Gary Stevenson, a former London trader for Citibank, explains how he made millions of pounds betting the world economy would collapse.
Category
🤖
TechTranscript
00:00My name's Gary Stevenson.
00:02In 2011, I was Citibank's most profitable trader in the world.
00:06This is everything I'm authorised to tell you
00:08about being a trader for one of the world's biggest banks.
00:12You become the best trader in the world
00:14for one of the biggest banks in the world,
00:15and then somebody sits you down
00:16and threatens you, basically, like a gangster.
00:20It kind of makes you realise
00:23that they're the same f***ing people.
00:30When I started working, it was this kind of...
00:33a bit of a mad environment.
00:34I'm always reminded of...
00:37You know when you hear footballers talk about...
00:39footballers from the 90s and the 2000s
00:41talking about when they came through
00:43and the stupid hazing rituals and stuff.
00:45On my first week, they made me buy 100 burgers
00:49and carry them up and give them around the trading floor,
00:51this kind of thing.
00:52There was a lot of that kind of nonsense going on,
00:54and there was a lot of people getting taken out
00:57to expensive restaurants and clubs
00:59and taken out to holidays.
01:00I got taken to Vegas when I was 21.
01:02Before, I went to Jay-Z's after-party in LA,
01:06and then I went to Carmen Electra's birthday party.
01:08I hadn't even started working full-time.
01:10And one of the nights, I can't even remember,
01:12it must have been like $20,000 or $30,000
01:14one night in a Vegas club.
01:17To me, it was really weird,
01:18because I come from a very poor background,
01:20and I was in a VIP table in LA
01:24with a bunch of 35-year-olds
01:26who were paying girls who looked just like
01:28the girls I used to hang out with at uni
01:30to hang out with them, you know what I mean?
01:31My specific desk started to make enormous amounts of money,
01:35which was really crazy for me.
01:39I was super young, and some of the guys I was working with
01:42were pretty crazy guys.
01:44And they started getting really big for their boots,
01:46and one of the guys immediately got
01:48one of their secretaries pregnant within a week.
01:52What it meant was the amount of money we were getting paid
01:54just for sitting in our seats went up a lot,
01:57which meant that you could afford to lose a lot of money
01:59without it appearing like you were losing a lot of money.
02:03So for example, if you're making 100 grand a day for the bank
02:06just for sitting in your seat,
02:08you could afford to lose 100 grand a day on bad bets
02:11and not actually be officially losing money.
02:14Obviously, I know now that there's this massive stereotype
02:17that traders take cocaine.
02:18So I was expelled from school
02:19for selling three pounds worth of cannabis
02:21when I was just turned 16,
02:23and I was like, that's it, no more drugs.
02:26I'm off drugs, no more drugs ever again.
02:28So I've never taken cocaine in my life,
02:30and I turn up in the place.
02:34Everyone's going out partying until 2 a.m., 3 a.m.,
02:36and getting to work at 5 in the morning.
02:38And I was like, how the f*** do these guys do it?
02:40They're older than me as well.
02:41But by my late 20s, some of my mates were taking cocaine.
02:43And they were doing that thing that people on cocaine do,
02:46where they talk just at you a lot really quickly,
02:50and they're being really boring,
02:53but they don't notice they're doing it.
02:55And then, of course,
02:57that is what my whole career had been like.
02:59And then I realized, f*** me,
03:01were those guys just on cocaine the whole time?
03:04And then since then, one of my colleagues,
03:06who is very upset about the book,
03:08came out and said he spent,
03:10I think he said he was spending
03:1180,000 pounds a year on cocaine.
03:13Yeah, which is...
03:15But the funniest thing is,
03:17I had no idea it was happening.
03:18I had no idea it was happening.
03:19I just, I thought he was an alcoholic.
03:21Probably the maddest thing was, again,
03:23this guy Rupert, from a very rich background,
03:25he really took to me really quickly.
03:29And sometimes I feel bad about the way I portray him,
03:32because he really was good to me.
03:34He really sponsored my career, drove me through,
03:37and he would take me out with all of his mates.
03:41And he lived in Clapham, and I lived in Ilford,
03:42which is totally opposite ends of London.
03:45And he'd take me out with all his Clapham mates,
03:48and we'd be going to f***ing Movida,
03:50which is a big, expensive club,
03:51and expensive restaurants,
03:54and he'd normally let me go around midnight,
03:57because otherwise I'd miss the last train,
03:59and he'd have to pay for a taxi.
04:00But he was like, no, stay.
04:02He kept me out later and later.
04:03In the end, I ended up staying at his place.
04:05I woke up, I felt like s***.
04:07I went into the office, I just threw up.
04:09I had to go to the bathroom, just threw up.
04:11The boss sent me home.
04:13Next day, I came in early,
04:15and the boss was like,
04:18oh, did Rupert do that to you?
04:21And I just laughed.
