The Death of ‘Cruel Arrogance’?

Arrogance will never die of course, but hopefully the last few months have set it back a pinch.

Arrogance will never die of course, but hopefully the last few months have set it back a pinch.


The Wall Street Journal had a remarkable piece this past weekend on the banking boom and bust of Iceland. An entire economy – currency and all – obliterated. Beyond the appalling failures of the credit system, the most chilling observation emerging from the story is the fact that most players were under the age of 35. Take Larus Welding, the 32 year old CEO of Glitnir Bank who ran the ‘Icesave’ service that led hundreds of thousands of Britons to sock their money away in his Icelandic bank. He led them straight off a cliff along with millions of dollars of other people’s money.

One of the smartest guys I knew in college went into investment banking with JP Morgan in the early 90’s; bright, funny, loyal and exceedingly talented. I visited him at the Hotel Nikko in Mexico City one weekend as he worked on a project for the Mexican government’s oil industry (he was with the consulting firm McKinsey then – prior to his JP Morgan days).

We were both only a couple of years out of school. Shortly after I arrived, we sat at a bar with drinks in our hands, laughing and sharing stories. I must have shaken my head at something he said – truly I do not remember – but he asked me very earnestly, ‘what is it about what I do that bugs you so much?’

I bumbled through a very poor answer. We laughed. We drank more. We never really talked much about it again. But I have though about it over and over again in the intervening years.

The answer is arrogance. More accurately, it is not arrogance, rather ‘arrogance with cruelty.’ My friend did not have that ‘arrogance with cruelty’ He was too good of a guy to lose himself so completely. But he had been around it enough to smell it. To wonder about it. Perhaps even to emulate it at times.

Of course arrogance is sometimes needed. It is needed to step into situations where others are timid. It is needed when decisive action is the only thing that can salvage the moment. It is needed countless times in countless ways by the people who are in the fray battling and scraping their way through the mess at the outside envelope of our society. Most people would not want to go there – but they certainly do not mind living under the blanket of economic prosperity created by the efforts of those less timid.


But cruelty? Avarice? No. They are not really needed in those moments. They are the residue. They are like the exhaust fumes of combustion. They create no energy, they build nothing. They are the erstwhile pollutants of real accomplishment.

I am deeply saddened by the real pain wrought by this economic crisis. I hear stories daily that are all too human and all too real. But I am glad for a few things. I am glad that it is dealing a crushing blow to the cruel arrogance of financial wizards and snake oil salesmen the world round.

There are many faces that I am not sorry are gone. The face of the former NFL player in Atlanta who bundled gigantic chunks of subprime mortgages and peddled them to Wall Street on the marginal strength of his former name. He knew they were terrible investments, but he wanted that house in Beaver Creek… Or the face of the 30 year old at Merrill Lynch who never saw a public school growing up, barely understood his sales job at the MBS desk, lied through his teeth to pension fund managers, and celebrated his ill gotten gains at the bar down the street every Wed through Sat. The face of the banker who thought he was a player when he convinced his conservative board to dive into CDO’s because he knew way more than them. The face of the Certified Financial Planner who acted for all the world as if he understood ’asset allocation’ and ‘risk tolerance’ even though he learned it on a multiple choice test the weekend before. The face of the greedy mortgage broker who employed used car sales tactics to refinance his family and friends into terrible mortgages with even more terrible consequences – because he needed that monthly injection of commission to keep leading his excessive life of posturing and pretending to be ’somebody.’

Quote all the statistics in the world. Market down by such and such. Housing starts down. Credit default swaps in crisis. Make all the macroeconomic observations in the world. Global contractions. Commodity bubbles. Political pandering. Surplus cash in China and oil exporting nations. American borrowing. Talk all you can about the work of the American government. Moral hazard of bailouts. Monetary easing. Reduction of endogenous liquidly. But at the core of it all, at the very center of organism were people.

Most were good. Some were innocent. As a free market faithful, I believe all of us had a role. All of us have a role. But the ones I am not sorry to see go are the ones who thought they knew it all. The ones who arrogantly celebrated their super-sized wins as if they came at the hand of super-sized talent. The ones who forgot that normal Americans, with normal paychecks, and normal appetites are critical to the general economic prosperity of all. The ones who never gave thanks for their success by acting with decency.

There is a balance of course. Normal Americans are also overreacting. They are calling for blood of all kinds, not just the type that needs to be let. They too forget that we need the titans, the wizards and yes, the slightly arrogant, in order to keep our economic machine running. I am a long way away from their camp.


To me, it is sliced more thinly. People in the financial world that have acted with arrogant cruelty in recent years are now gone. I will not mourn their loss, nor will I hasten their return. In fact, I am hoping that their rout will become one of the small bright spots in this season of extraordinary things.

About the author

Steve Curnutte (Kur-NOOT) is a principal and founder of Tortola Turnaround a Tennessee based restructuring advisory firm focused on the insolvency arena. He is also founder and fund manager of Capstan Fund, a Distressed Opportunities Fund.