Tip:
Highlight text to annotate it
X
backlight
Five years after the global economic crisis started
the full scope of the damage is still an unknown.
Strangely, we know very little about the players who caused the catastrophe.
For that reason, Backlight together with Joris Luyendijk as our guide
looks into the London City: the financial heart of the world economy.
He delves into the minds of the players: Bankers, traders, masters of the universe
the self-proclaimed elite.
Who are these people, and mostly, what moves them?
What goes on inside their minds?
An investigation into testosterone, adrenaline, addiction...
and reckless use of big money and a world economy teetering on the brink.
This is what awaits you:
That's the culture right now.
The world is in the hands of 25 year olds.
So we're talking about a type of person, a sub-strata of people who...
who are, at the moment, shaping the world with a worldview that is incorrect.
This is Backlight. Welcome inside the brain of a banker.
The brain of a banker
Joris Luyendijk has been working at English newspaper The Guardian for the past year
blogging about the financial world.
In Voices of Finance anonymous sources speak out about every day life
success, envy, greed, dreams and nightmares in the London City.
His series of articles caused such a stir,
Joris was recently invited by a Parliamentary Committee
to bring them up to speed on the world of banking.
Which is shrouded in the unknown and very little understood and urgently needs reforms.
On that occasion, Joris did not hold back.
More than enough reason for Backlight to seek out Joris Luyendijk
for a heart to heart on the financial world
where we'll take a closer look at the bankers brain.
Hmm, I'm not going to drink that.
It's very slow but something white is coming out.
- I recently saw your entire appearance
What kind of Committee was it exactly?
It was a sub panel of the commission on standards in banking.
So they're hearing a few seniors of banking
and they're hearing people who are experts
and they get pretty firm, and so they have people who are a little bit of a break from that
I felt pretty good there.
When I sent one of the first interviews to one of the people I interviewed
a couple of days later I received an email reply, and he wrote he showed it to his wife
and she said: I finally understand what you do for a living.
And this guy had been a banker for 20 years, and had been married for 20 years.
And he never really succeeded telling her
what her husband was doing in that large glass building every day.
And that's really a strange thing.
It's unbelievable, just unbelievable:
If you want to know about gender studies in Gaza, you'd find 10 recent papers easily
but when you want to know how hedge managers work,
you'll only find very abstract descriptions on how someone at a university
says how it should be according to current economic theories
purely etnographically, people who have studied this on the ground:
Almost nothing.
So it's like, we know more about ancient Egyptians than the people
who today are shaping the direction of our lives.
We've got a few clips here.
So first we're looking at the characterization of a banker.
If there's anything I've learned in the past year and a half,
it's that this system has only losers.
And as long as we aren't also seeing bankers as losers in this equation
just the best paid losers,
that in exchange for all of that money really have a terrible life [LOL]
in an environment that is terrible...
And... What I would say to the woman who would want to come back as a banker
she's really not getting it. You don't know how terrible the environment is.
So... I think we should start cuddling them.
As long as we're angry, we're enforcing their idea that they have what we want.
And that alleged jealousy is needed for their self-image.
When Lloyd Blankfein says "we do Gods work", the arrogance is just oozing
that self-image that says: Everyone wants to be me.
- I mostly see people under stress.
This is a mix: A couple of them are cold and calculated
but I think that average traders, you have some cold ones,
they aren't cold, they're boys and girls who've been chasing societies promises
and who were trying to succeed in life. Had dreams like we all had.
But of course you're after the mind of banking.
My name is Peter Sioen, I am a psychologist.
I've worked in London for 8 years, and I coach managers in the City
mostly managers who are trying to do better, who are getting lost in the rat race.
We're learning so much about the human brain right now
it's like completely *** territory in science that we're fully exploring
and every week we're reading about new things that we've learned
and we're discovering that it all rests on neurotransmitters and hormones
and chemicals in the brain.
We now know that greed, that's been explored, how greed can work
so that some people can just "taste" power, and how certain hormones exacerbate that
and make people ever greedier than they originally were.
How those processes work in the brain, that's all been well documented.
There's been a lot of research into psychopathology.
and there's evidence, they use questionnaires for that,
that the proportion of psychopaths among topmanagers in the financial sector
is as high, and share the same psychopathic traits as psychopaths in jail.
But to say we really know what's going on in their heads based on these photographs
I would even say that the face is the last place I'd look for clues.
If you tell 22 year olds that they're the best thing on the planet
of course they're going to become arrogant. Especially if you stuff their hands with cash.
Their testorone levels are the higest. And that's the culture right now.
The world is in the hands of 25 year olds.
Going on my personal experience,
I've worked with victims of pedophiles, with people who were using ***
Even in cases where these people are intellectually impaired
as soon as they need to look for the next victim or their next fix
The brain takes over
and something happens in these people where they become smarter and more cunning
than they really are.
When I look at criminals or psychopaths in the business world
I do think that that's is a case of "nature", rather than "nurture"
and so I think banks, especially banks, played a game where they...
took in certain psychopathic characters to bring in bigger profits.
The things people are saying, I wouldn't say the sector is run by psychopaths
but I would say that psychopaths, or people who act mercilessly,
that's probably a better way to put it, that these people are tolerated
and when they bring in a lot of money, they're also celebrated.
But that merciless attitude does help you.