04:22Then when Rupert came in,
04:23the boss goes to him,
04:25Gary said, you did that to him.
04:27And I knew that he'd be furious, right?
04:29And at the time, he used to sit two seats to the left of me,
04:31but there was an empty seat between us.
04:34And I just thought, don't look at him,
04:35just don't look at him.
04:36But I could kind of feel him burning into my cheek.
04:38And then I start to hear like,
04:41at first, just kind of like a gentle growling,
04:45like a growling in the back,
04:46like a,
04:47ah, ah, like this.
04:49And then I just think,
04:50s***, just don't look at him, don't look at him.
04:52And it starts to get like louder,
04:53like this growling gets like louder and louder.
04:56He's on the training floor in front of everyone.
04:58I'm just thinking, s***, don't look at him.
05:00Then I hear like this bang,
05:01this big bang, right?
05:03And then I think like, s***,
05:04I'd better turn around now,
05:05because like, what the s*** has he done?
05:06And he's,
05:07we used to have like,
05:09all the computing stations were like behind these doors,
05:11and he'd kick the door,
05:12so it like smashed into the brackets,
05:14and he was just kicking like that.
05:15And he was turned around in his chair,
05:17like leaning over towards me,
05:19like that, like, like that.
05:21Like gnashing his teeth,
05:23like a f***ing dog at me,
05:25and growling at me.
05:26And I just looked at him,
05:27and he did it for about,
05:28it must have been at least 10 seconds,
05:30just like growling, gnashing his teeth at me,
05:33in front of everyone.
05:35I just, s***, looked back,
05:37and then he just started the growling,
05:39started to just chill,
05:40and then he just kept on with his work.
05:42He never mentioned it again.
05:43That was it.
05:45There's these brokers who kind of
05:47match the traders together,
05:49and their job is to help you get deals done,
05:53you know.
05:53You say, I want to buy here,
05:54and they're supposed to find a seller.
05:57But in reality,
05:58what they were doing a lot of is basically,
06:01taking people out,
06:02taking people to,
06:03and they had this kind of really interesting skill,
06:05if they sort of,
06:06they know what you like.
06:07So, you know,
06:08one of the guys wanted to go to like,
06:09fancy restaurants,
06:10and he was like,
06:10I want to go to a fancy restaurant,
06:11and he was like,
06:12I want to go to a fancy restaurant,
06:13and he was like,
06:14the other guy wants to go to fancy restaurants,
06:15and drink red wine,
06:16and other guy wants to like VIP tables
06:17at fancy nightclubs,
06:19and other guy wants to get taken on holidays,
06:20and other guy wants to go to sports events.
06:23But the truth is,
06:23when I got taken out by these guys,
06:24even when I went to Vegas,
06:26we would go to like,
06:27celib pays in LA and Vegas.
06:28For me, it was work.
06:30It was just work,
06:30and I was just trying to sort of
06:33be the Gary that these guys wanted me to be,
06:35and it was quite fun.
06:36I didn't really realise,
06:37because most people that go in there now
06:39come from rich backgrounds.
06:41Their dad was rich,
06:41their mom was rich,
06:42friends are rich, or their mates have similar jobs, or their mates go to these VIP clubs,
06:48you know, they're booking tables and they're going to fancy restaurants. For them it's
06:53just part of their social scene, but for me it was totally taking me out of the social
06:57scene I was from, so I kind of hated it to be honest. And plus there's this weird thing
07:01that happens where like brokers will take you to like, I remember they took me to watch
07:06England, my first England game, and then the next day they're like, oh can you do this
07:10deal for me? And then you realise like, oh there's a kind of f***ing hidden little quid
07:14pro quo here, which I wasn't really comfortable with. So eventually like, I started to just
07:19like say, look I don't meet no brokers, I don't go for no dinners, I instituted Nando's
07:23only rule. So for Americans who don't know what Nando's is, Nando's is a popular grilled
07:28chicken chain. I said if you want to meet Gary, you go to Nando's Canary Wharf, I pay
07:34for me, you pay for you, that's the rule. But then, by then I was like the biggest trader
07:39in like, one of the biggest traders in the world, so like, so many people wanted to go
07:41to Nando's for me, I was eating f***ing Nando's every day. So I just sort of like, cut it
07:45off and I became very anti-social actually. I think people realise like, Gary's just not
07:50this kind of kid, you know, he doesn't want like, I think, you know the brokers, the traders
07:54maybe are not socially aware to realise it, but the brokers, because their job is kind
07:57of party people, and also, a lot of the brokers come from poorer backgrounds and come from
08:01my neck of the woods. They realise very quickly, Gary is just here pretending to have a good
08:08time, so that other traders have a good time, because that's exactly what they're doing.
08:11And they realise like, listen, Gary just doesn't really want, he's not, this is not his game
08:15really, and they sort of let me get away from that.
