Editors note: We sent John LeFevre, aka @GSElevator, a list of questions about his new book Straight To Hell: True Tales of Deviance, Debauchery, And Billion-Dollar Deals. Here are his answers.
Some critics of your book, which is now a New York Times bestseller, have said that it’s just a bunch of Wall Street clichés. What is your response?
Stories of bankers behaving badly are certainly nothing new. But I am capturing an entire culture of pervasive deviance and corruption from a vantage point that has never been revealed – the bond syndicate desk. Michael Lewis described syndicate managers as the “omniscient, omnipotent, omnivorous presence” on every trading floor.
It’s like being the catcher in a baseball game – in on every play and the only player who can see the entire field. I worked with M&A bankers and traders, buy side and sell side clients, and led deals all over the world with every bank on Wall Street.
More important, it’s not just about deviance, excess, and bankers behaving badly. I’m highlighting some substantive issues and questionable practices at all the big banks. Wall Street apologists can attempt to frame the conversation around lazy stereotypes or a few rotten apples. But that’s simply not the case.
So does this book glamorize Wall Street?
To me, the cliché would be to write about redemption and epiphany. So I chose to be unapologetic and let readers draw their own conclusions. I can’t help it if some people aren’t smart enough to get it.
Even Bloomberg’s mostly great Matt Levine accuses me of bragging and glamorizing degeneracy, when in fact my intention is the complete opposite. Forget that I’m highlighting a culture of pervasive deviance with outrageous and often illegal exploits, the entire premise of the Twitter account started as a way to criticize and satirize banking culture.
In the book, once you get beyond the deviance and debauchery, you make some pretty serious accusations?
As per my last answer, we did some crazy things. We regularly colluded on fees, and in particular, what we charged sovereign borrowers like Korea, Indonesia, and the Philippines. We often laughed at the misfortune of some of our clients.
I once punished a spivvy hedge fund manager for inflating his order on an illiquid deal by giving him a full allocation and then refusing to buy the bonds back when the market softened. He got fired two weeks later, and other bankers thanked me for getting rid of “that pain in the a–.”
We frequently put our own interests ahead of our clients. One of my coverage bankers begged me to tell his client to delay a bond deal – forgoing favorable market conditions and taking on months of headline and market risk – so that we could count the revenue toward next year’s bonus.
We traded allocations on hot deals for steak dinners, non-public information, and all kinds of favors from hedge funds. And if we didn’t participate in these antics, we’d lose our edge. If I didn’t give a big client a heads up on deal, we’d lose business to the bank that did.
If I didn’t let my own trading desk know that we were announcing a deal that would move markets, God help me if they got picked off by a customer who got that information from another bank working on the same deal.
That’s the culture.
Describe the average Wall Street banker.
Well-educated, bright, ambitious, respected in society… until you get them on an Asia roadshow. Then all bets are off.
Do you think you were an average Wall Street banker?
In the book, I try to be thoughtful (with my boarding school recollections) and consider if I always had a bit of a felonious mentality or if banking turned me that way.
My conclusion is that Wall Street attracts a certain mentality, and then builds them into a person with a set of values that deviates significantly from societal norms and quite often, basic human decency.
My first boss referred to the hiring of women as the “Office Beautification Project.” My first mentor bullied me into spending my entire first year bonus in five days in Saint Tropez. My second boss introduced me to FBTs (fake business trips), which facilitated him cheating on his wife. After that, I noticed a correlation between my performance reviews and my ability to binge drink, play golf, and keep secrets.
There are exceptions obviously, and the M&A culture is very different to the trading floor, but I found most of the people to be similarly-minded, where we all embraced the culture that had been passed down to us.
A few people still seem to be upset that @GSElevator was not actually a Goldman Sachs insider?
The Twitter account was a joke. Quite clearly, it’s always been about satirizing banking culture. If any person sincerely thought these tweets were literally about conversations overheard in the elevators of Goldman Sachs, they’re an idiot.
Vimeo/ Downtown Alliance
Matt Levine attempted to hit at my credibility by saying he “never heard things like this in an elevator” because “an elevator is a dumb place to say vile things.” Dear God, I wonder how someone so smart can say something so stupid.
And for the record, despite the fact that I was hired by Goldman Sachs, when it comes to fixed income, Salomon is far more prestigious than Goldman.
[Editors note: Matt Levine said “Cool, cool” when asked to respond to Lefevre’s description of him. Lefevre asserts that he was offered a job at Goldman Sachs, but later had the offer revoked due to a legal issue with a former employer.]
So why was it @GSElevator and not @CitiElevator?
The purpose of the account was always to illuminate an amplified reflection of the banker/frat/bro/douche mentality. And in my experience, having done countless deals with Goldman Sachs, I found their culture to be an amplified version of broader Wall Street culture.
Also, it was more interesting to appeal to Main Street’s fascination with the great “vampire squid.”
