By the time Stephen reached the age of fifteen it was clear that if he was going to receive an education and earn his General Certificate of Secondary Education, it wouldn’t be at Sidmouth College. Things there had become untenable. His anxiety and social phobia meant that he could barely stand to be in a classroom with other children. He spent as much time hiding out in nearby fields and woodland as he did in lessons, and even when he was present in school, his behavior—the rocking, the walking in circles, the mumbling and screaming and shaking—were judged to be increasingly disruptive to other pupils.
Eventually, it was arranged that he would attend a small specialist unit at Exeter College for children who were “school phobic,” a diagnosable phenomenon also known as “school refusal” and which disproportionately affects children with mental health issues or whose home environments are marked by dysfunction and upheaval. Divorce or bereavement, for example, can cause school refusal as a child internalizes anxiety that something bad will happen to a parent while they are at school. That the same psychological process could take place in a child who has often returned home to find that his mother has been removed to a psychiatric ward does not require much explanation.
The classes at Exeter College were small, with only seven or eight pupils present, and often fewer, given that on any given day several would simply not show up. It was here that Stephen met John Paige, a cheerful and eloquent math tutor in his midforties. The pair very gradually formed a friendship that continued after Stephen completed his A levels at eighteen. Although, to begin with, Paige was struck by just how awkward Stephen was around the other teenage children.
“He found it almost impossible to talk in any group setting, or to even look you in the eye,” he says, and describes how Stephen would physically shrink back into his cheap plastic school chair during class discussions. It was not unusual for Stephen to just get up and leave the room if he found things too overwhelming. “If things got too intense, he would sort of physically cringe and just walk away very quickly. He found face-to-face contact with anyone almost impossible. He was immensely tense.”
Stephen and Paige tentatively bonded over a shared interest in space and time. “We struck up because I was teaching maths and he hated maths, but he was completely caught up in cosmology and Stephen Hawking stuff, which I was also slightly caught up in,” says Paige. “We used to talk about that, and I’d have discussions or arguments with him about maths being relevant to the sort of science that he was interested in. He was writing quite a lot of stuff of his own about the Big Bang and the Big Bounce, and they were very sophisticated. I asked to see his stuff, so he would bring it along and we would talk about it and then we would do a bit of maths. It worked.”
While the other teenagers in the special educational unit may have been school phobic, they did not struggle socially with one another. They chatted and joked, read magazines, listened to music, and did all the normal things that teenagers do. All of this was foreign to Stephen. He did not understand the references they were making. He had no interest in soccer, no interest in soap operas, no interest in the charts. To be honest, his lack of fluency in basic pop culture remains impressive to this day. He thought “The Beatles” were spelled “The Beetles.” When pushed, he says he could recall quite liking the Spice Girls. “I remember a few of their songs. But apart from that, I was an alien in that respect.”
The sheer volume of adolescent life was also a problem. The sound sensitivity he experienced as a result of his undiagnosed Asperger’s meant he struggled to process the noise of people talking at him from different directions; the pace of group conversations, the laughs and screeches and hoots, were all too much for him to process. He went to an outdoor rave, but it was a disaster. “I can only focus on one thing at a time, so when I have noise and then someone trying to talk to me at the same time? I can’t handle it. I’m overwhelmed.”
He continued to yearn for friends and friendship without being quite sure how to go about achieving them. Bonding with his math teacher over cosmology was one thing, but it’s not the same as what all the other teenagers around him seemed to have with one another. It wasn’t even that he was shunned or rejected by his peers. Often it was the opposite. “The shunning was more from my side in many cases,” he says. He remembered once doing surprisingly well on a school sports day and other children then coming to congratulate him. But he would not engage. “I was just suspicious. I thought they weren’t genuine, I suppose.”