08:23These guys are mainly people who couldn't cut it as traders, so they try to like, climb
08:26the greasy pole, and what they make their money on is basically internal politics. The
08:31kind of person who decides to make their money managing internal politics as an investment
08:35bank is usually a bit of a d***. The management is just like, it's just an absolute cesspool,
08:42really. I remember talking, my manager's manager, who in the book we called The Slug, I remember
08:47talking to like, one of my mates on another trading desk, and he was like, I tell you
08:52what, if he was your intern, you wouldn't hire him, would you? So I became the Swiss
08:56franc trader when I was 22, which is really, really young, and the way it happened was,
09:01my boss, who was a Swiss franc trader, quit, and a new boss got put in, and he was a really
09:07nice guy, but he seemed a little bit kind of like, dopey in a way, and he'd come over
09:11once to introduce himself to me, and the way he introduced himself to me was, he just sat
09:15down next to me, and he pulled out a copy of Sports Illustrated, and he flicked through
09:19the magazine, he opens it like that, to me, and he's like, do you like that? And I was
09:25like, yeah, it's nice, and he's like, the next, the whole, one at a time, he didn't
09:31even say hi, he didn't even say his name, and then I figured out this guy must be the
09:35new **** boss, but then, he stood up, and he said to me, what's your job on the desk
09:40then? And I was thinking like, I'm the desk junior, right, and I was thinking like, surely
09:45**** knows what my job is, and there's this kind of moment where I'm looking at him, and
09:49he's looking at me, and I'm thinking like, ****, and I told him, I'm the Swiss franc
09:55trader, which was my old boss's job, and he was just like, alright, okay, alright, fine.
10:02I love my second boss, but he was totally insane. I remember once, he sat me down, just
10:06like, Gary, I really need to apologise, and I was like, what for? And he was like, we
10:10can't give you a salary increase, and I'd never even asked for one, and the previous
10:13year, I'd been paid £400,000, and he seemed genuinely worried about whether I could survive
10:17on it, you know, and then I just said to him, yeah, it's really tough. What else can
10:22you say to these guys? Another time, my boss threw a phone at my colleague's head, because
10:27my colleague had got angry, and he'd thrown his phone at his screens, but obviously, like
10:35now, with these LCD screens, they don't, like, smash, so he was like, he didn't really, he
10:39just, and then he, so he picked up the phone, smashed it on the desk, and then he started
10:44trying to trade through the same phone, so he was like, and he's like, Johnny, what's
10:48three months on? But he wasn't working, and then he was just shouting, and then he's just
10:52banging his phone. So then my boss shouted over to him, like, what's wrong? And he obviously
10:58wasn't listening, and then he asked me what's wrong, and I said, I think JB's phone's broken.
11:03So this boss just went over to the end, just picked up a phone, and just, like, lobbed
11:06it in the air, landed on this guy's head, and then, the weirdest thing is, it totally
11:10calmed him down, totally, effectively calmed the guy down. Yeah, I don't know, it's, the
11:15only thing I ever saw get escalated to HR was a guy who stole money from another trader,
11:19and even that, there was a general consensus on the desk that he shouldn't have escalated
11:24to HR, that he should have just, we should have dealt with it between us. Yeah, it was
11:28like that, there was a kind of a, there's this, like, a kind of pirate ship vibe about
11:33it, like, you know, you know, it's that, it's a very masculine way of, like, you know, we
11:39sort it out between us, we don't go to HR, because the truth is, a lot of people do do
11:42dodgy s**t, a lot of people get away with it, because if you're making money on it,
11:46management, maybe it's changed, but management are not going to ask. I was making a ton of
11:50f**king money, tons of money, nobody ever asked how I was making it, management never
11:55asked how I was making it, because if you're doing something dodgy, they would rather that
11:58just to slide, they're going to get paid on it, rather than to find out. When you lose
12:02money, you get, a lot of stress gets placed on you. The worst thing, from my perspective,
12:08and from the perspective of many traders, is that you get, you're no longer allowed
12:12to trade. And that's what traders want to do, they want to trade. It only happened to
12:16me once, I was only once ever in the red, which was in my second full year as a trader,
12:21in 2010. So I was 23. I'd put a big bet on which had some risk to Swiss interest rates,
12:30and the Swiss central bank suddenly cut rates to negative 4.5%, for some crazy reason. Specifically
12:37using the product that I was betting on. I lost $8 million in a week. The maddest thing
12:42about it was, it was the right bet. If I was allowed to keep that position, I would have
12:45made it all back. But I wasn't allowed to keep that position, so you end up $4 million
12:48in the red, and you have to fight your way out of it.
