thinking about things. It’s a good place to clear your head,” says Alex, who lives in London and was born in 1979.
A major part of his academic study has involved the work of German writer WG Sebald, who settled in East Anglia and lectured at the university in Norwich. “The Rings of Saturn is well worth reading. He goes for a long walk across Suffolk and talks about what he sees.”
Alex’s second novel should be published at the end of next year. “There are some themes picked up from the first one, with young people going into a kind of modern world that is confusing and difficult to negotiate, but it’s very much a different kettle of fish – and I wanted it to be.”