(11 am. – promoted by ek hornbeck)
This past April, newspapers were a twitter with the discovery made by two Cambridge University researchers: John Coates, a former trading floor manager on Wall Street, and Joe Herbert, a neuroscientist. In their abstract, they wrote:
We found that a trader’s morning testosterone level predicts his day’s profitability. We also found that a trader’s cortisol rises with both the variance of his trading results and the volatility of the market. Our results suggest that higher testosterone may contribute to economic return, whereas cortisol is increased by risk.
Their research findings were published in the Proceedings of the National Academy of Sciences, Endogenous steroids and financial risk taking on a London trading floor.
So, as The Guardian observed Testosterone is the secret ingredient for making (and losing) lots of money. “Money doesn’t make the world go round: it’s testosterone. The more that traders have, the richer they’ll become – up to a point.”
Coates explained further what their research found.
“You can get this positive feedback loop between winning, testosterone, greater confidence and risk taking,” Coates said.
He believes his work taps into the “winner effect” that scientists have found in numerous competitive situations, from fighting male animals to human athletes. In one-on-one competitions, men gain a testosterone boost when they win. This gives them an advantage in the next bout and if they win that they get a further advantage. And so on. Coates’ study suggests that this is happening even in the world of financial derivatives trading.
But he admitted it is not that simple. “My great fear is that … people will walk away with the idea that if you want to make money in the markets you had better have a lot of testosterone,” he said.
He thinks there comes a point when traders have too much testosterone and so start to take irrational risks. That is when the bubble bursts and the market crashes.
Last month, Evolution and Human Behavior published a study of association that seems to corroborate the Cambridge Universtiy researchers’ findings. In the abstract of Testosterone and financial risk preferences, the researchers wrote: “Using a sample of 98 men, we find that risk-taking in an investment game with potential for real monetary payoffs correlates positively with salivary testosterone levels”.
Anna Dreber, a co-author of the study, explained in Is testosterone to blame for the financial crisis? in Scientific American that the male steroid hormone may have had a role, but it “is not that obvious”. “Long-term, above-average testosterone levels may perhaps eventually lead to irrational risk-taking, and thus lower profits,” Dreber said. When testosterone levels decline, traders become more risk adverse.
“Women tend to be more risk averse when it comes to financial gambles,” Dreber notes. “They tend to trade less and that tends to be a better strategy. With more ‘average women’ trading, maybe the stock market would look different.”
A combination of ungodly amounts of money and testosterone makes the cities that are home to the world’s financial markets a profitable place for the sex industry. If you are at home and wondering why your male partner isn’t ‘feeling it’ you may want to check out the VigRX Plus price here which should solve the issue and get things going.
In March, a month before the Cambridge Universtiy researchers’ paper was published, on the other side of the Atlantic, Americans watched the epic downfall of Eliot Spitzer. When, as the NY Times reported, Spitzer was linked to prostitution ring, the political career of the New York attorney general turned governor was over. “Though his signature issue was pursuing Wall Street misdeeds, as attorney general Mr. Spitzer also had prosecuted at least two prostitution rings as head of the state’s organized crime task force.”
The Deal Book blog at the NY Times reported on the reaction of Wall Street on Spitzer: ‘There Is a God’. What Wall Street traders experienced wasn’t just schadenfreude, but unbridled glee at the downfall of their nemisis. Not simply because Spitzer, a prosecutor against shady dealings on Wall Street, had been brought down, but how Spitzer, a crusader against prostition ? one of Wall Street’s hobbies, was toppled. Who knows, but the delight in Spitzer’s downfall may have helped the markets go up through mid-May?
Now the bubble has burst and panic on Wall Street has set in. Back in the days of 10,000+ Dow, just last month, Slate asked of the financial crisis, But What Does It Mean for the Prostitutes?
There are some people who might just benefit from the current turmoil in the financial markets. One probably won’t surprise: lawyers. The other might: sex workers.
We can already see how lawyers are going to be kept busy, as spurned Wachovia suitor, Citigroup, is planning on suing Wells Fargo for $60 billion in legal damages. The NY Times reported yesterday that Regulators approved the Wells Fargo takeover. The merits of the case are debatable, so “in other words, there is plenty to keep a horde of lawyers busy for years.”
The sex workers Slate interviewed said that during downturns in the economy created an uptick in business for them.
Their clients were coming to them for a mix of escape and encouragement. As Jean, a New Yorker and a 35-year-old former paralegal turned “corporate escort” (her description) told me, “I had about two dozen men who started doubling their visits with me. They couldn’t face their wives, who were bitching about the fact they lost income. Men want to be men. All I did was make them feel like they could go back out there with their head up.”
With male Wall Street traders down on their luck, their testosterone levels may need a little pick-me-up. So, “today’s high-end sex workers see themselves as therapists, part of a vast metropolitan wellness industry that includes private chefs and yoga teachers. Many have regular clients who visit them several times per month, paying them not only for sex but also for comfort and affirmation.”
The secret to earning a living during lean economic times as a sex worker is money is diversification.
Caroline learned quickly that she had to diversify in order to survive these cycles. Now, she never has more than half of her clients in one economic sector. “I always have lawyers, very dependable. And I never have too many stock brokers. They’re a real pain in the ass. I’ve never heard anyone whine more than them.” But Caroline may be an exception. Most high-end workers find their clients via word of mouth. They can easily become lodged in one sector, rising or falling with the economic tide…
It is quite common for sex workers at the high end to take men “on credit,” giving them freebies for a few months or longer until they can get back on their feet. Equally common is the willingness to reduce rates…
The trick to surviving lean times, says Caroline, is to be patient and do everything it takes to keep your clients. “They are going to come back. I mean, c’mon, it’s Wall Street! These guys are never out of the game for that long. That’s what’s so great about what I do. If you can keep your cool, it’s pretty rare that you lose money. Just make sure you keep the man happy.”
The strategies Caroline uses to stay working may also make better investment strategies. Perhaps it would be better to put her in charge of billion dollar investments than her clients?
Back in London, tucked away in the Comment & Analysis section of the Financial Times website is a column about The City crisis and the sex industry. “Could the oldest profession collapse in the wake of market meltdown?”
A few anecdotal stories from people connected to Britain’s sex trade were relayed. One story was from Bob who is designing websites for male escorts “between jobs in financial services”. According to him, any downturn in the sex economy will take some time before it happens.
“Regulars – and most people who use escorts like these hamburg escorts become repeat customers – are more likely to buy discount bacon at a supermarket rather than cut back on their use of prostitutes in the current climate,” he said. But, “once the recession starts to be felt by people beyond the City then it is bound to hurt the sex trade”.
And, so far business in The City has been steady according to Chris Student, a representative of the International Union of Sex Workers. “While some turn to God in times of crisis, others might turn to sex and the strapless strapon toys that come with this type of experience,” he said. With that being said, long-term prospects are unknown.
Hard times may be upon us.
Cross-posted at the European Tribune.