12:51I'm pretty sure my salary was $36k when I first started, which was a good salary for
12:56the time. I mean, it's not even a bad salary even now. P&L is profit and loss, and it's
13:01the only thing that matters in the world if you're a trader, basically. And every single
13:06day, every week, every month, every year, your individual P&L is calculated. Everyone's
13:11individual P&L is calculated. And it goes around on a spreadsheet every day. So every
13:15day you get a spreadsheet, you get a profit, you get a loss, you get a loss, you get a
13:19So every day you get a spreadsheet that tells you every single trader's P&L, which obviously
13:23means if you're the best trader, you're the best trader. But if you're losing money, everybody
13:29can see. It's very clear who the best is, and it's very clear who the worst is. And
13:33that starts to become how you interact with other people, and it starts to become how
13:35you see other people. There's this kind of beautiful fairness to it, in a weird way.
13:41And I think there's not a lot of places in the world, other than sort of the football
13:45pitch, where a kid like me, from nowhere, can come in and compete with all of these
13:52multimillionaires from rich families, and be like the guy at 24.
13:57Traders in my department were getting paid about 7% of their P&L. But I didn't know that
14:02at first. And there's this kind of idea like you can't ask anyone what their bonus is.
14:06So it was like really mysterious. And then this thing happened after my first bonus,
14:11the beginning of 2010, when I got paid nearly £400,000, which would be like, at the time,
14:16maybe $700,000. So much more than I've been expecting. And it kind of broke me a little
14:21bit. And I just became like, oh my god, there's so much money to be made here. This is it.
14:26All we're doing now is trading. And then obviously, the next year, I lost this $8 million in a
14:29week really quickly. And that just, again, beat me like you have to be better, you have
14:33to be more serious, you have to work harder. And I just became like, I became like this
14:39machine. Most of the traders, in my opinion, were not making huge amounts of money from taking
14:45risky positions, speculative positions. They were making most of their money from the customers.
14:50But they're kind of trying to pretend they're making it from their bets. But
14:56most traders want to be making money from betting because that's
15:01sort of the glamorous side of it. Can you actually beat the market?
15:07It wasn't really until 2011 that I started to make some big bets. You know, like I always
15:12remember in 2011, the Japanese nuclear disaster. I made a ton of money on the Japanese nuclear
15:17disaster, not because I'd been expecting it to be a Japanese nuclear disaster, but because I was
15:21betting on economic weakness. You bet on economic weakness, this crazy thing happens that there's no
15:26way you could have predicted. You make a ton of money. Well, some people the other way around,
15:30right? You know, some people would have lost a ton of money on the nuclear disaster. People
15:34sometimes turn around to me and they say, oh, it's terrible that you made money betting on
15:40these things happening. I made money from the Japanese earthquake, right? 20,000 people died
15:48in that earthquake, in the following tsunami. I didn't make that tsunami happen. I think that's
15:55important to realise. And these guys' job is to bet on it and to be right on it. They're very,
16:02very heavily incentivised to be right. The payment structure is very weird, or at least
16:06it was back then. You would get paid a lot of money in a bonus, but it would be like deferred.
16:10So you get this money in four years. Since I left banking, this rule came in, this EU law
16:16that limited bonuses as a multiple of salary, which meant that the way payment happened is
16:21completely changed. Now, because of that bonus cap, what they will have to do instead is they
16:28massively increase your salary. And since then, salaries have increased massively and bonuses have
16:33decreased massively, which decreases the incentivisation to take risk. And it also
16:39increases the incentivisation to kind of sit on your chair and sit around and take the money.
16:50So I won a card game. I won my job in a card game. I was a very good student. I did maths and
16:54economics. I got very good grades. But it turns out, and I didn't know this beforehand,
17:00the way to get a job is you have to get an internship in your second year. So you have
17:03to apply with CVs. And people at LSE would be sending like 35 CVs to different banks. But
17:09obviously, because they're from rich families, they've kind of prepped for this, right? So
17:12everybody has some really quick extracurriculars. They founded the Junior United Nations or some
17:17**** or they're like concert pianist, you know. And I was working in a sofa shop and trying to
17:23become like a grime rapper when I was a kid. And so I was like **** basically, because you can't,
17:28we can't get it. But I had quite good rappers being like good grades. And he's a smart kid.
17:33A guy also in the math department from the year above, I didn't know who he was,
17:37walked up to me in the library one day and just said, Citibank, I want to trade with you through
17:42a card game. It's basically a maths game. You just enter that and you'll win. So I was like,
17:47yeah, let's just go for it. Let's throw ourselves into this card game. And that's how I got my job.
17:51That card game is called the trading game. It's a betting game, basically. So there's a special
17:56deck of cards, some low cards, some high cards. Five players, we all get a card. And then
18:02essentially we're making bets on what the total number of the cards is. So if I've got a low card,
18:07I should think it's going to be low. And I'm betting it's going to be low. I'm making sell
18:12bets essentially. And it's structured to be like financial markets, like a buy price and a sell
18:16price. I had the big advantage, which was this guy had explained me the rules of the game before the
18:20game itself. Other people were going into the event not knowing the rules of the game.
18:23If you are a maths or economics student, when you play a game like this, you are going to
18:26immediately do this thing, which you're taught to do at university in mathematical subjects.
