Our financial sector is primarily a male bastion. When I started working on this book, no more than 5 percent of the people taking risks in our financial markets were women. In 2018 Reuters reports that women account for 12 to 15 percent of trading roles.104 That’s good news, but a long way to go to achieve balance. This imbalance has an impact on the characteristics of our marketplace and our culture; it amplifies the boom-bust cycle and its outcomes.

Stories told by insiders about the booms and meltdowns over the past 100 years have a recurring theme: many trading halls echo a frat house – drinking, drugs, ostentatious spending on glitz and women, high levels of self-aggrandizing, and risk, enormous egos vying to be the biggest and baddest. Investment houses routinely seek out immature young men to run their trading desks. Leaders who burst into angry tirades are admired. Cautionary voices are dismissed.105 This culture is prevalent in the halls of finance and has an impact on our economy. As the failures of either Lehman Brothers or Bear Stearns & Co. in 2008 demonstrate, even smaller players can take the whole system down.106 107

Testosterone Cycle

Researchers have been studying irrational exuberance, risk-taking, irrational pessimism, and risk-aversion. Researchers at the University of Cambridge in England (and others) found testosterone levels are tied to how much risk a man will take.108

The hormone testosterone is associated with higher levels of competitiveness, a higher willingness to circumvent rules and challenge authority, and higher risk-taking. Winning elevates testosterone levels. Losing lowers them. Even watching a team or team member win or lose can have this same effect. This means if 85 percent of traders in the financial sector are men, or 85 percent of leaders in any segment of society are men, society is vulnerable to boom-bust, aggression-retraction cycles.

A high speed, high-risk money-creation bank or a financial trading office with a big line of credit, unchecked, can lead to catastrophe. And given our monetary system, it can take the economy down with it. A trader makes a successful loan or trade and his testosterone goes up. Each success makes him more likely to increase the risk he is taking. In the early stage of a bubble, there will be successes for the early players, encouraging greater participation. The loan officer is rewarded for making loans – not on whether the loans are successfully paid back several years down the line, but on how many and how big he makes them. The bigger the loan, the bigger his commission, and the more pumped the loan officer is to make riskier loans. The amount of money created depends almost entirely on bankers’ confidence in their ability to make profits, which is influenced by hormones.

This increase in the money supply inevitably blows up asset bubbles. The speculators who are in early buy, sell and make great profits. This success increases the level of testosterone, which leads to taking greater and greater risk. Then as the bubble inevitably pops, the bankers, their testosterone levels bottoming out, withdraw from taking risks.

In California and Nevada in 2006 and 2007, nearly 40 percent of new loans were called liar loans or NINJA (No Income, No Job, no Assets), issued at an adjustable rate with low payments for a couple years and then a radical jump in payments.109 These loans, also called liar loans, were bundled into securities, stamped with high ratings by our ratings agencies and then sold to unsuspecting investors by Wall Street financiers. It is nearly incomprehensible that mortgage companies were pumping out loans without any paperwork backing up repayment plans, and rating agencies were giving bundles of them a high-grade rating. It is a kind of insanity that is difficult to explain, except by factoring in greed, male hormonal imbalance, and pack behavior.


Most of the Wall Street traders on the floor are young males – deliberately recruited for their hunger to achieve great wealth – as chronicled by Michael Lewis, Matt Taibbi, Suzanne McGee, Frank Partnoy, William D. Cohan and others. The frontal brain lobes do not fully develop until the mid 20s in males, and this is where altruism and contextual thinking develop (thinking of others and thinking of the big picture).110

It serves bank owners to have high-risk, testosterone driven, immature males at the trading and loan desks. They are more than willing to skirt the law to make profits, and with frontal brain lobes still undeveloped, they have no problem making suckers out of their own clients.111 Altruism, moral or ethical considerations do not intrude or impede. Immature, they have few scruples about hurting individuals or the economy. Living through this sensitive period for frontal lobe development in this money culture appears to block normal healthy development since the oldsters on Wall Street seem oblivious to their harmful impact on people and the world economy, too. Lloyd Blankfein, CEO of Goldman Sachs said after the crash in 2009, he’s just a banker “doing God’s work.” 112

When financiers are in a good mood and have confidence in the economy, they make lots of deals that generate fees and massive incomes. In the early 2000s, big investment houses made deals with individuals, with small towns and even countries that they knew were a dangerous risk for these investors. But, hey, it made them money. To them, it was of no concern that hundreds of thousands of people would suffer when the deals predictably went sour. Goldman Sachs reportedly made hundreds of millions in profits on elaborate derivative deals that were a big contributor to the Greek debt crisis in 2009.113 In 2016 Greeks struggled to buy medicine and food and CEO Lloyd Blankfein took home over $22 million in salary and his company stock had jumped from $53/share to over $253. This is what he calls “God’s work.”114

Adolescence for both genders is a time when we crave excitement, adventure and novelty. As Robert M. Sapolsky notes in his book, The Trouble with Testosterone (1998), adolescence is willing to say,

to hell with logic and sensible behavior, to hell with tradition and respecting your elders, to hell with this drab little town, and to hell with that knot of fear in your stomach. Curiosity, excitement, adventure – the hunger for novelty is something fundamentally daft, rash, and enriching.115

These are wonderful traits and deserve a substantial place in our culture. However, when we make these characteristics the overriding characteristics of our money system, our financial system, and our culture follows along and pushes aside the balance of prudence, conservation, caring about others and seeing the forest for the trees. Like an out of control adolescent, we come to grief. Again. And again.

Gender balance

Whether genetic or culturally induced, there are general differences between the way men’s minds work and the way women’s minds work; the outcomes that receive the highest priority, the way we communicate, and the role that preserving personal power and authority plays in addressing issues, are gender influenced. And hormones matter.

Research finds collective intelligence rises with the number of women in a group, and at least three women will shift a group to better problem solving.116 Even the military finds women in combat troops increase group problem-solving skills (though they also increase casualties).117 Until we have a balance of genders at the highest level of power, we will continue doing what we’re doing and getting what we’re getting.

Some countries are ahead of us in recognizing the importance of gender balance and require corporate boards and governing institutions be at least 40 percent each gender.118 In the US, there is a growing understanding that gender balance in companies is an indicator of a more profitable company. As authors, Jackie VanderBrug and Joseph Quinlan explain in GenderLens Investing: Uncovering Opportunities for Growth, Returns and Impact (2016), paying attention to gender balance when investing in companies can make you more money.119

There is a natural balance of men and women. Our money system and the financial strategies that support it will be healthier when the characteristics we think of as masculine and feminine are also in balance.

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