Comment: Why oddball bankers suffer from 'Agassi syndrome'
What do ex-tennis player Andre Agassi and investment bankers have in common? The answer, in each case, is what people call "moments of madness": extreme behaviour brought on by the stresses of a high-profile job.
Agassi's moment of madness involved his decision to snort designer drug crystal meth, a stimulant, and lie about it to regulators, thus flouting every rule in the tennis book.
For their part, as if we don't already know, investment bankers injected dodgy sub-par mortgage securities into collateralised debt obligations during the credit boom and mercilessly served them up to investors. And no doubt quite a few used some crystal meth as well.
Insight into why each of them acted as they did has been provided by Piers Morgan, former editor of the Daily Mirror. Writing in his capacity as a C-list celebrity in the Mail on Sunday, he points out people don't always realise the pressure of a high-octane environment.
He said: "It gets to you. If a session goes well, I come off stage buzzing and bursting with self confidence. I want to drink like Oliver Reed, dance like Travolta on speed and generally do anything to prolong the ecstatic emotions flooding through my carcass as long as possible.
"If things have gone badly, I slump back to my hotel room alone, drink too much Jack Daniel's way too fast and sit watching dreadful late-night TV in whatever rough old town my particular circus has washed me up in. And I'd happily do anything that makes the pain and misery of my public failure go away.
"Every move you make, every comment you say, gets analysed, dissected and cricticised. Nothing seems normal or real any more. Your life becomes a weird, cossetted, lonely bubble...."
Agassi took crystal meth during difficulties in a relationship and a poor run of tennis form. During the credit boom, investment bankers were in thrall to the market rather than the general public, but the impact on their emotions was the same. They initially got their kicks, and their bonuses, from innovation, which led to successful sales. Over time, desperate to keep up with their peers, they took more and more risks.
No one is immune to moments of madness during periods of hubris and nemesis, as the remarkable rise and fall of former New York State Governor Eliot Spitzer bears witness. Agassi has gone so far as to confess his faults in a book, which amounts to a highly remunerative attempt at coming up with a 'mea culpa'. The majority of bankers are also wondering why they could have been so stupid, although few of them have openly confessed to feeling shame.
Sadly, there is only one way to keep over-reaction under control during periods of excess. It takes the form of tougher regulation, which creates the fear of being found out within even the most hardered adrenalin junkie. Neither the rules, nor the regulation, were tough enough to keep Agassi and investment bankers under control when they were doing their worst.
The use of wire-tapping to uncover alleged market abuse by US hedge fund Galleon is one illustration of the way the regulatory trend is set to develop in the months ahead, as loose money strategies by governments succeed in reflating the asset price bubble and feelings of exuberance.
- write to mfoster@efinancialnews.com
del.icio.us
Digg
Newsvine
reddit
StumbleUpon