18:31Calculate the expected probability, which is like, OK, these are the cards in the game.
18:36This is what we expect it to be. Oh, but I've got a really low card, so it's going to be lower like
18:40this. Everyone's going to do that. That is the instinctive thing that a maths or an economics
18:45or a statistics student is going to do. So I've got a low card. I think the total is going to be 50.
18:50You've got a high card. You think it's going to be 70. So I start saying 49, 51. You know,
18:55I'm going to trade and you're going to start saying 69, 71. It makes sense, but it's actually
19:01quite a stupid thing to do, because number one, you immediately give away your card first thing.
19:06But number two, if I'm there and this guy's quoting around 50 and you're quoting around 70,
19:12I can buy it 50 and sell it 70 and make like 20 instant free profit. And I would just
19:17do that. Bam, bam, bam, bam, bam, bam, bam. It's really, really stupidly easy in a way.
19:21But I mean, of course, I was only able to do that because I had the rules in advance. That's
19:25how I won the first round, just by kind of taking advantage of this kind of stupidity.
19:31Second round was the national finals. I developed a new strategy, which is kind of around sort of
19:35bullying the price around, manipulating the price around. It worked really well. Then there was a
19:39final of the final, final five guys. And this is like, if you win this, you're getting into the
19:44big thing. I came in with a really low card, really low card. So I know the total is going
19:50to be low. And my strategy was to bully the price up and to try and sell at a high price. So I just
19:55bullied up, bullied up, bullied it up. Game finishes and I spent the whole game selling
19:59because at a high price. And like mathematically, it was almost impossible for me to lose
20:04because the price was really high and my card is really low. But then when everyone turned
20:09their cards over, the other cards in the game were the seven highest possible cards,
20:13which the chances of it happening by chance are like one in maybe like 15 million or something,
20:19ridiculously impossible chance. So I realised, I knew that the game must have been rigged,
20:23but I don't think anyone else noticed. And I was just thinking like, what the ****? These guys
20:29have rigged the game against me. I couldn't really. Then the guy goes to the front to announce
20:34the winner and he announced that I was the winner, even though my actual score in the final
20:39was like negative. And he said, Gary's scores in the warm-ups were so good, we wanted to test him
20:46in the final to see what he did, if everything was against him, to see if he would really back
20:50himself. And he did back himself. That's what we like to see. So we decided he's the winner of the
20:55game, even though I actually lost. Tells you a little bit about the crazy people that work in
21:01this world, I think. The guys who did come into the card game tended to end up being really good
21:06traders at the bank. This CV cover letter, there's a massive amount of classism in that.
21:10Because everyone has the top grade. Basically, it's based on extracurriculars. It's based on
21:15how good you are at **** clarinet, basically. But then kids like me will poke holes in your
21:19objective methods, but they're probably going to be the best traders, really. So I was a professional
21:25trader for Citibank 2008 until 2014. I was at LSE, the London School of Economics, before I
21:31went into banking. Everyone at LSE is obsessed with banking, obsessed with trading. So you get
21:36a good sense of what everybody wants. And back before 2008, everybody wanted to work in credit,
21:41which of course is the area that blew the global economy up. But the guys who were working before
21:46they blew the economy up were making a ton of money. So everybody wanted to go there.
21:50I went into this unfashionable area because they said, you can start straight away and you can
21:55start trading straight away, which is really unusual. But they let me do that. Trading
21:58changed in the early 2000s, 2000s, 2010s. It became a lot more mathematical.
22:06There's this cultural shift where it goes away from being these kind of guys, ex-rugby players,
22:13of which there used to be a lot of that kind of thing in banking, towards LSE graduates,
22:19Harvard graduates, maths graduates, physics graduates, who are very honourable with maths.
22:24I think American Psych is very good, actually. It shows this guy's in banking and he becomes a
22:30murderer and he's really clearly a dickhead. But I knew people at LSE that would memorize
22:34all of his lines by heart. And they loved him. And the reason is because he's really handsome.
22:41He's really rich. He's in great shape. He's got a really beautiful girlfriend. He's got
22:44a really expensive flat. And I think no matter how much you try to say, but he's a dickhead,
22:51if you've put that in front of an 18, 19-year-old boy,
22:54you're going to f*** a lot of 18, 19-year-old boys up.
23:02I'd wake up at, say, 5.30. 7.30 was like, you have to be in by 7.30 or you're late. So I'd be up at
23:095.30, have my little BlackBerry, looking through the emails, digging through the prices, have a
23:14bit of breakfast, have a shower, cycle down through East London, get to work about, try to get there
23:20roughly about 7. So the trading floor in London is massive. Massive, massive trading floor.