As far as John Paige could make out, Stephen’s world consisted simply of his home and his parents. This was a problem, because his relationship with his father was, by now, verging on toxic. “He used to be pretty angry about his father. Very angry about his father,” says Paige. Stephen would say “terrible” things about Peter, although Paige says he remembered the force of the grievances more than the specific nature of them. Peter would shout at his wife and son. He would argue with Stephen about his need for specific food on specific days, and he would argue with Jenny about Stephen, about what was wrong with him and what should be done about it. “As they got older I think they became increasingly unhappy,” says Stephen. “He ended up practically living in the shed at the end of the garden.”
To the people involved in Stephen’s care during this period, it wasn’t the on-again, off-again presence of his mother that was a concern in itself, so much as the knock-on effect it had in his family. In 2000, when Stephen was fourteen, both his physician and his social worker observed this in their notes. Dr. Suleman’s psychiatric report includes summaries of these notes. In one, Dr. Suleman described how in July of that year, John Perry, a community psychiatric nurse with Child and Adolescent Mental Health Services, Exeter, wrote to Stephen’s physician, Dr. Morris.
John Perry wrote that his outstanding difficulties appear to be in his intense difficulty around peer relationships….Stephen had very little social confidence with people of his own age and struggled to communicate with them at any level. John Perry also felt that there was a high level of family conflict particularly between Stephen and his father.
Earlier that year, in April, Dr. Morris himself had observed the strain Stephen was under at home, and believed that
Stephen was at risk of psychological and emotional abuse due to continuing uncertainty of psychiatric illness exhibited by his mother and the constant stress and difficulty that it places on her relationship with her husband and the domestic arrangements.
Stephen occasionally wrote about this in his journals, although he dedicated far less space and time to it than he did to, well…space and time. Or to poetry. Or to phrases and expressions he would try to memorize and learn, or righteous screeds about impending ecological disaster and man’s insatiable greed. On December 25, 2001, at age fifteen, he wrote an entry in which he reflected proudly on the new Waterman fountain pen he’d received for Christmas—“which I am writing with now”—and which he hoped to use for all his subsequent journal entries. He then described how that day he and his parents went for a walk, but that it was “spoiled” by a large row with his father.
I have calculated that each day I will argue with my dad at least three times. It will soon be 2002—why does that sound bad? Perhaps it is the thought of another year of stress, worry and argument. Still, life goes on.
Then, at the age of seventeen, something significant happened: A relative came to stay. Julian Jackley arrived in Sidmouth midway through Stephen’s A levels and lived in the room at the bottom of the garden for over a year. Julian was Peter’s cousin. He was a skinny, shaven-headed man in what Stephen guessed to be his midforties. He came from London, preferred to dress in black, and wore large sunglasses and a leather jacket. It was not made clear to Stephen why Julian was suddenly staying with them, and to this day he still does not know exactly what the circumstances were that led him to decamp from London to come and stay in a glorified shed with a family of people, each with their own fairly severe psychiatric concerns. All Stephen’s father said was that Julian worked in the building trade and was a “black sheep of the family.” One of Stephen’s older relatives once described him as a “blackguard,” though this didn’t particularly register with him. “I didn’t know the meaning of that term then.”
But what Stephen did conclude is that Julian was cool. He smoked. He gambled. He spent whole days sitting in a pub. Where Stephen was naïve and idealistic, Julian was cynical and sarcastic. Stephen loved the outdoors, but Julian would cross the road just to avoid being in the sunlight. He had a nihilistic outlook on life. He listened to the Doors and read a lot of Spike Milligan. Very quickly, Stephen found that he was in thrall to him and came to view him as an older brother figure. Having spent his entire adolescence almost completely insulated from socialization and friendships, Stephen was malleable. Open to suggestion.
“Whenever a strong character crossed my path and conveyed a certain viewpoint, I was inclined to adopt it,” he says today. “When you are younger, you’re like that anyway. But perhaps it was even stronger with me because of the limited social interactions I’d had. It was like…this is it. This is how normal people should think.”
