Episode 7. The New Deals



1980s Wall Street was as inventive as it was ostentatious. New kinds of deal turned the relationship between finance and society on its head: collateralized mortgage obligations made homeowners into raw material for profit, while the leveraged buyout allowed corporate raiders to tear up companies in the name of shareholder value, all this backed by the new science of financial economics. This episode takes a random walk around some of finance’s most rapacious innovations.

Transcript

The investment-banking firm of Pierce & Pierce occupied the fiftieth, fifty-first, fifty-second, fifty-third, and fifty-fourth floors of a glass tower that rose up sixty stories from out of the gloomy groin of Wall Street. The bond trading room, where Sherman worked, was on the fiftieth. Every day he stepped out of an aluminum-walled elevator into what looked like the reception area of one of those new London hotels catering to the Yanks. Near the elevator door was a fake fireplace and an antique mahogany mantelpiece with great bunches of fruit carved on each corner. Out in front of the fake fireplace was a brass fence or fender, as they called it in country homes in the west of England. In the appropriate months a fake fire glowed within, casting flickering lights upon a prodigious pair of brass andirons. The wall surrounding it was covered in more mahogany, rich and reddish, done in linen-fold panels carved so deep, you could feel the expense in the tips of your fingers by just looking at them. All of this reflected the passion of Pierce & Pierce’s chief executive officer, Eugene Lopwitz, for things British. Things British, library ladders, bow-front consoles, Sheraton legs, Chippendale backs, cigar cutters, tufted club chairs, Wilton-weave carpet were multiplying on the fiftieth floor at Pierce & Pierce day by day. Alas, there wasn’t much Eugene Lopwitz could do about the ceiling, which was barely eight feet above the floor. The floor had been raised one foot. Beneath it ran enough cables and wires to electrify Guatemala. The wires provided the power for the computer terminals and telephones of the bond trading room. The ceiling had been lowered one foot, to make room for light housings and air-conditioning ducts and a few more miles of wire. The floor had risen; the ceiling had descended; it was as if you were in an English mansion that had been squashed.

This is Tom Wolfe, of course, from his remarkable Bonfire of the Vanities, as we first encounter the workplace of the protagonist – I won’t say hero, for he’s certainly not that – master of the universe, possessor of a Yale chin – Sherman McCoy. It turns out that this kitsch Englishness is just the drapery on something much more primal. Wolfe continues…

No sooner did you pass the fake fireplace than you heard an ungodly roar, like the roar of a mob. It came from somewhere around the corner. You couldn’t miss it. Sherman McCoy headed straight for it, with relish.

On this particular morning, as on every morning, it resonated with his very gizzard. He turned the corner, and there it was: the bond trading room of Pierce & Pierce. It was a vast space, perhaps sixty by eighty feet, but with the same eight-foot ceiling bearing down on your head. It was an oppressive space with a ferocious glare, writhing silhouettes, and the roar. The glare came from a wall of plate glass that faced south, looking out over New York Harbor, the Statue of Liberty, Staten Island, and the Brooklyn and New Jersey shores. The writhing silhouettes were the arms and torsos of young men, few of them older than forty. They had their suit jackets off. They were moving about in an agitated manner and sweating early in the morning and shouting, which created the roar. It was the sound of well-educated young white men baying for money on the bond market.

The sound of well-educated young white men baying for money.

Wolfe, already a famous long-form journalist, did his research properly. This isn’t just any trading room, but the forty first floor of Salomon Brothers, New York: the biggest and most brash of all the 1980s investment banks. It’s the same trading room that Michael Lewis uses as the background for his extraordinarily popular debut, Liar’s Poker. The two writers were there at the same time, and their books tip a symbolic wink to each other. There is such a lot in this passage, and we will be back to some of it in another episode: Wolfe’s careful presentation of toxic masculinity, class and racism, especially. He takes delight, over the next few sentences, in showing us the mixture of profanity, youth, and privilege exhibited by these traders, pumped and sweating, cursing, even at the very beginning of the working day.  But for now, I’ll just take the room as it stands, and as Wolfe intended it: as the emblem – and engine – of everything that was wrong with 1980s Wall Street.

Hello, and welcome to How to Build a Stock Exchange. My name is Philip Roscoe, and I teach and research at the University of St Andrews in Scotland. I am a sociologist interested in the world of finance and I want to build a stock exchange. Why? Because, when it comes to finance, what we have just isn’t good enough. To build something – to make something better – you need to understand how it works. Sometimes that means taking it to pieces, and that’s exactly what we’ll be doing in this podcast. I’ll be asking: what makes financial markets work? What is in a price, and why does it matter? How did finance become so important? And who invented unicorns?

