I read Straight to Hell: True Tales of Deviance, Debauchery, and Billion-Dollar Deals, by John LeFevre this week. It was given to me by an 80-year-old retired investment banker (who didn’t want it back), or I wouldn’t have wasted my time, certainly not my money. My friend said it was about the carousing that goes on behind the scenes in investment banking, but I found it hid more than it revealed. LeFevre’s credentials are obscure, although he tells us he cheated his way through Choate. He doesn’t say what college he graduated from or what he majored in, but he had the astounding good fortune to be among the select at Salomon Brothers, a subsidiary of Citigroup. He brags about cheating and skipping out on training through analyst training school, yet he always seems to be in the top of his group class.
What immediately struck me as most odd, though, is that the book opens in August, 2001, when he was in training at the World Trade Center, but he breezes past the 9/11 catastrophe as though it never happened. The Enron scandal outted the following month, rocking world markets, but not a whisper about it in the book. It seemed as though he was bragging that he and other insiders knew it was coming down, that it was an insider job and, as I’ve suspected, was done to destroy financial records.
Overall, the book is dull, not even shocking or disgusting, merely a tedious rendition of his mean-spirited pranks at Choate, and later while working for Citigroup. Skipping training classes, drinking heavily, and smug about getting away with it. He drops brand names, tells how much money he spent on trips to places like Saint Tropez, and gambling. Naming places, like restaurants, I guess other people are impressed by. He tells us that social contact was essentially limited to other analysts, because others simply don’t understand the fast-paced, high-powered, moneyed life. Still, he was at the bottom of the social hierarchy of those who “really mattered,” meaning, I suppose, the blue bloods in the resorts.
In Confessions of an Economic Hit Man, John Perkins wrote that his resume as an economist was completely fabricated by the company he worked for. I sense LeFevre is even more of a fraud, and most of the book is more about his personal debauchery than about any deals he made or how the system works. The company moved him to Hong King, where he worked as a bond syndicate manager, in 2004. Here he excelled at unscrupulous methods for putting deals together, while drinking, using cocaine, and cavorting with prostitutes, a lifestyle he suggests is standard in the industry, or at least among the people he knew.
LeFevre interests me as a type, not of the international banking world, per se, but of the nihilistic, cold-blooded generation that will be happy to euthanize their parents once the money churners and asset plunderers have gutted their retirement portfolios. The easy money that his type enjoys is the cream of years of other people’s investment and labor. His contempt for those people’s gullibility pollutes every page. He speaks the modern lingo, has the modern values and the modern entertainments, like video games and movies. He lives the fast-paced life, travels from five-star hotel to five-star hotel around the world, feeling sophisticated because he knows the red-light districts and most expensive restaurants. From my perspective he seems isolated with his group in a world divorced from real life, above it but absolutely dependent on it, like vampires afraid of the sun and of the living beings whose blood keeps them going.
While I’m astounded at the size of the financial giants–like Citigroup, JP Morgan, and Goldman Sachs–and all the different financial “markets,” like “fixed income”, “bonds,” “distressed loans,” and the like, I’m only surprised because it shows how big a scam the whole debt-backed financial web is. Bond issuers–institutions like corporations and governments–use deal makers like LeFevre to sell bonds to “investors” (hedge funds, asset managers, insurance companies, and pension funds, to name a few). The sad truth is that these so-called “issuers” and “investors,” are not using their own money to make the deals, so they are also skimming from the individuals whose aggregate wealth they control. They assume no personal risk or accountability and make money whether the “deal” performs or not.
My take is this is why health care insurance is now mandatory in the US. The pension and benefit fund market was not large enough to satisfy the bleeding loins of the self-styled “masters of the universe.”
And why would LeFevre publish now, when most of the story occurs between 2001 and 2004, when he was still working for Citi in Hong Kong? My guess is the house of cards is waving in the breeze, and the sharks have turned on each other to save themselves. If he goes down, he wants to bring the others down, too. His tail is in a crack, and he is desperately seeking relevance.