Julian let Stephen tag along with him. He introduced his teenage cousin into what Stephen called “the drinking scene,” by which he simply meant that he took him to the pubs of Sidmouth and Exeter. They drank beer and whiskey, a disinhibiting experience that Stephen enjoyed. Julian also took drugs, something he made no attempt to hide. Stephen started to notice that he always seemed “happiest at night, ideally after a few drinks and lines of cocaine.” This really stood out to him. The fact that most people, in general, often seem happiest after drinking or using cocaine didn’t seem to occur to Stephen. It was not long before he was smoking cannabis with Julian and experimenting with cocaine, snorting it in pub toilets. Almost immediately, Stephen observed something interesting. The drug seemed to wash away his social awkwardness and anxiety, allowing him to inhabit the noise and jostle of a busy pub on a Friday night in a way that would have seemed impossible a few weeks earlier. “It had the effect of numbing that side of me, making me more confident and letting me do stuff I otherwise would not be able to.”
Julian introduced Stephen to betting on horse races. And it was this, more than anything, that the pair bonded over. For Stephen, gambling became an obsession. He was shown that money could be made from…nothing, a concept that fascinated him as much as anything Stephen Hawking had written about dark matter or black holes. In fact, it quickly superseded his more esoteric interests. “I moved from being a studious but socially awkward A-level student to reading the racing pages of newspapers in classes, and skipping them in favor of reading the form in dark pubs or bookies where I could.”
It didn’t help that, at least to begin with, Stephen did very well as a gambler. It seemed he had a knack for picking winners at long odds. His family’s money problems were more acute than ever, which meant Stephen never allowed himself to place bets of more than £20, though he developed a “formula” for picking which horses to back, one that incorporated and accounted for a host of variables: the horse’s previous record, the success rates of its jockey and trainer, its preferred ground and distance, its handicaps, and the odds. It wasn’t an infallible system, but Stephen won hundreds of pounds using it over the course of a year or so. One accumulator won him £800, his biggest single take, and he began to entertain the fantasy that he could simply gamble his way out of his family’s poverty.
Stephen completed his A levels in physics, geography, and classical civilizations, but all that time spent with Julian in the run-up to his exams meant his results were not what he had hoped for. Still, they were strong enough that he could apply to university if he wanted to. But he didn’t. Instead, he was set on getting a job. So at the age of eighteen, he began the process of applying for dozens of different positions with different companies, ranging from energy suppliers to landscape surveyors. Initially, few companies even acknowledged his application, though as the weeks passed he did get invited to come in and do some interviews. Stephen says that, on reflection, this may have been a result of the fact that he forgot to put his date of birth on his CV, which meant that his potential employers didn’t know they would be interviewing an eighteen-year-old until a skinny figure walked into their offices in a school shirt and borrowed necktie and introduced himself as Stephen Jackley.
The majority of these interviews did not go well. Stephen’s Asperger’s made it very hard for him to connect with the people in front of him with ease, or to adopt the appropriate tone when speaking to them. It’s not that Stephen was always withdrawn, although he did have “a lack of confidence and self-esteem,” but rather that he could sometimes be too direct. He told one interviewer that they were “ageist” for not wanting to employ him, which didn’t go down very well. Rejection followed rejection. He couldn’t seem to make a good impression on anybody. The only piece of positive feedback he got was when one interviewer told him that he was obviously a very curious young man because of all the questions he kept interrupting them to ask. But beyond that? Nothing.
Stephen couldn’t understand why this was, which only made it worse. He was intelligent and motivated and full of questions, but none of these employers seemed to want him. Months dragged by and Stephen felt increasingly embarrassed and upset that he couldn’t find employment. What was so wrong with him that nobody wanted to at least give him a chance? “I felt rejected. I felt discarded by society.”