In this part of the series I am getting to grips with finance and its role in society. If we want to build a stock exchange worthy of the future – and without wanting to give too much away too soon, I’ll bet that’s going to be small scale, local, and politically respectful – we need to understand how finance got where it is today – vast, global and politically invasive. I’ve suggested its present form is largely the result of changes in the 1980, when the Wall Street financiers became, as Wolfe put it, the ‘masters of the universe’. In the last episode I explored how exchanges were shaped by changes in global political economy and a rethinking of the social contract under governments that embraced the newly fashionable free market ideology. It was during the eighties that the UK’s national industries were sold off and a new class of everyday shareholder was born. He rapidly became known as Sid, inspired by the advertising campaign – under eighties capitalism, even nicknames had to be the produce of corporate endeavour. In the next episode I’m going to explore the automation of stock markets, the move away from open outcry trading pits or the ambulatory trading of London’s Gorgonzola Hall to the miles of wiring described by Wolfe: from the huge open spaces of the Board of Trade’s specially designed hall or the dome of London’s Old House to squashed and cramped, shabby, trading rooms like that of Pierce & Pearce. In this episode, though, I’m going to look what these masters of the universe bought and sold and the deals they concocted, and in doing so I’ll explore the birth of a new kind of social contract, one where finance sits very much on top of the heap. I’ll show a change, too, in the very nature of capital, as it tears itself away from its roots in production and seeks ever higher returns through a proliferation of financial contracts.

—- Trading sounds—[1]

So what were they doing, these traders. What were they trading? What, indeed, were – and are – bonds? The short answer is that a bond is simply a loan contract promising that interest will be paid at a given time until a particular date, when the bond is redeemed and the loan paid off.  Pension funds, governments and corporate treasuries are big holders of bonds, institutions that hold money and need some sort of return but need absolute (or relative) safety too. The notion of safety is itself a highly interesting and problematic one, as we all found out in 2008, and we are going to come back to it in episode nine.  Prices move up and down, driven by sentiment and alternative sources of risk-free interest, usually central bank rates: bonds pay their interest at a predetermined rate, so if interest rates go up, bond prices go down in order to bring those predetermined returns into line. Investors demand higher returns the longer the length of the bond, to compensate for their money being tied up; conversely, as the redemption day nears, prices fall to reflect the limited future yield. This is the yield curve, another central device for plotting the future of markets. If markets are crystal balls, and we only have to open the newspapers to see how many think they are, then the proliferation of bond contracts can only be a good thing. So are the Masters of the universe, pure speculators, trading nothing more concrete than the promise of future returns, but in doing so making this crucially important market happen. That’s the theory, at least.

These perfect market imaginings suppose – yet again – that new markets or goods just appear. It is never that simple. Take the mortgage bond, the instrument at the base of the financial Jenga-tower that decomposed in 2008. In the late 1970s and early 1980s, Wall Street’s eyes lighted on mortgages as a source of possible opportunity. For people whose business was buying and selling debt, the cumulative amount owed by America’s homeowners – following post-war decades of suburban growth that saw home ownership as a crucial part of the American dream – must have been mouth-watering. But there were certain problems. Government regulation during the same period had been heavily skewed towards the interests of the borrowers. According to Lewis Ranieri, the Salomon Brothers trader who pioneered commercial mortgage bonds, the “mortgage instrument becomes so perfect for the borrower that a large economic benefit is taken away from the other participants, including the long-term investor”.[2] That didn’t especially matter because mortgages were owned by small-scale savings banks, known as thrifts in the United States, or building societies in Britain, whose business was conservative, low risk lending to homeowners. Moreover, two giant government-sponsored bodies, Fannie Mae and Freddie Mac, underwrote a portion of these loans with the intention of expanding the pool of eligible borrowers and thus broadening home ownership. These institutions also provided mechanisms through which loans could be resold by the thrifts in order to increase the supply of money into the sector. They bought up loans and resold them in bundles as bonds, but the results were attractive only to specialist investors. You see, as an investment, the mortgage had several problematic characteristics. It was small. It was attached to an individual, and therefore inherently unpredictable. Mr and Mrs Smith might lose their jobs, or die, or remortgage. The last was a particular issue.