23:25It's in a big skyscraper in Canary Wharf, which is in the east end of London, not far from where
23:30I grew up, not far from where I live now. It's only on the second floor. It's not on the top
23:33floor. The trading floors are all quite low down. These are the floors that are making the most
23:37money. Long, long rows of men with huge walls of screens, sort of nine monitors, 12 monitors up in
23:43a big square rectangle around them. And most people have that. And they'll be sitting back
23:49to back in these long rows. You know, it's classic skyscraper environments. My trading desk
23:56was in the foreign exchange department, which back then had the very sort of boisterous,
24:01laddish atmosphere. I came in first day in a suit and the guys were like, no suits, no ties.
24:07Whereas I think the European banks like Credit Suisse and Deutsche Bank, they like you to wear
24:11suits. And then I'd be checking my positions. You know, really, there was a really big rush
24:18in the morning from sort of 8am to about 10.30am, dealing with all the customers. So between 8 and
24:24sort of 10.30, 11 would just be a mad rush. By then I'd be knackered. I'd go and get massive
24:29Nandos, sit there, smash my Nandos down. Then in the afternoon, it's actually quite chill because
24:36Citibank offers a 24-hour pricing service, which means there's a period where if you call up,
24:40you get the London trader. There's a period where you get the New York trader. And there's a period
24:44where you get the Sydney trader. By our afternoon, we've handed over to New York. They're doing the
24:48business. So we're sitting around reading the newspaper, sort of chatting. But in the evening,
24:54yeah, you chill out, read the paper, check you're making money. I was making a lot of money, so sort
24:59of celebrate. Then we'd finish at about five. Earlier on in my career, I'd get dragged out a
25:05lot with like the senior traders drinking and going to fancy restaurants. And I kind of hated
25:10that to be honest. But by the end of my career, I was back 24. I was, you know, I'd go, I'd cycle
25:18back home. I'd leave about five, cycle home, go to the gym, cook dinner with my flatmate, you know,
25:23watch the football if it's on. Obviously, I'm waking up at 5.30. So, you know, I wasn't like
25:28big on the nightlife. A lot of people were waking up at 5.30 and also big on the nightlife. And I
25:33didn't understand how they did it. But I think I understand more now. The thing is, even when
25:36you're there, really, there's only sort of three or four hours of hard work. And that was because
25:41I was the Euro trader, which was like, that was definitely the most work of anyone. What you
25:46really were at the time, you were the risk holder. You were the risk holder. Your job was to be the
25:53person who made the decisions and took the risk and who took the hit if you were wrong.
26:03First thing says there's lots of different kinds of traders trading lots of different kinds of
26:06things. I was an interest rates trader. It means I was borrowing and lending money. Interest rates
26:14traders borrow and lend money. And the idea is quite simple. You want to borrow at a low interest
26:18rate and you want to lend at a high interest rate. So a lot of what is done on that desk,
26:23the start desk, the short term interest rates trading desk is one day loans. Corporations,
26:31pension funds, hedge funds that have loans running out will come to people like me and say,
26:36we've got a loan in six months. What interest rate will you give us for a loan starting in
26:40six months time? On a very, very basic level, when the economy is good, sometimes just because
26:46inflation is overheating, the central banks raise rates and they cut rates when the economy is weak.
26:52So in a very broad sense, although we are also looking at inflation,
26:57really we're trying to judge the strength of economies. In my desk, there were about 10
27:02traders and each trader's job was to look at a different currency and you kind of get promoted
27:06through the ranks. It's split between what you'd call rich world currencies and what they call
27:12emerging market, poor country currencies. So on my desk, the rich world desk, we're basically doing
27:16Europe, Japan, North America, Australia, New Zealand. First I was, you know, desk junior,
27:23buying the coffees. Then I was New Zealand dollar trader. Then I was Swiss franc trader. Then
27:28eventually I was euro trader. Then I moved to Japan and I was yen trader. As interest rates
27:33traders, we make loans. We borrow and lend money. We try to borrow cheaper and lend higher. A lot
27:38of people do that by a variety of dodgy ways. What I tried to do and what I think is most interesting
27:45is I did that by trying to predict strength of economies. So in 2011, by the time I become a
27:49really profitable trader, Citibank, for some reason, had this big thing where they wanted
27:53to become the biggest bank in the world in terms of volumes traded. And because we're doing one
27:58day loans, it's massive volume because if you borrow money for a day, you have to come back
28:02every day. It's stupid, but it looks like really big volume. And it meant that senior management
28:08had asked me to try to do as much trades as I could. So I was probably lending and borrowing
28:12between currencies, probably not far off a trillion dollars a day of a variety of currencies,
28:18which was ridiculous, but it's what I've been asked to do. I was in a situation towards the end
28:27of my career where I was trying to get fired. I was a very successful trader, but for a very
28:31short time. And I quit when I was like 27, I think. I was just so in the game and I was kind of,
28:37I was quite dehumanized in a way. I'd done it to myself, you know, but I mean, how do I balance
28:42this love for being the best with also like being a human and taking care of myself and also
28:49fulfilling my responsibility to a collapsing society? The traders don't think it's their job
28:54because they're trying to do trade to make money. The politicians are trying to win elections.