He was also thinking, increasingly, about the opposite sex. He would have liked a girlfriend, although he never actually used that word, referring instead to his desire for a “soulmate” when writing in his journals. He wrote ever more romantic poems in which nature is personified as a woman and Stephen takes the role of her chaste and faithful servant. At one point he noted down his “life objectives,” which consisted of three wishes:
To set foot on another world
To spend just one night and one day (preferably more!) with a soulmate, alone, and in total bliss
To build a new society in another world or beneath the oceans
None of these objectives seemed particularly possible to Stephen as he languished in Sidmouth. Winter came and the days were dark and wet, with cold winds rolling in off the sea. He drifted through the small town like a ghost, hiking alone in gray shadowy valleys and passing the time in dingy pubs studying the racing pages. But his winning system seemed to have stopped working and he was starting to lose more and more. The stockpile of cash that had kept him afloat since the previous year had dwindled to almost nothing. Julian had moved back to London, Ben Weaver had left for university in Wales, and the stress and conflict of his home life were constant. To make things worse, his father had been diagnosed with prostate cancer, news that Stephen struggled to process the implications of and so pushed to one side. He refused to sign up for unemployment benefits because he maintained that he’d get a job any day. But the call never came. Stephen stood on the high coastal path above the cliffs outside Sidmouth and he looked out to sea and fantasized about being somewhere else. Somewhere far away. And never coming back.
One day, Stephen visited John Paige in nearby Totnes. During a long walk through the countryside, he told his former teacher that it was quite possible they would never see each other again. With a cautious but convivial curiosity, Paige asked him why. Stephen told him that he intended to travel around the world. His friend bit his tongue. The idea that Stephen—Stephen, a teenager who was barely able to make it to school on his own—might be capable of traveling around the world seemed beyond unlikely, never mind the fact he clearly could never afford to do so. Paige smiles at the memory. “I remember thinking, ‘Fuck that. That’s ridiculous.’ ”
Only, a few weeks later, Paige came down his stairs one morning to find something bright and gaudy peeking from beneath the pile of mail on his hallway floor. He bent down to investigate and found a postcard. From Stephen. And he was, somehow, in Bangkok.
Just when it seemed luck had completely deserted him, Stephen hit a lucky streak with the horses. His betting system suddenly began to fire again, like an old car engine that finally purrs into life after the twentieth twist of the ignition. In early 2006, over the space of a week or so, he made several hundred pounds in profit. Then he did some research and discovered that for £700, the Student Travel Association offered round-the-world plane tickets, with stops in various places across Southeast Asia, Australia, New Zealand, and America. The prospect of such a journey was daunting. But after an entire childhood spent looking at maps and globes, fantasizing about smelling mint in the forest and lying in the desert looking at the stars, he knew he had to go: to do whatever he could to put half the world between himself and Manstone Avenue. He told John Paige that they may never see each other again because he wanted to believe it, and that his dream of running away and never coming back might come true.
His parents did their best to discourage him, particularly Peter, who didn’t like the idea of his son being “out of reach.” In the end, though, it was Peter who gave his son the last few hundred pounds needed to make the trip practicable. Which was how, in January 2006, Stephen found himself walking through Bangkok with a large backpack and an expression of tentative happiness on his face. It was like nothing he could have imagined, the skyscrapers, ornate golden temples, and wooden buildings built cheek by jowl. The Buddhist monks in their bright robes paying early morning visits to shrines. The noise and organic chaos of the traffic and tuk-tuks. Street vendors hawking everything from tropical fruit to dried snakes to bright and shiny trinkets while, overhead, monkeys skipped from tree to tree, sometimes pausing to peer down at him with blank, appraising eyes before vanishing with a jump.
None of this overwhelmed him in the way he’d feared it might. Instead, he felt energized and alive. In Sidmouth, he was isolated, unwanted, invisible. In Thailand, strangers smiled at him and said hello as they passed. He didn’t always know how to respond, but there was no pang of awkwardness. He did not find himself bowing his head or averting his eyes. Staying in hostels, he traveled along Thailand’s coast, heading east toward Cambodia. He passed through resort towns teeming with traffic and tourists, and spent nights on empty beaches off the beaten track. More than anything, it was the sense of freedom that made him feel giddy. He was not in his bedroom peering at a map and imagining all of this, or fantasizing about it in his diaries. He was here, in real life, diving in tropical seas and exploring ruined temples in the jungle. It’s not that the sadness, stress, and fear of the previous ten years had left him. It’s that he had left it. Far away. On the other side of the world. He had escaped.
