Hedge Fund Devils

Still from The Devils. (Amazon).

Arriving with very little fanfare on Amazon Prime, the Italian TV series “Devils” is easily the most penetrating narrative drama on “banksters” I have ever seen. Set mostly on the trading floor of New York London Investment Bank, an obvious fictional version of Goldman Sachs, it stars Alessandro Borghi as Massimo Ruggero, who manages the hedge fund group and is in line to become the next co-CEO. He is opposed by a rival for the position who views Massimo’s cutthroat tactics as inimical to British banking’s glorious past, when the bank supposedly served the average citizen rather than speculators only interested in making a fast buck. He is not shy about telling Massimo to his face that Italians don’t belong in leading positions in such an august institution like NYLIB.

This 10-part series is based on the novel “Diavoli” that was written by Guido Maria Brera, an Italian who worked for a number of years in the financial industry. His experience help gives the book a palpable reality of the sort that makes ex-attorney John Grisham novels about law firms so compelling. Saying that, it is necessary for those viewing “Devils” to be prepared for financial industry minutiae, especially selling short—Massimo’s specialty. Showing little concern for the consequences of its impact, he left behind ruin everywhere he decided to make profits off ordinary peoples’ losses.

To give you a head’s up on the financial terminology, selling short refers to an investor borrowing a stock, then selling the stock, and finally buying the stock back to return it to the lender. They are betting that the stock they sell will drop in price. If the stock does drop after selling, the short seller buys it back at a lower price. The difference between the sell price and the buy price is the profit. Hedge funds make this an important part of their strategy, especially like the one Massimo ran since it profited from the 2008 mortgage-backed securities collapse.

Although an Italian production, the characters all speak in English, including Alessandro Borghi, who is brilliant as Massimo Ruggero. Woody Guthrie once sang that “Some will rob you with a six-gun, and some with a fountain pen.” In his last stand-out performance, Borghi played Aureliano Adami, the Roman mafioso lead character in “Suburra: Blood on Rome” featured on Netflix. Adami was not above using his six-gun to kill an innocent person who was an inadvertent eye-witness to one of his hits on a rival gangster, but it was Massimo Ruggero’s fountain pen that destroyed the lives of thousands.

In episode 8, Massimo returns to the rustic fishing village on the coast of Amalfi to visit his father who is nearing death in the local hospital. The minute he steps foot in the village, he is warned by a local fisherman that he will kill him the next time he sees him. That local was someone ruined by Massimo’s short-selling of the debt owed by the village. Even if his own father, another fisherman, was brought down, it mattered little to a man who had made a pact with the Devil—financial chicanery.

While the mechanics of the securities industry portrayed in the series can often mystify the viewer, including a former employee of Salomon Brothers and Goldman Sachs like me, their rootedness in well-developed characters compensates more than adequately.

For example, Massimo became a star at NYLIB when he advised the CEO to dump all its mortgage-backed securities. He took this position not after reading the Wall Street Journal but from an encounter with a transexual female at a wild booze and drug-laced party celebrating his wife’s paintings being exhibited in a London gallery. In his early days with the firm, he was engaged with her bohemian ways, even to the point of wearing shoulder-length hair, tolerating her outspoken hatred for the financial industry, and her drug habits. Sitting around with her and her déclassé friends, the transexual female announced that she was about to buy a house. They looked askance at her wondering how someone who made a living as a prostitute could get a mortgage.

She replied that nobody at the bank seemed to care. It seems she was one of millions benefiting from a  collateralized debt obligation (CDO). At that point, Massimo picked himself up and found the nearest laptop at the debauched party. Spending an hour or so, he came to the conclusion that CDO’s were toxic and shared it with Dominic Morgan, the CEO who was even scuzzier than Massimo. When other senior officers in the meeting made the case that CDO’s were generating huge profits, Dominic decided to go with the junior officer’s advice that turned out to be correct.

If you’ve followed the mortgage-backed securities meltdown, you’ll know that Goldman Sachs profited in the same way. In 2009, the NY Times reported that Goldman “peddled these complex securities — known as synthetic collateralized debt obligations, or C.D.O.’s — and then made financial bets against them, called selling short in Wall Street parlance.” That’s exactly what NYILB did and what got Massimo promoted to trader and the short haircut that went with the promotion. That was not the only change. When he and his wife went to a gala afternoon banquet at some 4-star chateau, she overheard the snobbish wives of other officers putting her down as she was inside a bathroom stall. Drinking herself into a reckless rage, she busted into a discussion between Massimo and his cohorts and launched a profanity-laced denunciation of the banksters with blood on their hands. She was the next to go after the long hair.

Early on, we meet another victim of Massimo’s machinations, an investigative reporter named Sofia Flores working for Subterranea, a secretive Wikileaks type group that specializes in exposing financial industry crimes. Neither of them were aware of it at the time but her brother in Argentina blew his brains out in the lobby of a bank that had been ruined by Massimo. Only a child at the time, she later resolved to fight against banks like NYLIB to revenge her brother. Why then would she approach Massimo, who was a symbol of that devilish institution? The explanation: she had learned that he was infuriated over being passed over for the co-CEO spot and would be willing to retaliate. In exchange for her supplying some of the dirt that Subterranea could pass on, he’d exchange other dirt unknown to the group.

Suffice it to say that the two fall in love and united in the goal of exposing NYLIB criminality. Those expecting a pat conclusion in which Massimo changes from devil to angel will be disappointed. Unlike American films such as Frank Capra’s “It’s a Wonderful Life” or Oliver Stone’s “Wall Street”, good does not exactly triumph over evil. If there’s any moral in the conclusion of “Devils”, it is that money remains the root of all evil.

Highly recommended.

Louis Proyect blogged at https://louisproyect.wordpress.com and was the moderator of the Marxism mailing list. In his spare time, he reviewed films for CounterPunch.