Regulation designed to protect homeowners allowed anyone to pay off a mortgage without penalty at any time. This prepayment risk made mortgages unattractive investments for pension funds, corporations, and governments whose primary objective was long-term stability: if interest rates went down, rather than holding a more valuable bond, investors will be left with cash returned by homeowners changing to cheaper deals, cash for which they couldn’t find a lucrative home. As a result, if interest rates went down the price of mortgage bonds changed little, as everyone knew the underlying loans would already be in the process of being redeemed. Michael Lewis chronicles the birth of the mortgage bond in Liar’s Poker. He writes:

‘The problem was more fundamental than a disdain for middle America. Mortgages were not tradeable pieces of paper; they were not bonds. They were loans made by savings banks that were never supposed to leave the savings banks. A single home mortgage was a messy investment for Wall Street, which was used to dealing in bigger numbers. No trader or investor wanted to poke around the suburbs to find out whether the home owner to whom he had just lent money was creditworthy. For the home mortgage to become a bond, it had to be depersonalized…At the very least, a mortgage had to be pooled with other mortgages of home owners. Traders and investors would trust statistics and buy into a pool of several thousand mortgage loans made by a Savings and Loan, of which, by the laws of probability, only a small fraction should default. Pieces of paper could be issued that entitled the bearer to a pro rata share of the cash flows from the pool, a guaranteed share of a fixed pie . . . Thus standardized, the pieces of paper could be sold to an American pension fund, to a Tokyo trust company, to a Swiss bank, to a tax evading Greek shipping tycoon living in a yacht in the harbour of Monte Carlo, to anyone with money to invest.’[3]

In 1977 Bank of America, in conjunction with Ranieri’s team at Salomon Brothers, launched the first private mortgage bond. The process, which Ranieri dubbed securitisation, was elegant in principle, if complex in actuality. Here’s Lewis, again, on the construction of the ‘collateralized mortgage obligation’ or CMO:

‘The CMO addressed the chief objection for buying mortgage securities, still voiced by everyone but thrifts and a handful of adventurous money managers: who wants to lend money not knowing when they’ll get it back? To create a CMO, one gathered hundreds of millions of dollars of ordinary mortgage bonds—Ginnie Maes, Fannie Maes and Freddie Macs. These bonds were placed in a trust.

The trust paid a rate of interest to its owners. The owners had certificates to prove their ownership. These certificates were CMOs. The certificates, however, were not all the same. Take a typical 300 million dollar CMO. It would be divided into three ‘tranches’ or slices of 100 million dollars each. Investors in each tranche received interest payments. But the owners of the first tranche received all principal repayments from all 300 million dollars of mortgage bonds held in trust. Not until first tranche holders were entirely paid off did second tranche investors receive any prepayments. Not until both first and second tranche investors had been entirely paid off did the holder of a third tranche certificate receive prepayments. The effect was to reduce the life of the first tranche and lengthen the life of the third tranche in relation to the old-style mortgage bonds. One could say with some degree of certainty that the maturity of the first tranche would be no more than five years, that the maturity of the second tranche would fall somewhere between seven and fifteen years, and that the maturity of the third tranche would be between fifteen and thirty years. Now, at last, investors had a degree of certainty about the length of their loans. (Lewis, 1989: 160–1)

—– market traders —-[4]

There is an interesting story in the background about the gentrification of finance over the same period. Ranieri had worked his way through the ranks of Salomon, from mailroom to the partnership. By the mid-eighties, however, the university of lifers were being squeezed out by the Ivy League graduates gleefully described by Wolfe. This was also the case in Britain. In 1982, the London International Financial Futures Exchange, or LIFFE. It was deliberately modelled on the trading pits of Chicago, and it offered London a first sight of the loudmouth, barrow boy trader that came to epitomise so much of the nineteen eighties. The LIFFE traders came from the county of Essex, a harsh, flat, damp, grey landscape north-east of London that had soaked up refugees from the city as industrial slums had been cleared. Those who lived there were Sierra Women and Men and more. They had made money, bought property, and they wanted the world to know: ‘the affluent, industrious, ruthless and caustic typical inhabitants of South Essex’, writes the anthropologist Caitlin Zaloom, quoting a British member of Parliament, were ‘the shock troops of the Thatcherite revolution, the incarnation of the new economic freedom she had bestowed upon a broadly ungrateful nation’.[5]  In London they didn’t disappoint. Their motto was spend, spend, spend: traders distinguished themselves by their flamboyant dress sense and their equally flamboyant expenditure. They shouted on mobile phones before anyone else even owned one. They became the archetypal figures for the new City, the poster boys of the early nineteen eighties. They were coarse, loudmouthed and abrasive, London’s counterpart to the mortgage bond traders of Wall Street. But these Essex boys who came to trade on LIFFE were rapidly displaced by university graduates qualified in economics and the hard sciences. One primary cause was the enormous increase in the complexity of the contracts that confronted market traders, and to get there we should trace another story, and the birth of another kind of contract.