One night in Thailand, Stephen was sitting by himself in the quiet bar of a backpacker’s hostel. He was writing in his journal when he heard a voice and looked up. Standing next to his table was a Thai woman in her early twenties. She introduced herself to Stephen as Chailail and, in perfect English, explained that she worked behind the bar and thought that she would come over and say hello. She smiled. Stephen blinked. There was a pause before he put down his pen and quietly introduced himself. Chailail sat down beside him and started to ask questions about where he had been in Thailand, what he had made of her country, and where he planned to go next. And Stephen started to tell her.
Stephen was naïve, but he was not stupid. He had already seen enough of Thailand to know that, in some places, Western men automatically attracted attention from local women. “You could be a hunchback dwarf with horns coming out of your head and still have approaches.” But this did not feel like that. She was not some teenage girl just coming up to him with a fixed smile while softly repeating the word “hello.” Instead, she was a university student from Bangkok. She seemed smart, curious, and genuinely interested in knowing where he’d come from and where he was going. Stephen was attracted to her and she was attracted to him, a slim, reserved young man who was spending the evening writing in a journal rather than getting shit-faced and trying to round up girls for skinny-dipping or beach parties.
Ever since he started to experience an interest in the opposite sex, Stephen’s problem had been that talking to girls he liked was even harder than talking in front of his class.
“I think a lot of the times girls tried to form a relationship with me or just be friendly,” he remembers. “But I would just automatically feel quite awkward and shy, and then they would assume I wasn’t interested because I wasn’t maintaining eye contact and I wasn’t smiling back.”
But tonight, in the quiet backpacker’s bar, Stephen did maintain eye contact. Or at least, he tried his very best to, harder than he’d ever tried before. They spent the rest of the night talking. They arranged to meet the following day. And the next day. And then the day after that. She taught Stephen some Thai words and he repeated them so solemnly and precisely that she laughed and he didn’t understand why. At some point, they kissed. And for a while after that, they barely stopped kissing. Stephen lost his virginity. He and Chailail arranged to go traveling together, and for the next few weeks, the two of them explored eastern Thailand, rattling around the lush countryside in old buses and cramming against each other in the squeaky single beds of hostels. Stephen asked lots and lots of questions. They visited temples and shrines, and he began to develop an interest in Buddhism, buying up cheap paperbacks on the subject as they moved from site to site and town to town.
Stephen tore through the books. He absorbed new words and concepts: dharma, karma, the idea that pain and suffering stem from mankind’s desire to crave and cling to impermanent things, be they wealth or love or sensory pleasure. He thought about Sidmouth and the endless days spent in pubs and bookies with Julian, the bullet-point lists of wishes he wrote down for himself, the yearning to have his mother simply stay his mother and not keep turning into a stranger, cold, distant, and frightening. He turned his past over and over in his mind. Beside him, Chailail snuffled and slept.
These weeks were a learning curve for Stephen, who had never before been in any kind of romantic relationship. Sometimes he upset Chailail with his directness. Sometimes he made what he felt were innocent observations about Thailand or Thai people that made her angry or, even worse, go completely silent for hours at a time. “Sometimes she would not talk to me and I would say, ‘Why are you being like that?’ I couldn’t understand. I just said whatever was on my mind, really. Even now I sometimes wonder whether I can read people in the same way most people would,” he says, discussing how his Asperger’s appeared to jam his ability to pick up on nuance, inference, and subtle, nonverbal social cues. He says he probably learned these things in the same way a computer would, by adhering to pre-learned patterns rather than by intuition. “I’ve got it wrong many times. Many, many times.”