29:00The academics are trying to win, are trying to write fancy papers.
29:05The guys in media are trying to get clicks and get views, you know. Actually, nobody's trying
29:12to fix it. My big success was in 2011. And that came from this realization that the economy was
29:19never going to get better, that we had a growing crisis of inequality that wouldn't be resolved,
29:23that the rich would get richer and the ordinary people would get poorer, living standards would
29:28collapse, things would collapse. And I put that bet on. And I never really stopped to think,
29:35what does that mean? Because my job was to bet on these things. You know, it's,
29:40if your job is to look at the economy, think, is it going to be strong? Is it going to be weak?
29:45That's what you do. You know what I mean? And by the end of that year, 2011, I'd become Citibank's
29:52most profitable trader in the whole world by this bet that society would collapse. And everybody
29:57could see that I'd done that. Nobody turned around and said, should we do something? There's not like
30:02a bell you can go and ring, you know. I think it's worth realizing, right, the best paid 10,000
30:08economists in the world are all traders. Towards the end of my career, I decide I want to leave.
30:13And I tell my boss I want to leave. And my boss takes me out for this dinner and he told me a
30:17story about a trader, a young trader at Deutsche Bank who, you know, nice guy, good trader,
30:24wanted to leave. The only problem is, Deutsche didn't really want him to leave, you know. So
30:30they went through all of his, looked through some of his past trades and his emails, you know.
30:37There wasn't really anything in there, but there was enough, you know.
30:41There was, you know what I mean, enough to take him to court. And he rolled through court for
30:45years and years and eventually the guy was bankrupted. And then he literally said to me,
30:50you know, I like you. I think you're a good person. But sometimes bad things happen to good people.
30:58We can make life very difficult for you. You're going to find out about that. It's so obviously
31:02similar to the way that, like, gangsters speak. That's exactly the same kind of person that goes
31:06into drug dealing. Exactly the same kind of person. And I can't help but think that a lot of
31:13the guys who become traders, if they grew up on the street I grew up on, would have been drug
31:18dealers. And a lot of the kids selling drugs in Ilford, if they went to the same boarding school
31:23as Rupert, and if they went to LSE, they would have become traders. Really, you see, because
31:27it's the exact same personality type. I come from a very poor background and the people who are
31:31being hurt by what's happening in the economy are people that are exactly like me when I was a kid
31:37and people that are exactly like my mum and like my dad and like my sister and like my friends I
31:40grew up with. But it was a really a long time before I ever started to explicitly think,
31:47should we do anything about this? And by then I've been kind of like kicked out to Tokyo.
31:51My junior was this very, very, very posh, very rich, very wealthy, but very smart Australian kid.
31:58And I said to him, you know, do you think we should do something? And he was like, about what?
32:06And I was like, you know, about like collapsing global economy. And he was like, yeah, we put that
32:13trade on, we bought the green euro dollars. And I was like, well, yeah, yes. But, you know, do you
32:20think we should do something? And he was like, no, I don't understand what you mean. You don't go into
32:24trading to save the world. But you kind of assume that there are people whose job it is to look
32:29after the world, you know, like politicians, most obviously, economists at universities,
32:35economists at central banks, like the Fed, like the Bank of England, economists in the media.
32:40You kind of think these guys, their job is to look after it. But what was becoming increasingly
32:45clear to me was, well, our job is not to fix it. Those guys whose job is to fix it, they're
32:52definitely not going to fix it. Like I want to leave and work for charity and the banks are just,
32:56you know, the senior management is just very strongly implying, well, we're going to sue you.
33:00And at that point, they have no reason to sue you. They're just going like, well, you do that,
33:03we're going to sue you. And I think, to be honest, that high levels of banking and probably high
33:07levels of a lot of other industries, that's how it works. Like the law is an arm of power. Like
33:13they're like, OK, if you piss us off, we're going to find a way to sue you. And I think that is kind
33:18of how it works. So I suspect that a lot of the people who get actually sued by banks are not the
33:23people who did bad. They're the people who pissed off the wrong people. So I get 18 months like
33:26wandering around Tokyo, like studying Japanese and learning to draw. They make me sit in the
33:30corner. So I'm just sitting in the corner of the office, like studying Japanese and drawing
33:34pictures of the Beatles and stuff. And in a way, it was nice. It was nice because it gave me a bit
33:39of time to sort of think about what I was doing. You know, I played that final game pretty well,
33:44despite the fact that I was in terrible mental health condition at the time. And I got them
33:49into a position where I think first of all, I think they thought because I was kind of a young
33:54kid from kind of a rough background making a lot of money, I think they thought that if they dug
33:58far enough, they'd find some dodgy sh** in there. But really, I was just betting on like the world
34:02collapsing every single year. That's what I was doing. And in the end, two things happen
34:05simultaneously, which is I start sending these mad emails every day to like the CEO and the global
34:10head of HR. And one guy got fired and then I get let out. So I don't really know whether it's
34:18because I started going mental and causing big problems or if it was because this guy got fired.