You may recall from my second episode that the Chicago Board of Trade evolved organically as a means of providing a speculative market in the future prices of agricultural goods. You may also recall how disagreements over the legal and moral validity of futures trading found their way to the Supreme Court, where in 1905, Chief Justice Holmes declared that speculation ‘by competent men is the self-adjustment of society to the probable’. This debate still centred on agricultural goods, however, and although Holmes recognised the speculators’ practice of setting off, or settling deals in advance, the point remained that the goods could be delivered if so desired. This legal distinction separated legitimate, legal speculation from illegitimate, and criminal, speculation in the future prices of financial securities. Such things could never be delivered, containing nothing more tangible than the promise of future cash streams. Moreover, financial futures had been implicated among the causes of the disastrous financial crisis of 1929, still very much in the mind of American legislators. But times were hard in the late 1960s with regulated commodity prices leaving little opportunity for speculation: traders left sitting on the steps of the pit, reading the paper. The Board of Trade – alongside its junior counterpart the Chicago Board of Options Exchange, or CBOE – worked hard to make financial futures legal. Donald MacKenzie and Yuvall Millo trace this story. The CBOE employed lobbyists, lawyers and enrolled the new science of financial economics. This posited that stock prices moved in a random walk in response to news, the basis for today’s efficient market hypothesis. Such randomness could only mean uncertainty, and financial options could be deployed as a means of protection against this, just as they were in dealing with future weather changes and market conditions for agricultural products. None other than Milton Friedman wrote an account of the benefits of a currency futures exchange, for which he received $5000 from the CBOE, perhaps forty-thousand in today’s money.

At the same time  a small group of academic economists – Fisher Black, Myron Scholes and Robert Merton – made a startling innovation, producing ‘options pricings theory’, one of the  most important contributions of twentieth century economics and for which Merton and Scholes scooped the Nobel Prize in 1997. I can’t explain it any better than MacKenzie and Millo, so I’m going to borrow their words, trimmed slightly. If one assumed that

‘the price of a stock followed a… random walk in continuous time… it was possible to construct a continuously adjusted portfolio of underlying stock and government bonds or cash that would “replicate” the option: that would have the same return as it under all possible states of the world. Black, Scholes, and Merton then reasoned that the price of the option must equal the cost of the replicating portfolio: if their prices diverged, arbitrageurs would buy the cheaper and short sell the dearer, and this would drive their prices together.[6]

Simple! Or maybe not. But that doesn’t really matter for our story because, as MacKenzie and Millo point out, the new maths played an important part in legitimising the new kind of trading:

Black, Scholes, and Merton’s fellow economists quickly recognized their work as a tour de force. It was more than a solution of a difficult technical problem: it showed how to approach a host of situations that had “optionlike” features; and it linked options to the heartland theoretical portrayal of capital markets as efficient and permitting no arbitrage opportunities. The whole weight of orthodox modern economics could now be deployed against anyone still claiming options to be disreputable.[7]

With the advent of options pricing theory, the yield curve, and other such mathematically complex methods of valuing trades, the barrow boys of Essex and street traders of New Jersey were no longer equipped to deal in the market. This bond trading was the province of young Turks, as Lewis calls them:

‘After the first CMO (writes Lewis), the young Turks of mortgage research and trading found a seemingly limitless number of ways to slice and dice home mortgages. They created CMOs with five tranches, and CMOs with ten tranches. They split a pool of home mortgages into a pool of interest payments and a pool of principal payments, then sold the rights to the cash flows from each pool (known as IOs and POs, after interest only and principal only) as separate investments. The homeowner didn’t know it, but his interest payments might be destined for a French speculator, and his principal repayments for an insurance company in Milwaukee. In perhaps the strangest alchemy, Wall Street shuffled the IOs and POs around and glued them back together to create home mortgages that could never exist in the real world.’[8]