In the case of Chailail, it’s hard to gauge how much of their difficulties could be chalked up to Stephen’s Asperger’s and how much was simply because he was a nineteen-year-old experiencing his first relationship. As they explored the beaches, jungles, and villages of southeastern Thailand, it became clear that Chailail was not the soulmate Stephen had dreamed of meeting for so long. After two or three weeks of travel, she had to return to Bangkok and Stephen wanted to press farther east, into Cambodia. They said goodbye and agreed to stay in touch, possibly even meet up later in Stephen’s travels. They swapped emails for weeks afterward, and Stephen even went through periods of missing her as he traveled alone. But despite some half-baked plans to eventually reunite, they never saw each other again.
Stephen crossed into Cambodia, riding buses eastward, toward the city of Siem Reap and the sprawling twelfth-century temple complex of Angkor Wat. As he passed through towns and villages, often stopping off for food or to spend the night at a small hotel or hostel, a sensation began to grow inside Stephen, a tension in his head and chest that made him feel flushed and uncomfortable. These places and these people were poor. Incredibly poor. Poverty unlike anything Stephen had ever seen or imagined. Many of the houses appeared beyond flimsy, made of nothing but rusty sheets of corrugated metal and bamboo. There were skinny children, shoeless and dirty. Whole families doing nothing but sitting on roadsides in silence, looking weary and resigned, seemingly waiting patiently for something, though he couldn’t imagine what.
He began to fixate on the poverty he saw in Cambodia. Thailand had been exciting: a release, an adventure. But seeing the conditions these people lived in made him feel impotent and ashamed. The other Western backpackers and tourists he met all admitted, with a sigh, that when traveling through parts of Asia it takes a while to get used to the poverty. Stephen, however, could not get used to the poverty. He didn’t understand how anybody could. He had always thought that he and his family were poor and disadvantaged, but here he started to understand what a naïve and self-pitying outlook that was.
Whenever he had the opportunity, he used hostel computers to search the Internet and find out about where he was. Around 40 percent of Cambodia’s rural population live below the poverty line. Around a quarter of all children are engaged in child labor. Thanks to the legacy of civil war, millions of still-unexploded land mines litter the countryside. Because of these mines, Cambodia has more amputees per capita than anywhere else in the world, and a disproportionate number of these are children. Sometimes when his bus passed through a village, Stephen glimpsed a child playing by the roadside with other children, and he just had time to register that something was wrong with the picture and that one of those skinny kids should have had four limbs but didn’t. He looked around at his fellow passengers and saw a British gap-year student down the aisle dozing contentedly, or singing along to a pop song while sharing iPhone headphones with a friend, and he balled his fists and drove his knuckles into his forehead.
In big towns and cities, it was even worse. The contrast between luxury and poverty was as vivid as it was raw. In Siem Reap, the gateway to Angkor Wat, there were a dozen luxury hotels aimed at high-end travelers. Staying at the Amansara resort, Stephen learned, cost $650 a night. Some hotels charged over $1,500 for their most opulent suites. Visitors paid $1,375 per hour for helicopter tours of the Angkor Wat complex. One or two streets away from these oases, Stephen could see Cambodians sifting through piles of rubbish, or begging on the streets, blind or limbless. Initially, he wasn’t sure what to do—he felt exactly how he’d felt when he passed that homeless man in Exeter—but this time he didn’t put his head down and ignore the outstretched hands. He went out and gave away some of his cash to street children and beggars. He explored the possibility of volunteering for a land mine NGO, but his own meager supply of travel money was almost spent and he knew there’d be no way he could afford to work in Cambodia for free for a year.
