If “chick-lit” is the genre of fiction featuring young female protagonists
obsessed with appearances and shopping, and “mis-lit” is the genre of
biography preoccupied with the narrator's triumph over trauma, then maybe
the fad for semi-autobiographical works by young financial professionals
describing City careers that have left them with feelings of self-loathing,
not to mention huge pads in London, should be referred to as “crunch-lit”.
The City analyst Geraint Anderson got the ball rolling last year with Cityboy:
Beer and Loathing in the Square Mile, his bestselling “no-holds-barred,
warts-and-all account of life in London's financial heartland”. Now everyone
seems to be at it, with the publication next month of Binge Trading by the
former stockbroker-turned-writer Seth Freedman, which claims to be an
“account of the visceral, real-life stories that characterise today's Square
Mile” and the publication this week of How I Caused the Credit Crunch by
Tetsuya Ishikawa, in which the 30-year-old Oxford graduate and Old Etonian
provides “a vivid and personal account of 21st-century banking excess”,
based on his six years as a credit banker at ABN AMRO, Goldman Sachs and
Morgan Stanley.
Comparing Ishikawa's account with Anderson's is a grim business, the literary
equivalent of deciding between a scotch egg and a sausage roll in a
late-night provincial petrol station. But if you were to identify a defining
feature of the emerging genre of crunch-lit, aside from the poor quality of
the writing, the speed at which the books are being written (four months for
Ishikawa) and the way they fetishise the excesses they are supposedly
condemning, it is the question marks that hang over their veracity.
Anderson's claim that his account is “80 per cent truth” is, at best,
debatable and HICTCC seems to suffer from a similar problem. The latter
claims to be “a vivid and personal account of banking excess”, but, like
Cityboy, is fictionalised and begins with the caveat that “any resemblance
to actual firms or persons...is entirely... coincidental”.
Inevitably, on meeting Ishikawa outside Goldman Sachs in the City and walking
along Fleet Street in search of somewhere quiet to talk, our conversation
revolves around establishing how much of his biography tallies with that of
the book's narrator, Andrew Dover. “I'd say close to 90 per cent,” he says.
“Put it this way - when I wrote the book I didn't have to do a great deal of
research.”
From the chat that follows, I'd put it at 75 per cent. Dover and Ishikawa
share the same financial specialism, but Ishikawa wasn't, like his
protagonist, hired for his last job with a $3 million guarantee. “In six
years I earned more than £1 million before tax,” he admits. Ishiwaka has
never had expensive spending habits (Dover spends $12,000 on Zegna suits and
cotton shirts, Ishikawa merely says he “almost did”). And, unlike his
narrator, Ishikawa says that he was never a keen consumer of cocaine. “I
smoked marijuana when I was a kid, that's all.”
Surprisingly, however, the clichéd excesses of the narrator's personal life,
which I expect to be fictionalised, turn out to be almost exactly alike.
Ishikawa admits to having been a frequenter of Spearmint Rhino, as does his
fictional alter ego (“If you're out on a Friday night and want to sit
somewhere for a quiet drink, it's good”); visiting a German brothel (“I've
been, but not with a client”); sleeping with escorts (“I did a lot of travel
abroad and the first thing I asked on arriving was: ‘Where is the
brothel?'”); having sex in the office ( “Uh, I have”) and dating a Brazilian
lap dancer (“She became my first wife. My current wife is Korean and works
in banking”).
It feels unnatural to ask such a personal question within 15 minutes of
meeting someone, but this confession inevitably prompts the query: did it
all go wrong with the Brazilian, as it does for his protagonist, when he
slept with her sister? “Uh, no.” A pause. “It could very easily have
happened, though.” I decide not to explore what he means by this.
We are now sitting in the foyer of the Waldorf Hilton on Aldwych, and as
Ishikawa orders sparkling water, I tally the revelations against what he
looks like. It's easy to imagine him as high-flying City worker: he is
dressed casually, but it is very much “City casual”: a pristeenly pressed
white shirt and designer jeans and a pair of expensive brown leather
slip-on, ie, not really casual at all. But he seems too polite, too young
and, despite being Japanese born and claiming to feel more Japanese than
anything else, too English, to have lived such a decadent and eventful life.
As he positions his BlackBerry in front of him - his wife is expecting to go
into labour and he needs to be contactable - I ask how she feels about the
confessions in the book. A sip of water. “I'm very lucky that she's an
incredibly understanding person.” What about his parents? His father, now
retired, worked for a Japanese conglomerate and got posted to the UK when
Ishikawa was 4; his mother is a language teacher. “They haven't read it yet.