These kinds of deals were only possible due to increasingly powerful methods of calculation. The new mechanisms of financial engineering, options pricing theory, implied volatility, various copula and log-normal distributions, none of which I can claim to understand, transformed financial markets. The confluence of entrepreneurial ambition, politics, and theoretical innovation backed up by advances in computing power and technical modelling takes us to a place where existing restrictions seem outmoded and regulation is swiftly changed. Economists, regulators and traders alike began to look towards free-market utopia where a proliferation of financial contracts could cover every conceivable trade and outcome. The road led, inexorably, to the crisis of 2008. But I want to emphasise the process by which our individual financial arrangements – and the terms on which they are offered – became of interest to, and then subject to the discipline of, high finance. The mortgage moved from being a policy tool designed to expand the reach of homeownership to being a financial instrument crucial in the construction of investment banks’ profits. This, in turn, makes the interests of homeowners and financiers widely divergent, a problem that underwrote the global crash. We might call this process, by which ever more of our everyday interests become subject to the purview of financial markets, financialization.

——–

At the same time as the traders of Wall Street were taking hold of our mortgages, another kind of financier was taking charge of our jobs. The corporate raider, epitomised by Gordon Gecko in Oliver Stone’s film Wall Street (a film premiered at almost the same time as The Bonfire of the Vanities), was a new species of financial practitioner, spawned by the 1980s. Raiders like T Boone Pickens, Sir James Goldsmith, and Tiny Rowland became renowned, even glamorised, as ruthless hunters on the cutting edge of capitalism. Their prey – the conglomerate.

Throughout the 1950s and 60s the conglomerate had become a fashionable organisational form. Companies bought other companies, creating empires of unrelated businesses, wherever managers felt that capital could be productively used. The conglomerate was a creature of its times, a product of managerial capitalism where business invested money in making and selling things, and the skills of managers were to do with organising production and generating effective returns on capital from doing so. Conglomerates benefited from a favourable legal environment and tax relief on debt which made borrowing to buy cash generative businesses a sensible choice. Investment bankers had, of course, been complicit in the growth of these conglomerates, eagerly encouraging chief executives to do deals and pay hefty advisory fees in the process. But now, the era was over. Conglomerates found themselves unfashionable, their share prices depressed. These lower share prices presented the corporate raiders with an opportunity. They could buy the business for a significant premium on existing share prices, and thereby claim that they are returning value to shareholders. But the amount they would pay would still be less than the asset value of the firm, and they could break the firm up, selling businesses and assets and keeping the difference. But how to raise the money for such an enormous purchase? Why, borrow it, of course…

‘In 1978 the firm Kohlberg, Kravis and Roberts’, writes Daniel Souleles, ‘then called an investment bank, now a private equity firm, bought a manufacturing conglomerate, Houdaille for $355 million dollars. Not only was this four times more than KKR had ever bid to buy a company’s stock and manage it privately but KKR only had 1/300th of the total price. The rest of the money they spent, the remaining 99.7% of the price of Houdaille, they made up with borrowed money, either in the form of capital from investors, or loans from banks.’

KKR hit on a winning strategy. ‘It is not often,’ says Souleles, that one can pinpoint and describe a new and durable way people get rich. But KKR’s purchase of Houdaille with very little of their own money, and quite a bit of borrowed money, affords one such moment. KKR’s innovation of the leveraged buyout [LBO] would set the standard the industry still follows today.’ The magic comes in the innovation that the target firm should borrow the money to buy itself. This makes perfect sense. There’s no way that a small investment banking boutique could borrow enough to buy a sprawling conglomerate. But the conglomerate can. It will offer bonds – and Wall Street traders led by Ivan Boesky pioneered low quality ‘junk’ bonds for just this purpose, risky and punitively expensive for the borrower.

The conglomerate’s new managers (or the existing managers who have cut a deal with the raiders, like the hapless protagonist in Wall Street) can, however, offset the exorbitant cost of the debt against profits. As Souleles says, KKR could see value in the firm that the market could not.