He drifted back toward Bangkok in order to catch a scheduled flight to Singapore that would then take him on to Australia. As he traveled he became sullen, his mind replaying what he had seen over and over. His planned route back took him through Thailand’s Khao Yai National Park, a lush landscape of forests, lakes, waterfalls, and hiking paths. He stayed in a comfortable log cabin, and for a day or so, the sheer beauty of his surroundings soothed him. One afternoon he rented a mountain bike and explored some of the trails. The bicycle chain snapped, so he dismounted and continued to explore the jungle on foot, skirting great fallen trees and climbing over boulders. At one point, he stumbled across a small hamlet and, just like that, the sight of poverty snapped him out of the reverie of his hike. The barefoot children. The chickens strutting the dirty street. The run-down, ramshackle homes. Hot anger and embarrassment flushed through him and he turned away, feeling like an ignorant, intruding voyeur.
He retreated back into the jungle, walking quickly, breathing hard. After an hour or so, he began to realize that he had no idea where he was. Whatever trail he had taken into the jungle had just…vanished. The map he had with him was no help at all. The sun was beginning to set, the temperature was starting to drop, and black clouds of mosquitoes were hounding him. Trying his best to remain calm, he attempted to retrace his steps back to the village, but couldn’t. He shouted for help but as the echoes died, the only response was the low buzz and chatter of the jungle. Eventually, he accepted the inevitable. He was completely lost and would have to spend the night in the jungle darkness.
On a large, flat rock beside a small stream, Stephen curled up in his shorts and T-shirt and tried to sleep. He couldn’t. The sound of creatures, close but unseen, moving around him kept him awake. So did the cold. So did the sensation of being utterly alone in nature, of being the only human for miles in any direction. He looked at the stars, and they only reaffirmed to him just how remarkable it was that we exist at all. But it also made him afraid. In twenty years’ time, will this jungle even be here? Just a morning’s drive away was the concrete and traffic of Bangkok. “It made me realize how much the world is changing,” says Stephen. “There are not many places left like that, and it just gave me a feeling of ‘What is humanity doing to the world?’ ”
Dawn came and, shivering and exhausted, Stephen managed to find his way back to a path. He followed it and arrived back at the village he had stumbled across the previous day. Despite his awkwardness and embarrassment, some villagers approached him. They could see he was cold and tired. They invited him to sit. They brought him food and bowls of rice. Some handed him small gifts. One man had a cheap mobile phone and called the park ranger’s office to explain that they had a lost Western man in their village who needed collecting. A Jeep arrived soon after and took Stephen back to his comfortable lodge.
The night in the jungle changed him. He had ordered his thoughts and emerged with a clear sense of conviction. Everything he had ever suspected about the unjustness of the world and the built-in inequality of modern global society was true. He had seen it with his own eyes. He thought of the children scrabbling through rubbish piles for something to eat and then considered the fact that the largest component part of America’s gross domestic waste is food. Food! In fact, America burned so much uneaten food it would, in 2006, account for almost 15 percent of the country’s carbon emissions. Man’s greed means that Earth does not face just ecological catastrophe, but humanitarian disaster under a system that forces more than half the world’s population to survive in poverty while the rest live in a state of complacent, selfish plenty. The backpacking trustafarians he met who railed against capitalism despite traveling with their parents’ platinum cards and the rich couples who bragged about haggling down local traders enraged him. But they were only doing in microcosm what their societies have been doing to the developing world for decades.
As he sat on his flight to Singapore and then on to Perth, he churned this over and over in his mind. He wanted to make a difference. But the problem was money. A whole system of international finance, banking, and mutual corporate interests locked this all in place. What could he do when faced with that? He stared out the window of the jetliner and thought.
At almost exactly the same time that Stephen was alone and shivering in the jungle, something happened in America that would affect the lives of billions. The Federal Reserve raised interest rates to 5.35 percent, the latest in a series of hikes that had seen rates rise by 4 percent over two years in an ongoing attempt to slow inflation. This final rise caused an existing slowdown in the United States housing market past the point of no return. People who could afford their mortgages only when interest rates were low now started to default on their debt. And the millions of Americans who had been sold subprime mortgages—high-interest loans sold by banks to those with low incomes and little or no credit history—started defaulting in droves.