34:22And I'll never know which one of those things, but eventually I got out, which is why I'm here
34:28and not stuck in a skyscraper. It's all a big game. It's all a big game. It's all a big power
34:33game. And like, you can kind of get away with whatever you want as long as it's not in the
34:37bank's interest to go for you. You know, and it's, it's horrible. But you know, this is the world
34:42that we've built, you know, where if you're very, very rich and very, very powerful, you can get
34:46away with a lot. I don't hate rich people. I am a rich people. I don't blame rich people. I'm an
34:57economist that makes millions of pounds by predicting the future. And I've got a good track
35:02record. These guys will get richer and richer and they will eat the middle class alive. And it's
35:06not because they're bad and it's not because they're evil. It's because that's what compound
35:10interest does. If you are a guy who's worth a hundred million dollars, you're going to make
35:14five million dollars a year passive income. And you are going to use that money to buy the assets
35:20that ordinary families, kids need. That is the direction of travel. That is where we're heading
35:25up. We will lose the middle class. There's obviously that one scene in The Big Short. A
35:28couple of guys make a lot of money by betting on like the collapse of the American economy.
35:32And they're going to make a ton of money. And they're really like, they're really happy and
35:35they're dancing. And there's this Brad Pitt character that turns around and he's like,
35:37stop dancing. And they're like, why? We just made a lot of money. It's like, you made money
35:42betting on the collapse of the economy. You know what that means? That means people are losing their
35:46homes. That means people committing suicide. That means families breaking down. And obviously for
35:51me, as someone who's done the same thing, like you feel that. My free market rate is two million
35:55dollars a year. For three years, I was out here in the media, on YouTube for free, telling people
36:03exactly what was going to happen in COVID. You can go back and look at my early videos,
36:06my early articles in 2020, predicting COVID. Everything I said was going to happen exactly
36:11happened. Nobody was listening. It was hard. It was hard because you're used to getting up.
36:16You know, I was trading nearly a trillion dollars a day. You know what I mean? And you're used to
36:20getting up and coming to the desk and bam, bam, bam, bam, bam, smashing all that money through.
36:24And I would wake up in the morning and you just have this like energy, you know, this energy. And
36:28you know, of course I made millions of dollars. But then once you quit, your income is zero.
36:33You know, I just had this really strong feeling like you're being unproductive,
36:36you're wasting your time. And I went to like, I went to like psychiatry on the NHS.
36:40And then she gave me like a little like a timetable to fill in, putting everything you're
36:46doing on here. And she looked at it and she was like, you're really, really busy. But I'd become
36:50so used to this hothouse environment where you just feel like you have to be 100% all of the time
36:56that anything other than like working 120% felt like doing nothing to me. At the beginning of
37:01COVID, I picked up trading again because there was a lot of money on the table. So I still do
37:04do a bit of trading. It just sits in investments. You know, obviously I quit my job and the work I
37:08do now, it's educational work trying to explain to people the importance of inequality. I don't
37:14get paid a lot of money for it. You know, in fact, very often I get paid no money for it.
37:18So it funds my work, it funds my life, you know, hopefully one day in the future, it will pay for
37:25me to have a family with a bit of financial security. You know, who reads articles in
37:30the Guardian about economics, like rich people, basically. And I want to talk to ordinary people.
37:34So I moved to YouTube, started making a YouTube, made a load of videos. But of course, nobody was
37:39watching them. And you know, I've got a degree from LSE, I've got a degree from Oxford. I'm a
37:43multimillionaire, one of the very successful ex-trader. I put videos out about economics and
37:48people say, who the **** is this guy? He's not an economist. You know what I mean? And somebody
37:52called me up and I've read one of your articles, you've thought about writing a book. And I was
37:55like, no, not really. But then I thought, you know, if I could use this story, it's a **** good story,
38:01you know, expelled from school, wins a job in a card game, top trade in the world by betting on
38:06the collapse of society, you know, bank tries to stop him from leaving. It's a good story. I thought
38:10if I could tell that story well, then hopefully you will know with the confidence I have that
38:14this is going to go down the toilet. And if enough people know that, then we can stop it.
38:19Did you have to sign any NDA or like keep any secrets?
38:30I'm not allowed to answer that question, unfortunately. Legal reasons, I'd love to
38:33tell you, but I can't answer it. Yeah, yeah. It's quite bizarre. You might be like,
38:38you might think I'd be able to say I did sign an NDA, but I can't talk about these things.
38:43But unfortunately, I cannot discuss whether I signed an NDA or not.
38:47I'm a producer on Authorised Account. If you enjoyed this,
38:50please subscribe and comment below with more topics you'd like to see us cover.