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LONDON — Finance is such a picturesque business, but nobody seems to notice.
Once upon a time, for instance, all that you needed to start a bank was a bench. You put your bench up in a square in medieval Italy and sat down behind it to do business. The Italian for bench is banca, and hence our modern word bank.
Sometimes, of course, bankers would run out of money, and when they did — in an age before the invention of TARP, bailouts and Ben Bernanke — their bench would be ceremonially smashed in front of them. It was then a “broken bench†or “banca rotta†or “bankrupt.†Though trading terminals may be sturdy things, this is the sort of personalized and decisive action that I’m sure we all hope to see from Janet Yellen and her ax.
Money is filled with these strange images, if we only look for them.
My point here is the eternal poetic inventiveness of the financial mind. Popular opinion has it that bankers think of nothing but profit. But their brains are fixated on poetic invention. Money seems to be a side issue. And if modern poets had half the linguistic inventiveness of the modern banker, they would sell more books.
Or make more bucks. The only reason that anyone has ever made a buck, it seems, is that Native Americans had no interest in coins or checks, and preferred to be paid in buckskins.
The nest egg that we’re taught to store away? It is a perfectly real thing among chicken farmers, who insert a fake egg into a nest. The hen won’t leave until the egg hatches, and in the meantime she lays a bunch of real eggs of her own. Thus the nest egg is the capital, the real egg’s the interest.
A mortgage is a death wager. Even hedge funds derive, ultimately, from the sort of hedge you find at the end of your garden, the sort where wildflowers grow. The idea was that a small debt could be hedged in by a larger one, which was secured. Thence came the idea of hedging your bets by laying money on both results. And thence came our modern pooled investment vehicles. But the metaphor was first recorded in the works of the metaphysical poet John Donne.
A 1490 edition of Aesop’s Fables contains an extra story never seen before. It’s about two guys who make a deal to sell a bearskin to apes, before having actually obtained a bear. They reckon that bear hunting must be easy, but when it’s time to hunt they both flee in fear, one climbing a tree and the other playing dead.
The moral of the fable: Don’t sell the skin till you have caught the bear. Any financier, though, will recognize the principle of the naked short. This maxim was so well known in the 18th century that those who sold speculatively were known as bearskin jobbers, and then simply as bears. The word in that financial context is first recorded in 1719, and within five years the magic of finance had paired the bears with bulls, for no better reason, it appears, than that they were both beasts that began with a B.
From this small start, a zoo has been assembled. Financiers think in animals, their minds a grand menagerie. There are the dogs, or underperforming shares, which have tumbled and continued to tumble even after the dead cat bounce. There are the porcupine provisions that should protect your company from a hostile takeover, like a porcupine’s quills, and which are sometimes referred to as shark repellent.
Meanwhile, stags buy new issues in the hope of a quick return. Black swans swim in unexpectedly, as dishonest brokers perform goose jobs (promoting a stock to increase demand so that they can unload their inventory). And when all such people have been fired, the remaining dealers, left huddled together for warmth, are called penguins. The dogs of the Dow bark, but the caravan moves on. Bulls make money. Bears make money. And PIGS get slaughtered.
Those PIGS are an acronym for a pen of financially unfortunate countries: Portugal, Ireland, Greece and Spain. They could have been called I.G.S.P. or G.S.I.P., but the analyst must find poetry even in his alphabet soup. Consider the brilliant intricacy of the B.L.T., or bonus-led trade: one whose profit must be immediate, and will probably have the shelf-life of a bacon, lettuce and tomato sandwich. Somebody spent a lot of time thinking about that, when they should have been doing their job. How much effort, how many failed attempts were there, before somebody worked out FILTH — Failed in London, Try Hong Kong?
Even rhyme, lost to contemporary poetry, thrives on the trading floors of London and New York. Pump and dump. Rank and yank. Short and distort. Trash and cash. Money managers seem unwilling to do anything that doesn’t have a harmony of sounds. Their maxims have the ancient folksy quality of rustic truths.
Consider the following pieces of wisdom: “Ne’er cast a clout till May be out.†“Marry in May and rue for aye.†“Sell in May and go away.†The first two are medieval, the last was first recorded in 1979 and refers to the ursine nature of the financial summer.
And the poetry can be so vivid. Consider “They’re crying; I’m buying,†which presents the image of a keen purchaser elbowing his way through a wailing funeral cortege, cash in his eager hand. Baudelaire would have killed for an image so shocking and so surreal.
But financial argot can spin such tapestries by the yard. Imagine a fallen angel wearing white shoes and opening her kimono, as she descends on her tin parachute to give a cuff quote to a white knight.
So many industries are filled with meaningless, lifeless jargon. Not finance, either on Wall Street or in the City of London. For the trading floor is the last true home of the last true poets, huddled together — like penguins.
Finance, by the way, derives from the Latin for finish, or final. So let’s leave it at that.
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