This had not been the banks’ plan. The logic of making subprime loans available in the first place had been straightforward. By making home ownership more accessible, banks had hoped that they would increase demand for housing. This increase in demand would, in turn, cause house prices to rise. As prices rose, it would grant the lending banks greater security because the value of the real estate on their books would rise accordingly.
For a while this is exactly what happened, with banks encouraging millions of low-income Americans to take out subprime loans in exchange for their own little slices of the property market. But when interest rates began to rise, the cost of repaying those loans became impossible for many, and the defaults began. Houses poured back onto the American market, increasing supply and driving down prices. The U.S. housing bubble, inflated by banks, finally went “pop.”
This not only was a tragedy for the families who were left homeless and ruined, but it also had huge consequences for the global financial system as a whole. Banks buy and sell debts. There is an international, intra-bank debt market worth trillions of dollars. In a process known as “securitization,” the bank who sold you your mortgage could decide to take a tiny slice of your debt and combine it with other slices of many other customers’ debts until they had a big bundle of these fine slivers. They could then sell these bundles to other banks as a complex financial product called a collateralized debt obligation. Selling CDOs in exchange for cash allowed the bank to clear these debts from their books and raise capital. Buying CDOs earned patient investors a huge, slow-burning return as the debts were repaid with interest.
And because CDOs were made from so many different tiny slices of debt, they felt safe. This was their primary appeal. Banks could slip slices of risky subprime debt in among slices of more stable debt without devaluing the overall product. It’s like being attached to a hot-air balloon by a thousand small strings. If one or two or even a hundred people defaulted on their debts, thus snapping their strings, it’s not a huge deal. You would still be held safe by the perfectly healthy debts of the thousands of other people who were still able to service their mortgages. These strings remained strong.
Banks and their shareholders, however, do not like taking risks. Or at least, they don’t like facing the consequences of it. Which is why CDOs and similar products are a thing. You encourage ordinary people to put themselves at risk by taking on a debt to you and, in the case of subprime mortgages, a debt that you know perfectly well may ultimately exceed the real value of the home they are buying. And while this ordinary person may have their life ruined when they cannot repay this debt, you, the bank, have inoculated yourself against any such outcome. Thanks to CDOs, the actual consequences of a few customers going broke were diluted to almost nothing. It was expected and allowed for. It was clever. Individuals took the risks; the banks reaped the rewards. They kept floating serenely upward, on warm swells of interest, far removed from the occasional repossession or bankruptcy back on Earth.
But as more and more Americans began to default on their debts, more and more strings began to snap, and the CDOs began to look less and less safe. As a result, they lost their value. Not just because they were no longer the sure bet they once were, but because even calculating their value became very difficult. How much of each CDO was rotten, made up of bad subprime mortgage debt? Because they were such complex products, it was very difficult to know.
This meant that as 2006 continued, banks found themselves increasingly unwilling to lend money to other banks. Why? Because if you’re a bank and you lend money to another bank whose books are balanced with ever more worthless CDOs, how can you be confident they are going to be able to repay you? Suspicion and doubt spread from New York to London to Singapore. Banks began to nervously draw whatever liquid cash they held close to their bosoms. The money market—literally, the international market for the buying and selling of money—began to stall. The financial institutions were now feeling the same anxiety about money that ordinary people around the world felt every single day. They felt nervous and exposed and uncertain. Having set this chain of events in motion, though, they did nothing to ease it. In fact, they simply made it worse. By refusing to issue credit to businesses, the specter of job losses loomed. Bankruptcies. Repossessions. Recession.
There was a crunch coming. A global economic crisis that would define politics, culture, and society for a generation. As the full scale and scope of what was unfolding became apparent, popular anger toward banks and the elites who willingly enabled them intensified. The idea of “the 1 percent”—callous, reckless elites—became widespread and accepted across the political spectrum. Countless numbers of people watched the news or looked at the world around them and demanded that these institutions be punished. That somebody do something.
And before long, somebody did.