What Book to Read?

The amazing thing to me is that this book was written in 2002. I hadn’t heard of the concept of moral hazard until the Global Financial Crisis of 2008, but had I read this book before that time, I would have been much better prepared to understand what was happening in 2008, and to grasp the implications of propping up dodgy financial institutions deemed too big to fail. It is almost as if Jennings predicted what actually happened. ‘It’s a time bomb’, as one character notes.

Kate Jennings is an Australian author who lived for many years in New York. This novel is heavily autobiographical; it is based on her time there working for the communications unit of a Wall Street merchant bank in order to make enough money to care for her husband who is suffering from Alzheimer’s. The actions of Cath, the protagonist in the story, are not those of Kate Jennings, but her experience informs nearly every page. ‘How would you have me write about it? Bloody awful, all of it.’

Cath gets the job through a friend, and is plunged into a world of derivatives, junk bonds, quants, hedge funds and risk management – or rather the lack of it. And then there are the bankers themselves, with their talk of liquidity, transparency, being pro-active, adding value and incentivizing. Unlike Cath, they have supreme confidence in the efficacy of the market. ’Markets overshoot. They correct’, one tells her, ‘[a]ccompanied by one of his keep-to-what-you-know, don’t-bother-your little-head smiles’.  And why worry, as they are supremely confident that any losses will be covered by other banks.  This is a text book definition of ‘moral hazard’.

But Cath faces other moral hazards. As the disease takes hold, she has to make a series of agonising decisions about how best to care for her much loved husband, Bailey. The facts may not be true, says Jennings, but ‘the emotions are’.

I really like the way Jennings writes. ‘I’d rather eat garden worms than be earnest or serious’, she says. This, mixed with her mocking attitude to the toxic corporate culture she works in, produces some gems. ‘Trickle-down gossip was much more efficient than trickle-down economics.’ Or ‘Leverage: perfumed word for “debt”.’ Observing a banker on his speaker phone, she sees him ‘whip out his comb and pull it through his hair, poke around in his ear with a pen, hitch up his pants, and then repeat the exercise, all the while laughing, doodling, gnawing on candy, consulting his computer. A marvel of multitasking.’ Or, more sombrely, ‘if I had one word to describe corporate life, it would be ‘craven’. Unhappy word.’ And finally, ‘the real nature of global financial markets: perilous, jerry-built, mortared with spit and cupidity, a coat of self-serving verbiage slapped on to tart up the surface and hide the cracks’.

This is a short book, and in a sense, not much happens. As I have noted in others posts, I like a good plot. But I don’t miss action here. This is partly because I enjoy the writing so much, but it is also because of the creative tension between the two aspects of the story. ‘I simply wanted to get across the idea of a person navigating her personal life and her professional life, going backwards and forwards’, says Jennings. Cath finds both sides of her life ‘equally demented, equally surreal’. But what choices does she have? Ultimately Jennings leaves the reader to make the moral judgements. It is a very sad story, but one not without hope.

Moral Hazard won the 2003 Christina Stead Prize for Fiction and was short-listed for the Miles Franklin Award. It was also short-listed for the Los Angeles Times Fiction Prize and was a New York Times Notable Book of the Year, suggesting it was also appreciated in America.

Jennings doesn’t seem to have a home page, but you can read a conversation with her about the book here.