I think my parents have always trusted me...maybe too much.”
Frankly, his parents' response is not the only reaction he needs to worry
about. I can't see the book getting a positive critical reception. It
suffers from more structural problems than the global banking system, the
characterisation is thinner than Alan Greenspan's hair, the prose is
littered with business-speak and, most problematically, when you start
getting into the story, you get stopped by a dense lecture on the
intricacies of the credit derivatives industry.
Ishikawa has done this deliberately. He says that the aim of the book - the
idea for which came from a friend, who hearing him talk about being fired
from Morgan Stanley, said that he “should write a book called How I Caused
the Credit Crunch, because it sounds like you did” - was to “explain how the
credit crunch really came about”.
I can see why he has done it. Working as a syndicate banker, Ishikawa
co-ordinated the process by which mathematicians packaged groups of
mortgages and other assets into subprime deals and assets called “CDOs”,
creating and organising the sale of the very “toxic assets”, which have
poisoned banks' balance sheets and brought them to the brink of failure.
(When subprime borrowers were unable to pay back their mortgages in 2006, it
sent fear through the system and the demand for these investments dried up.
The subsequent oversupply sent the value of these assets crashing, which
quickly built up into a tsunami effect and the kind of products that
Ishikawa had been involved in creating and selling fell sharply in value,
leading many of these assets to be toxic.)
But given that even Eddie George, the former Governor of the Bank of England,
has said that he doesn't understand the products that Ishikawa explains at
length, and given that even Nassim Nicholas Taleb, the veteran trader, and
author of The Black Swan, has written that “complex derivatives need to be
banned because nobody understands them”, the level of detail Ishikawa goes
into is a mistake. It is asking too much of almost any reader to expect him
or her to go from an account of a character visiting a strip joint to the
news that his bank “would be the manager of a €1 billion synthetic arbitrage
CDO, and they would buy €100 million of the €850 million of the AAA tranche”.
Basically, Ishikawa makes structuring, syndicating and selling credit
derivative, CDO and securitisation products as dull as it sounds, and while
I wouldn't normally be so harsh about someone's first book, it is necessary
in this case for three reasons. First, you can bet that tens if not hundreds
of bankers are using their huge redundancy cheques to work on similar
accounts and we need to nip this trend in the bud: they have gained enough
from our misery without us now subsidising their new creative careers.
Second, Ishikawa looks as if he can take the criticism. First-time authors are
usually desperate for reassurance, but he does't once inquire what I thought
of the book, and, when asked about reviews and the wisdom of coming out as a
banker when they are having bricks thrown through their windows, he says: “I
don't care how people judge me.”
And, third, the main problem with the book is also its main strength. HICTCC
is worth reading, if only because it inadvertently provides an insight into
the myopic mindset of the City, a world where driving a Porsche Boxster
rather than a Porsche 911 counts as a joke, a world where a black Amex card
is considered a reasonable trade-off for a morally bankrupt existence, and a
world where greed is so prevalent that people can find it in themselves to
think synthetic arbitrage CDOs interesting. As for Ishikawa's views on what
went wrong and what should be done now, it's hard to work out what to think
of them because it's difficult to discover what those views are. On the one
hand, he lays into bankers, with the book's narrator remarking that “credit
bankers should have had to invest alongside their clients, so their personal
wealth was linked into the deals they created”; that he is “genuinely
apologetic for the part” he played in sparking the credit crunch; that “it
was hard not to empathise with the resentment that the public had for the
bonuses that bankers earned”; that he'd “had enough of the bullshit, the
lack of honesty” in the job; and that he was “happy to be fired” because he
“deserved it”.
But, on the other hand, Ishikawa defends the City with rare, if not also
potentially suicidal, gusto, saying that “these individuals ultimately did
only what any other rational human being would have done in the same
situation”, that he feels sorry for Sir Fred Goodwin (“I'm sure that he set
out with the best intentions”) and that, ultimately, we all played a “part
in creating the credit bubble”.
His attitude towards working in the City is similarly schizophrenic. He was
fired from Morgan Stanley a year ago, but despite being approached about
similar jobs and being so driven as a student that he spent his gap year
working on trading floors and three summer holidays on bank internships, in
the flesh he seems taken with the downsized life. He has swapped his BMW X5
for a Toyota Prius, is thinking about selling his Notting Hill flat for a
place in Kent and, having explored the possibility of a medical degree and
teaching, says that he has settled for pursuing writing as a career. He
wrote this first book without receiving an advance, but hopes it will
generate enough royalties for him to write similar tomes on Goldman Sachs
and Eton. “To be honest, I was pretty relieved to leave the City,” he says.
