Alice Adams - Invincible Summer

Trying to steer a derivatives book through this perfect storm would have been nightmarish, and she felt a certain schadenfreude at the thought of Brad Whitman working hundred-hour weeks trying to stem haemorrhaging losses while watching his bonus and probably his career evaporate before his eyes. When she tried to calculate the impact of these market moves on some of the positions she’d left behind in her trading book her eyes watered. But, oh, to be an outsider at such a time was maddening too. No Bloomberg, no market gossip or inside info, just another civilian standing by. The bit of her that wasn’t appalled by the thought of all the people losing jobs and pensions and savings was frustrated at being sidelined in such remarkable times, a mere onlooker to the sort of turbulence that traders see once in a lifetime, if that. She’d come into the market at the beginning of her career at just the time of the Russian default and subsequent failure of Long Term Capital Management, and had been able to do nothing but stand and watch open-mouthed as the real players made and lost fortunes on the back of unprecedented volatility. Now it was happening again, only worse.

Like everyone else, she was kicking herself for not paying attention. The signs had been there all along for those who had been able and willing to break away from the group-think and look on with disinterested eyes. She’d always thought she was one of those people, but now she could see how much she’d bought into the crowd mentality, virtually ignoring the housing bubble inflating and the massive increases in consumer and government borrowing around the globe. Of course, she’d known that these things couldn’t go on forever but for a trader it wasn’t enough to be able to say that; when your time horizons were only ever as far ahead as your next bonus it wasn’t in your interest to constantly focus on the long-term macroeconomic picture. Beneath all the shock and panic on the surface, she thought that if you sat quietly you could hear other rumbles running through the deeper tributaries of social consciousness, as people began to question the very foundations of Western civilization.

*

In the light of all this, Eva had mixed feelings about going back home. On the one hand a bit of familial support wouldn’t go amiss; on the other, she was far from certain that support was what she would be met with. Her arguments with Keith were usually good-natured, but she was feeling more in need of comfort than ideological debate, and she was aware that spending a decade watching the rise of what he viewed as a capitalist kleptocracy had not been easy for her father. Eva eventually took a gloomy train ride down to Sussex and arrived to find him clearly feeling vindicated. She had been there only ten minutes when he rather pointedly turned the volume up several notches for a Robert Peston special on the radio.

‘You’re actually enjoying all this, aren’t you?’ she demanded. ‘My losing my job, the credit crisis? Go on then, just say it. You think I brought down the economy, but it’s bullshit.’

‘Yes, well,’ he said in measured tones that made clear the ‘well’ neutralized any agreement implied by the ‘yes’. ‘I’m not saying that you caused the crisis, of course, but you were a small cog in a big machine that enabled it to happen. The derivatives you traded were so complex that almost no one understands them, so the few people who did could use them to make the numbers look any old way in the short term. Then by the time it all comes out they’re sitting in the Cayman Islands in a Jacuzzi full of dollar bills.’

Eva stared at him across the kitchen. ‘It’s all so simple in your head, isn’t it? Good people are socialists, and capitalists are greedy and evil. Except the world is more complicated than that. Here’s what I really did: I provided liquidity to markets and facilitated the efficient allocation of risk. I helped people to hedge their exposure to inflation and interest rates on things like railways and infrastructure projects, real social goods that simply wouldn’t have gone ahead otherwise.’

‘Well, now. The Victorians managed to build the railways without CDOs.’

Eva rolled her eyes. ‘You’re nostalgic for the days of chimney sweeps and Gin Alley? Give me a break. If you want to bring history into it, you barely need to glance at a textbook to see that markets are what make people free and affluent.’

Keith delivered what he clearly felt was the killer blow in an infuriatingly complacent tone. ‘I don’t even know why you’re defending a system that chewed you up and spat you out.’

‘Because I actually believe in what I’m saying!’ Eva banged her hands against the sides of her head. ‘I don’t think you’ve ever really got that. I know you’ve always thought I was a victim of false consciousness, or else just bending my ideals to fit my self-interest, but I’m an intelligent adult, and I believe in liberal democracy and capitalism and well-run markets. I find you just as incomprehensible as you find me, clinging to ideals that have been shown to cause massive harm every time they’ve been implemented.’

Unused to the argument veering into personal territory, Keith chose to focus on the political. ‘I’m not saying socialism’s perfect, but you of all people should know there’s no such thing as a free market. It’s a Platonic form, an unreachable ideal. Here in the real world, markets aren’t free. There are natural monopolies, geographical constraints, regulatory barriers to entry, cartels as far as the eye can see.’

‘Jesus. If you want to talk about utopian ideals, take a look at your precious communism. It runs completely counter to human nature. No one is going to work harder than the guy next to him with his feet up if they get paid the same regardless. It’s a race to the bottom, or even worse, if you look at history, it spawns dictatorships under which millions of people die in gulags, as much as your lot like to gloss over those inconvenient truths.’

Eva was infuriated to find herself growing tearful as she spoke, and Keith was clearly taken aback by her display of emotion.

‘I don’t want to argue with you, Eva. We simply disagree on this.’

‘Yeah, but it’s not just a disagreement about whether cats are better than dogs, is it? Underlying it is the fact that you’ve never approved of anything about the way I’ve lived my life. To most people I was a success, and I worked so hard. But you, you never once told me you were proud of me, do you know that? And now, when I could really do with some support, all I get is a bunch of Trotskyite self-righteousness. All you care about is your precious ideological purity. It’s more important to you than your own daughter.’ Even as she said the words she knew she wasn’t being entirely fair, but she was too upset to care.

‘I don’t have to always agree with your values to be proud of what you’ve achieved, Eva,’ he said slowly, reaching around for a type of language he was unaccustomed to using. ‘And I know your mother would have been too.’

But Eva wasn’t listening. She upended the cold remainder of her coffee into the sink and walked out of the door to head back to London.

*

Her flat was on the market but things weren’t looking good; the torrent of money that had been pouring into bricks and mortar during the early part of the decade had suddenly dried to a trickle, and words like asset bubble and negative equity were increasingly being bandied around. The estate agent had advised her to ‘price it realistically for a quick sale’, which apparently translated into an asking price that would mean taking a substantial loss on what she’d paid for it. Even so, there had only been a handful of viewings.

Every time she thought about what she was going to do next, she came up against the immovable wall of uncertainty. If the flat sold quickly and for a reasonable price, she could buy something smaller closer to Sylvie and Allegra and somehow start again. But if not. . well, it didn’t bear thinking about. She’d be stuck in this limbo or forced to absorb the sort of loss that would leave her if not completely destitute then jobless and without any of the financial security she’d thought she’d achieved in a decade of hard toil. Thinking about the future was like staring into a void: the job had consumed everything, all of the time and energy that other people had spent on husbands, children, hobbies, creative fulfilment. There had been no Plan B.