Raiders cut these conglomerates up and sold the pieces on. They closed down ‘underperforming’ (in scare quotes) firms. They restructured, moved employees around, or simply sacked them. Gecko is pictured threatening to expropriate the employees’ pension fund. Yet these moves were justified by the suddenly fashionable theory that only the interests of shareholders mattered. You will recall from the very first episode how two academics – Jensen and Meckling – posited that managers were the agents of shareholders and should be incentivised to work for them, rather than featherbedding their existences at the expense of profits. In all fairness, conglomerates were renowned for such practices. The classic account of one of these deals, Barbarians at the Gate, paints a picture of RJR Nabisco’s senior management as cocooned in a world of private jets and country club memberships, using the firm’s incredible cash flows to satisfy every whim. Plunging a firm deep into debt could be told as imposing financial discipline on these soft, pampered executives. At the same time those executives were likely to receive substantial holdings of stock as a reward for making such changes; Jensen and Meckling had argued that we can only expect chief executives to work for shareholders if we make them shareholders too. So the soft, pampered executives became wealthy, pampered executives, the corporate raiders became even richer, and the pain of meeting debt repayments was felt in the warehouses and factories, or perhaps in the places where the warehouses and factories used to be. The ethnographer Karen Ho argues that these narratives allow the shareholder to be ‘positioned as the victim, the victim, denied his rightful role in the modern corporation by manager-usurpers. It is partly this notion of the wronged owner reclaiming his just rewards that has fuelled such righteous (and moralistic) activism for shareholder value.’ The focus on shareholder rights helped to deflect scrutiny from the manifestly negative consequences of most LBOs in terms of ‘a decline in shareholder value itself to massive losses in profits, corporate morale, productivity, and jobs.’[9] After all, Milton Friedman had argued that the social obligation of business was to its shareholders, and Wall Street was all too happy to oblige, especially while it made a killing doing so.

Souleles warns that we shouldn’t fall into the trap of presenting wall Street as a homogenous whole. This is true. Even in this episode there are traders and private equity engineers, barrow boys and elite college graduates, people from ethnic minorities and Connecticut wasps. People have varied motivations, even if these all fall within the big tent of making money. Those inflicting great harm on people’s everyday lives can, as Ho shows us, remain convinced that they do so in pursuit of a greater good. It’s complicated. But if we step back to take in the big picture, we can see similar processes at work across the three interconnected domains I have explored: mortgage bonds, financial futures and the leveraged buyout structure. In each new politics, new kinds of deal, new arrangements slowly inverting the relationship between finance and society, so that stock exchanges – or bond or futures exchanges – no longer exist to serve society, but to exploit it. We see capital shaking off its chains and taking flight – a metaphor that is, as the great theorist Frederic Jameson points out – all too literal.[10] When, in the first episode, I described stock markets as pivotal in the mechanisms of contemporary wealth distribution, I was thinking of just this state of affairs. The young, privileged traders of the forty-first floor, baying for money, became masters of the universe through the sheer dislocated power of finance capital. Last week we saw the battles between the newly propertied Sierra men and women and the older forces of organized labour There’s the beginnings of another class war here, between the very rich and everyone else. This is with us today, in a world of offshore banking and fluid, stateless capital. The transition to a truly borderless, global capitalism, however, could only come about as a result of one final change that swept through markets in the 1980s: the transition from pit to screen, the automation and digitization of the exchanges. That’s the subject of our next episode.

I’m Philip Roscoe, and you’ve been listening to How to Build a Stock Exchange. If you’ve enjoyed this episode, please share it. If you’d like to get in touch and join the conversation, you can find me on Twitter @philip_roscoe or email me on philiproscoe@outlook.com. Thank you for listening, and see you next time.

 

 

 

[1] Sound recording from ‘touchassembly’ via freesound.org, under a creative commons attribution licence https://freesound.org/people/touchassembly/sounds/146268/

[2] Quoted in Donald MacKenzie, “The Credit Crisis as a Problem in the Sociology of Knowledge,” American Journal of Sociology 116, no. 6 (2011): 1792.

[3] M Lewis, Liar’s Poker (London: Coronet, 1989), 99-100.

[4] From www.freesound .org under a creative commons licence. https://freesound.org/people/deleted_user_1116756/sounds/74460/

[5] At the risk of an overcomplicated citation, this is Zaloom quoting Nicholas Farrell, writing in the Sunday Telegraph, 10 November 1991, himself quoting a Member of Parliament. It is a comment made nearly ten years since the event, but still a great line. Caitlin Zaloom, Out of the Pits: Traders and Technology from Chicago to London (Chicago: University of Chicago Press, 2006), 77.

[6] Donald MacKenzie and Yuval Millo, “Constructing a Market, Performing Theory: The Historical Sociology of a Financial Derivatives Exchange,” American Journal of Sociology 109, no. 1 (2003): 120.

[7] Ibid.:121

[8] Lewis, Liar’s Poker, 163.

[9] Karen Ho, Liquidated (Durham: Duke University Press, 2009), 190 and 128.

[10] Fredric Jameson, “Culture and Finance Capital,” Critical Inquiry 24, no. 1 (1997).


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