Michael Lewis, “The Wolf Hunters of Wall Street” (NYT Magazine, April 6, 2014)
I hadn’t really planned on spending any more time on Brad Katsuyama, but then the NYT Magazine landed on my doorstep on Sunday morning. The copy under the “Meet Brad” headline reads:
He’s a humble Canadian trader who happened to figure out exactly how the stock market was rigged. Now Wall Street may never be the same.
We learned from 60 Minutes that Katsuyama was a conformist even by Canada’s rigorous standards for conformity; now we discover that he’s also “humble.” I understand that Michael Lewis probably didn’t write the copy on the cover of the magazine; I also understand that it’s trying to set up a “David and Goliath” type narrative that is intriguing enough to make you open the magazine and read the article; but “humble”? Really? This is the man who may revolutionize Wall Street, and the best adjective they can apply to him is “humble”? Not “clever”? Not “brilliant”? Not “bold”? Not “crusading” – I like crusading. The Crusading Canadian – it even alliterates. But no – he’s a Canadian being featured in an American publication, and so he must conform to the pre-existing American stereotypes about Canadians: he must be polite, he must be quiet, he must be conformist, he must be humble.
And then there’s that phrase, “happened to figure out.” My recollection from watching the 60 Minutes report was that Katsuyama and his team actually put a significant amount of time and effort into figuring out how other people were managing to front run their trades. It required doggedness, ingenuity, creative thinking, a refusal to give up or to accept being told that was just how the system worked – in short, it took the opposite of humility and conformity. But here, on the cover of The New York Times Magazine, all that effort is elided, and we’re told Katsuyama “happened to figure it out,” as if by some happy accident.
Now that I’ve finished complaining about the cover, the article itself is actually quite fascinating. It goes over some of the same ground as the 60 Minutes report, and also reveals some new aspects of the story. Most of all, Lewis paints a very compelling picture of Brad Katsuyama as a person who felt forced by circumstance to take action for something that, for lack of a better word, could be called “principle”.
It’s important to point out that Katsuyama lives and works in the United States, and that the story is very much about the American financial system – there’s really not a whole lot about Canada in most of the article. In the introductory paragraphs, however, we are treated to some key ideas about our humble little nation to the north:
Before the collapse of the U.S. financial system in 2008, Brad Katsuyama could tell himself that he bore no responsibility for that system. He worked for the Royal Bank of Canada, for a start. RBC might have been the fifth-biggest bank in North America, by some measures, but it was on nobody’s mental map of Wall Street. It was stable and relatively virtuous and soon to be known for having resisted the temptation to make bad sub-prime loans to Americans or to peddle them to ignorant investors. But its management didn’t understand just what an afterthought it was – on the rare occasions American financiers thought about it at all. (28)
Stability, (relative) virtue, resistance to temptation – these are classic merits that Americans associate with dull, conservative old Canada. And I love that phrase, “by some measures,” as if to say RBC likes to call itself the fifth-largest bank, but no one really believes it. The Canadian financial system is being firmly put in its place here. When Katsuyama arrives in New York, Lewis makes him sound rather naive:
It was his first immersive course in the American way of life, and he was instantly struck by how different it was from the Canadian version. “Everything was to excess,” he says. “I met more offensive people in a year than I had in my entire life. People lived beyond their means, and the way they did it was by going into debt. Debt was a foreign concept in Canada. Debt was evil.” (28)
Canadians sound rather schoolmarmish here, horrified by loud voices and the very concept of borrowing money. But this passage is also funny for the way, in describing a stereotypical Canadian who’s shocked at the freewheeling American way of life, it smuggles in Canadian stereotypes about Americans – that they’re all loud, brash, offensive, and racking up an insane amount of debt to make sure their lifestyle keeps up with their incessant bragging. Canadians, and Canadian banks, need to be insulated from such offensive behaviour:
The RBC trading floor had a no-jerk rule … If someone came in the door looking for a job and sounding like a typical Wall Street jerk, he wouldn’t be hired, no matter how much money he said he could make the firm. There was even an expression used to describe the culture: “RBC nice.” Although Katsuyama found the expression embarrassingly Canadian, he, too, was RBC nice. (28)
These opening few paragraphs are like a high-speed tour through American ideas of what it means to be Canadian, all building towards this final, central concept of how nice (close cousin to polite) we are. In this telling, even Canada’s largest bank doesn’t care how much money it makes; all it cares about is making sure everyone is nice. Niceness is the archetypal Canadian virtue, the quality from which all our other characteristics spring; everything begins with everyone being nice. We didn’t make bad sub-prime loans – that wouldn’t be nice. We don’t act offensively – it’s not nice. We don’t go into debt – debt’s not nice. And we certainly don’t give jobs to jerks – jerks, after all, aren’t nice.
The table of contents page of the magazine has a photo of Katsuyama and his wife at home playing with their kids; the signs on the wall in the background seem to fit so perfectly with the image of Katsuyama in the story that it’s hard not to wonder whether the photographer hung them there before taking the picture:
The idea of Canadian virtue that the article trades in is summed up in those five words: “Play Nice.” “Share Your Toys.” Clearly, RBC’s “no-jerk” policy extends all the way to the Katsuyama playroom.