“You have to be aggressive and hungry and things changed when I had a son.
He is 2 now.” His BlackBerry buzzes. Soon he will be father of two boys.
“You know, my wife is enjoying her career, so maybe I'll become a full-time
father and writer. Money is great, but if you don't have it, it's possible
to be happy without it.”
All sweet and touching and life-confirming. But when it comes to checking
facts before publication, Ishikawa remarks, via e-mail, that he'd prefer it
if, instead of saying that he has no desire to return to the City, I wrote
that he has no desire to return to the City “for now...just in case”.
If you were feeling generous you could argue that such uncertainty is simply a
consequence of the ambiguity that is a necessary part of literature, or
perhaps a complex reaction to a complex situation. But if you weren't, and
I'm not, you could say it's symptomatic of the opportunism that has
shattered banking and the world economy and is yet another unappetising
feature of crunch- lit.
Extract: Why I was so happy to be fired - I deserved it
The last year had been a soul-destroying time. Apart from a few exceptional
individuals who had done very well during the credit crunch, almost everyone
I knew hated their jobs. We were no longer building skyscrapers but using
our bare hands to clear the rubble after every mighty tower we had ever
built had collapsed down to its foundations. Moreover, I had begun to wonder
how low I had stooped when I saw the credit crunch bringing out the worst in
bankers. The drugs, prostitutes, strippers, booze and general excessive
nightlife that many bankers were engaged in behind the respectable façade
was one thing - despicable but harmless to others - but what I saw around me
now was another: the office politicking to protect their own jobs at the
expense of others; the even greater sense of self-importance that bankers
adopted to protect their diminishing status in the industry and the world;
the inevitable lack of support for clients who once bought the credit
products that enabled the wealth creation that many bankers benefited from
during the bubble, and who were now struggling to hold on to their much more
modestly-paid jobs. We had to move on to hurting others in our quest for
self-preservation.
I had had enough of the bullshit, the lack of honesty with ourselves. It
seemed ridiculous to me that bankers who had profited so handsomely during a
bubble were not prepared to take the pain when the bubble burst. In fact, I
had already begun to positively despise those bankers who couldn't see a
life beyond a job in the finance industry, no matter what.
Zoe greeted me with an uncomfortable smile. She was my boss, the Global Head
of Credit Sales at Irwin May, a genuinely kind and maternal figure. She was
also the one who had hired me on a $3m guaranteed bonus to do a job that
didn't really exist by the time I had started. “As you know, we've been
resizing our business in this market downturn and we've had to make some
harsh decisions.” A human resources lady sat next to her, observing
proceedings. What she really wanted to say was: “You're expensive, you're
not producing, and I didn't care how much of a superstar in credit we
thought you were, there's nothing for you - you're out.”
“We'll endeavour to place you in another job at Irwin May as we have been
expanding greatly in other regions, such as Dubai and Mumbai.” I just
laughed. We both knew she was spouting total and utter crap.
“We do have to ask you to go back to your desk, collect all your belongings
and leave the office immediately. Your security pass is no longer
operational as of now and we ask that you leave all work-related documents
and materials in the office.”
Jeff Nordberg came to my desk. Jeff was the Global Head of Sales at Irwin May,
or in layman's terms, the man who was responsible for all the firm's clients
globally and who had pushed through my hire the previous year. “I'm sorry,”
he started sombrely, “but we didn't have much say in this matter. We think
there are still a lot of opportunities in this market and we need people
like you, but we just had to let people go, and the decision was made by the
CEO.”
“Jeff, I understand,” I replied. Look around us, Jeff! What opportunities? All
the clients we ever made money off had either folded or were in such a bad
state that we didn't know if they were going to be in their job the next
day. Of course Jeff knew this, but he was first and foremost a very
well-paid employee of Irwin May.
And that was it. My moment of clarity. I wasn't a victim of the credit crunch.
None of us on that floor were victims of the credit crunch. Victims are
those who get caught in the crossfire. The victims of the credit crunch were
out there, the general public who had been taken advantage of through a
system that fed the credit bubble so that bankers like us could become rich.
We weren't victims. We were the cause. And it was this that made me so at
peace with myself. This was why I was so happy to be fired. I had deserved
it.
©Tetsuya Ishikawa
How I Caused the Credit Crunch by Tetsuya Ishikawa, published by Icon at
£8.99. It is available from Times BooksFirst for £8.54, free p&p.
0870 1608080, www.timesonline.co.uk/booksfirst
