Stories of Capitalism Inside the Role of Financial Analysts by Stefan Leins

1

Meeting the Predictors

In spring 2010, it seemed as if the financial crisis had come to an end. 
Governments had bailed out many of the so-called systemically rele-

vant banks, and stock markets appeared to be slowly recovering. The 
tragic effects of the financial crisis were visible, however, in struggling 
industries and growing unemployment. Countries such as Greece and 
Spain reported youth unemployment rates of more than 50 percent, 
while at the same time governments lowered their spending to un-

precedented levels. Furthermore, as a direct consequence of housing 
market speculation, approximately 10 million homeowners had lost 
their homes in the United States alone. Most financial market par-

ticipants claimed, nevertheless, that the financial markets seemed to 
have overcome the crisis.
This optimistic view did not last long. On May 7, 2010, I was sup-

posed to meet with a member of the financial analysis department I 
was aiming to study. At 9:12 a.m., my cell phone rang: “I don’t know 
whether you’ve already seen it,” the caller said, “but the markets are 
going crazy. I’m afraid we have to cancel our meeting.”1 I had no idea 
what the person was referring to, and so I went online to find out. It 
turned out that, at 2:45 p.m. New York time on May 6, the Dow Jones 
Industrial Average Index, one of the most important stock market 
benchmark indices, lost 9 percent of its value within a few minutes. 
Although the exact reasons for the Flash Crash, as this incident came 
to be known, have been subject to discussion ever since, one thing 
became clear to me that day: however legitimate they might look, 
financial market forecasts can become useless very quickly. In fact, 
predicting market developments is—as some financial analysts them-

selves like to say—often simply “betting on the future.” The same in-

sight ultimately applied to the long-term development of the overall 
financial crisis after this particular moment in 2010. Instead of experi-

encing the aftermath of the crisis, I became witness to the “currency 
wars” (“Currency Wars,” 2010), an economy “on the edge” (“On the 
Edge,” 2011), and what was almost the end of the euro (“Is This Really 
the End?” 2011). In other words, I observed the sad continuation of 
the biggest financial crisis since the Great Depression.
I joined Swiss Bank (a pseudonym I use throughout this book) in 
September 2010 for a two-year fieldwork phase because I wanted to 
understand what happens inside one of today’s biggest black boxes: 
the banking world. I was born and raised in Zurich, the home of the 
two major Swiss banks, as well as dozens of small and medium-sized 
financial institutions. Even though Zurich is massively influenced 
by its financial sector, which contributes no less than 22 percent of 
the canton’s GDP (Kanton Zürich 2011, 7), the sector has remained 
opaque to many of the people of Zurich. This opacity results partly 
from the fact that its employees rarely discuss their work in public. 
Also, Swiss banks have done a good job of presenting the banking 
sector as a simple service industry, rather than as a field of powerful 
corporate actors who heavily influence their host cities and dominate 
much of the world’s economy.
The figures speak for themselves: In 2005, the total assets held in 
Swiss bank accounts were worth eight times Switzerland’s GDP (in 
the United States, the total assets held on domestic accounts were ap-

proximately equal to the US GDP). These assets predominantly come 
from abroad, which makes Switzerland the world’s largest offshore fi-

nancial center. Roughly speaking, Swiss bank accounts contain a third 
of the world’s financial wealth that is held abroad (Straumann 2006, 
139; Wetzel, Flück, and Hofstätter 2010, 352; Zucman 2016).
With the consent of Swiss Bank, I was taking part in the day-to-

day work life of the bank’s financial analysis department, a large divi-

sion of about 150 highly educated and well-paid employees. Finan-

cial analysts collect information and conduct analyses to understand 
current developments in financial markets. Then they valuate com-

panies, business sectors, countries, and geographical regions to iden-

tify opportunities for investment. In so doing, they become power-

ful market actors. Their valuations and investment advice generate, 

Stories of Capitalism Inside the Role of Financial Analysts by Stefan Leins