[Editors note: a Goldman Sachs spokesman said of Lefevre’s description: “Mr. Lefevre’s lack of knowledge of the real culture @GoldmanSachs could fill a book.”]
Is banking boring?
It’s definitely changed a great deal. As compensation structures, balance sheets, and risk appetite have evolved post-crisis, so has the culture.
Many of the more colorful characters of the trading floor have left for the buy side or the beach. But many of the antics I describe still go on today; people are just a bit more low-key about it. And most of the characters in the book are still in senior positions at big banks.
Certainly, the systemic conflicts of interest and the quid pro quo nature by which banks allocate deals remains the same – totally corrupt.
Do bankers in Asia behave worse than bankers in the US?
Banking in the US is far more commoditized than it is in Asia, so our attitudes and behaviors reflect the way business gets done in the emerging markets. Often times, it was our clients who would dictate the pace. I’ve seen a Chinese CEO threaten a senior banker with the loss of future business unless he joined us for after-hours karaoke.
But, these stories are more about banking culture than they are a reflection of Asia. The craziest nights I’ve ever had were always with the bankers visiting from New York and London. The walking Ralph Lauren catalogues were the most deviant.
What is it about Wall Street that brings out the Gordon Gekko party animal in people?
I don’t think of Gordon Gekko as a party animal; he was trading deutschmarks before the sun came up, right?
But generally, it’s well known that bankers often embrace the tired “work hard, play hard” cliché. I think it’s a function of getting sucked into a fast-paced world where you make a lot of money and the deals you work on end up in The Wall Street Journal.
This can give people a distorted sense of reality, and self. That’s part of it, and so is the stress. Going out and having fun can be a good release. And in my experience, it was also a great way to bond with colleagues and clients.
Are there different kinds of bankers? If so, what’s the best kind of banker and what’s the worst?
The worst kind of banker is the guy who takes himself too seriously and defines himself as a person by the fact that he works on Wall Street. The best kind of bankers are the same as the best kind of people – the ones who don’t take themselves too seriously, like to laugh and have fun, and have interests outside of their professional lives.
Most of your book is pretty negative about Wall Street, aside from the salary of course. Is there anything positive about the industry?
Someone once argued that Michael Milken has done more for humanity than Mother Teresa. And I think there’s some truth to that. We helped companies raise billions of dollars, albeit with a few causalities along the way.
The problem comes when bankers interpret those accomplishments to mean that the world owes them something, in addition to a seven-figure bonus.
Share a short story that didn’t make it into the book.
There are too many to count. I have a collection of stories about hosting big US financial institutions and GSEs (government sponsored enterprises) on Asian roadshows. They were insistent on coming out to Asia every year, and investors really had no interest in meeting them. So quite frequently, I’d have to set up fake meetings where some of our junior salespeople would pose as investors. These guys didn’t even really care; the after-hours itinerary was far more important.
We also had a Group Treasurer of a large GSE get so drunk that he missed his keynote speech at our Tokyo investors’ conference.
What do you miss about banking?
Having a Bloomberg terminal and infinite resources at my fingertips. It was also great being surrounded by smart, capable, and ambitious people. One lap around Walmart is an easy reminder that the real world operates at a much slower pace and level of efficiency.
What do you miss about living in Hong Kong?
Every night is Friday night and every weekend is a vacation.
Although now that I have kids, I look back on it as a bit of a soulless existence. So I would have to say I miss my once-a-day foot massage addiction, and the fact that a live-in maid only costs $ 600 a month.
What do you consider your best tweet of all time?
They’re all good, but a couple of my favorites would be: “Every time my wife gives me a BJ, I know it’s time to check my American Express statement.”
Or maybe: “The fact that most people are too stupid to know how dumb they really are is the fabric holding our society together.”
Daniel Goodman / Business Insider
What are the one or two luxuries you became accustomed to as a banker that you can’t live without?
Daniel Goodman / Business Insider
Custom suits and shirts, even though I don’t wear them very often anymore. The air miles were also nice, but I don’t travel much now with two young kids. So I guess the lesson is there aren’t really any material things that I can’t live without.
What are you going to tell your kids about being a banker?
Life is short, probably too short to spend twelve hours a day looking at a Bloomberg screen, emailing your way through dinner, or listening in on pedantic conference calls, mostly on mute.
What are you going to tell them after they read your book?
My kids are both under the age of two, so I’ve got plenty of time to think about it. But my wife enjoyed the book. I think she sees the antics more as a reflection of a culture and an industry than of me as a person. But that’s not my way trying to deflect accountability for all of the things I’ve done. I really don’t care.
John LeFevre is the creator of @GSElevator on Twitter, and the author of a new book and New York Times Bestseller, Straight To Hell: True Tales of Deviance, Debauchery, And Billion-Dollar Deals
NOW WATCH: 6 word puzzles that only finance geeks will understand