A book just came out by someone working at Goldman Sachs
who explains: We make a product that is simply too complicated
and looks safer than it really is, and where our lawyers made sure that...
the apparent guarantees that make it look safe, would be shown as not safe at all
if we'd ever end up in court for it.
So then we start calling charity organisations, "you've got these
stocks, and do you realize the risks you're taking when interest rates change?
And we've made a product that mitigates the risk."
And on the other end is a "muppet", that's what they call a person that doesn't get it,
and he says "Wow, that sounds good".
It could be an American charity or a Dutch housing corporation,
the treasurer, somebody who manages public funds in Haarlem.
The sophistication of these financial models is such that
most probably won't get it, if you did get it, the bank would probably hire you.
Quite a formula.
This reminds you of math, and math was terrible, you weren't good at it
and it made you feel bad.
And you could see that as this guys revenge.
This guy was 16, in a classroom, and he got it. He was bullied, and now he's the man.
Economic theory states that the financial sector is made up of rational people
who are making transactions and maximize their private interests
and that you don't really need a culture, they are mechanistic exchanges.
And that translates into models and in these models you calculate risks
and that allows you to understand the entire financial sector as a machine.
That proved completely untrue in 2008.
But science still hasn't come around to saying we should send peole out there
and really get into how things really work instead of how people say it works.
Court case against Jerome Kerviel October 2012
Extreme mathematical abilities often go together with Aspergers
so a lot of models that lie at the root of many of the sophisticated financial products
were put together by people with Aspergers.
They are one of the most fascinating groups of people in our society today,
the math geniuses with light Aspergers.
I attended a Google conference, with their top people
they reminded me of the people who build models in the financial sector.
When I interviewed the people making these models, they talked about
the lure of the mathematical model, to only think in terms of numbers.
"I'll be at a window on the 8th floor, and I see a string of ducks fly by
and I do the math to figure out which duck will be first, with the wind from a certain angle
with a given speed blows in the direction of the ducks."
And they say it's incredible addictive to do nothing but math all day long.
So these are people living in an entirely different world.
They've told me: 100 years ago, I might have been burned at the stake
or people may have left me to die. Society wouldn't have had any use for me at all.
But today, with big data, at Google and with model building in banking
there's a short window of time in which I have an ability that the whole world wants.
And so I make an incredible amount of money.
The issue is, I've said that people with Aspergers have trouble lying
when they build models, they only model that part of reality they're perceiving.
If you have a hard time perceiving lies, dishonesty, the tendency to act irrationally
you don't include them in your model.
The models in place at the time of the economic crisis
all involved people lying about their mortgages.
People taking out loans which they knew they would never fully pay back.
That aspect, people with light Aspergers tell me, is very hard to imagine, because it's not rational.
So we're talking about a kind of human, a sub-strata of people
who... who are currently shaping the world with a view of the world that is incorrect.
Something happens in your brains where your reasoning becomes circular
in such a way that you think: I'm doing well, my team is doing well
everyone else simply isn't getting it.
And there's irresponsible risk taking, a trader that is sent to jail for 7 years
because he was taking unreasonable risks, but what happened in the crisis of 2008
is that we saw a gray area, where you should have asked questions that weren't asked
but that nobody around you asked.
Not only in your team, but not at the bank level, wasn't asked at other banks
not by the regulatory agencies, by the credit rating agencies,
not by accountants or lawyers
and everyone grew rich by the questions that nobody asked.
That's a lot more dangerous.
It'd be great if we were talking about a small group of creeps in some room
who were dreaming up schemes we're now all paying the price for.
It's a lot more like a continuing process
where it's incredibly difficult to find out what exactly is going on
but all the incentives are in place to set people in the direction of how things work.
That's a lot scarier, it's more optimistic to think of things as just a conspiracy.
It's a mess.
I talk a lot to the losers, who on the way to the top of the pyramid fell off somehow.
The people I talk to who drop out are either the losers who were thrown out.
But they're also often winners who do make it, reach 40 and look around
and think: my God, I've barely been with my kids
I really have no idea who my wife is
I'm drinking heavily. I only think in terms of transactions
everything I do, I'm constantly calculating whether I'll come out the winner or loser
I'm a wreck.
Going back to your client: How's he doing?
Not well.
There's a trial going against one of the traders who cost his company many billions
he's fair game right now.
He broke the rules, but he said: Everyone broke these rules.
This was my family.
People came from wherever they were raised, brought into this banking world
where they, together with their peers, did the same things
people of similar age and intelligence
breaking the rules together and tried to make billions together.
And he's saying: Yes I broke rules, everyone did it
but he's crying in court right now and saying, "that was my family".
In general terms, I thought of democracy as being the community deciding together
what kind of a people we want to be...
and that people are now feeling that an essential part of that power
we once had in our lives, we've lost.
It was transferred to a group of people we don't really understand
who don't feel any kind of loyalty to us
who work with numbers
and on an individual level are in a very uncertain environment
but as a sector really can't be moved out of place.
And that we're now expected to obey.
When you look at the solutions being offered to Europe by financial analysts
it really comes down to start running Europe like a commercial bank.
Make it easier to fire people, less rights less relationships based on trust
and more relationships based on conflict and competition.
And they're making good progress.
It's January first. Best wishes.
You said it. It'll be our last century or it'll be our best century.
PROMO FOR NEXT EPISODE WATCH "ABUNDANCE" ON MY CHANNEL
BACKLIGHT
THANKS FOR WATCHING