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Barometer of Fear featured in the Times

on Tue, 05/09/2017 - 11:50

Alexis Stenfors talks like an addict. He talks about trading with the gentle fragility of those in recovery: so wary of the thing that made him feel alive, so nostalgic for what was killing him.

Our conversation spans his spectacular rise and fall on the global financial scene. First, his ascent to being one of the most prized and feared traders in London, nicknamed “Stealth” for the boggling sums he was relied upon to make for Merrill Lynch. Then we brood more deeply on the physical and mental burnout that led to his covering up the first huge losses of his career. He was branded a “rogue trader” and exiled from the market; his wife and two young daughters were pariahs in the playground. Banking broke him.

Now that his ban on trading has been lifted, does he ever feel tempted to go back to all that? “Yes. A lot.” Really? I am taken aback. To read his book, Barometer of Fear, is to read of a man suffering an intellectual, spiritual and moral crisis about what the markets in the early part of the 21st century did to the world, did to himself.

“I check the markets all the time, still,” he says. He resists even a flutter on personal trading because “I realised I de-prioritise everything else”.

Does that mean it dehumanises you? “Yes. It does. But I can’t honestly say I would never go back again because . . . I really, really loved it.”

I meet Stenfors on his old patch, a café in the heart of the City, and I ask if he wants a coffee. “No thank you,” he murmurs in his Scandinavian lilt; today he has already had way too much. Then the waiter arrives. “Double espresso,” he says.

I thought I knew who Stenfors would be: a City jock high on his own testosterone and ego. His reputation was for thrilling — or dangerous — levels of risk. Putting him on the Merrill Lynch trading floor, he writes in the book, was like “giving Viagra to a sex addict”. However, he is a slight, softly spoken figure who has written a beautifully literate, Jonathan Swift-referencing book about the dark side of the City and in particular Libor, the London interbank offered rate — the interest rate banks charge each other for short-term loans — that was once dubbed the “barometer of fear”.

Shortly after Stenfors’s scandal forced him out of the City, Libor — linked to $350 trillion of loans and securities — was exposed as a rotten mess. Traders were jailed for rate rigging and accusations of corruption at the highest level continue. Now at 47 Stenfors understands Libor more than almost anyone: after 15 years of trading to its beat, he has a PhD and academic post in it. City traders regularly meet him confidentially and express their fears of their downfall due to Libor. He has become a sinner turned priest. He also is a Finn, with that native tendency for self-torture. How can this same person be Stealth?

“I try to explain in the book: it’s almost like a battle between two big traders, like arm-wrestling between two men, normally they are men . . . It can become very, very personal. Even in huge financial markets there can be these personal battles . . . People in the City, when they met me in person said, like you do now, ‘Oh, you’re not as big as I . . .’ They expected me to be physically larger because that was how I talked, or traded. I’ve spoken to some ex-traders that . . . told me how incredibly scared they were of me. I never saw myself that way. But in the financial market I had a lot of power.”

That was the public side of Stenfors. In private he was scared for himself. When in 2009 news broke of his $100 million cover-up at Merrill Lynch — which led to a loss of $456 million for the bank — the media pursued him hard. Yet the only photo they had was one lifted from his wife’s Facebook page. It was a bit weird: he looks sad and wears a fluffy bathrobe. Nobody paused to wonder what that was about. London was reeling. Already the world was in financial crisis and here was another symbol of banks greedily staking the public’s money on unsustainable bets. Paparazzi surrounded his home, his wife and children were exiled in their north London neighbourhood and he even received death threats.

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Barometer of Fear
Alexis Stenfors
ISBN 9781783609284
Paperback, £9.99

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