The jargon bandied about by pinstriped City professionals can be so impenetrable that it sounds like a foreign language spoken only by rich young men. Thankfully, veteran US financial commentator Jason Zweig has compiled a lexicon to assist the lowly layman in understanding those who have been described as “masters of the universe”.
But the Wall Street Journal columnist’s book, The Devil’s Financial Dictionary, is less of a guide for dummies than a wryly satirical critique of finance culture. “Rumour” is defined as “the Wall Street equivalent of a fact”, while “irrational” is “a word you use to describe any investor other than yourself”.
“Certainty,” says Zweig, “is a state of clarity and predictability in economic and geopolitical affairs that all investors say is indispensable – even though it doesn’t exist, never has, and never will.”
The entries also display a healthy dose of scepticism about the role of some of the financial world’s key players. Regulators, such as the UK’s Financial Conduct Authority, or energy watchdog Ofgem, are bureaucrats who “attempt to stop rampaging elephants by brandishing feather-dusters at them”. Another way to describe them, he writes, is as “a future employee of a bank, hedge fund, brokerage, investment-management firm, or financial lobbying organisation”.
An economist is someone who “applies mathematical tools that are the equivalent of using a ruler and a stopwatch to measure the movement of matter in a particle accelerator, where the velocity of subatomic particles can approach the speed of light”. Auditors are deemed to be accountants who “all too often may approve a company’s financial statements exactly as the company’s management wishes them to be presented”. The word means “one who hears” in Latin, the author explains, although in English it means “one who also obeys”.
While the book lampoons the idiosyncratic nature of Wall Street, it also contains some fascinating insights and hypotheses about history. Zweig suggests, for instance, that a line from Shakespeare’s Macbeth might have been aimed at merchants in the audience who had recently experienced an early example of a stock market bubble.
Banquo cries: “The earth hath bubbles, as the water has, and these are of them. Whither are they vanish’d?” Macbeth replies: “Into the air, and what seem’d corporal melted as breath into the wind. Would that they had stay’d!” Macbeth’s lament will be familiar to anyone who invested in property before 2007 or commodities before 2014.
Other definitions are imbued with a grim irony that will be familiar to anyone who has worked in the harsh environment of the City. “Fee” is explained thus: “A tiny word with a teeny sound, which nevertheless is the single biggest determinant of success or failure for most investors.” And “outlook”, a word found in almost every set of financial results, is defined simply as “a guess”.
Zweig points to the fact that a survey of market strategists in December 2006 felt that the economic outlook was rosy.
•The Devil’s Financial Dictionary, £12.99 hardcover (£8.54 Kindle) from Amazon. Published: PublicAffairs (US)
