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Not much in common with Wall Street today, I Hope!
on November 22, 2000
Criticisms of this book center around the details of bond trading, specifically the authors miscalculation of commissions. Also, perhaps, some hearsay is included as facts. The author states that no anonymous sources are quoted, but there were un-named and 'not-for quote' sources used.
You either believe that the main characters (Michael Milken, Ivan Boesky, Martin Siegel, Dennis Levine)said what they said in the book or not. It's relevant because if true,Levine was a bigoted racist as well as a common thief. Not only did he rummage in associates desk drawers and files looking for inside information but he is quoted as saying that he could not understand a banker friend (who was interested in international lending to Third World countries)because all he wanted to do was "help the niggers and the spics." How's that for your respectable Investment Banker?! The point of the quote is this - Levine was not representative or typical of the 'new' banker but his comment shows that motives such as self interest and personal greed would certainly have found fertile ground to flourish in.
The book accurately portrays the characters (including the seedy ones),their backgrounds and the environment they found themselves in. Wall Street of the late 1970's and early 80's was changing.The Wall Street establishment of old money investment houses (Goldman-Sachs,Morgan Stanley,Kidder Peabody, Merrill Lynch, etc)and stately (maybe even stale)banks such as Citibank and First Boston were being forced to make room for investment brokers and arbitrageurs (Drexel, Burnham & Boesky & Co. etc).
New products, new people, new methods were being introduced. The new bankers were not your starched white shirt, conservative, Ivy League trained, WASP corporate types. They were first of all, younger and from different class, educational and ethnic backgrounds. Many of them were from immigrant or Jewish working or middle class families and felt themselves to be ostracised and generally outside of Wall Street. They were not all motivated by greed and certainly were not all Dennis Levines, but for a few, given the opportunity,the positions of power and the money, and now that they were 'In' they were going to change things around. Sales techniques and hustle was now more important than where you graduated from. Presentations to corporate boards were out, replaced with speadsheet analysis of cash flows and trades over the phones. The movement was towards allowing some who were previously spurned by Wall Street to get in on the action. They were going to shake up the system and as Milken himself said "tee up GM, Ford and IBM and make them cringe".
I don't find the book villifying Milken as the Devil himself but then again it doesn't portray him in a positive light either. I don't have any problem with that because I am of the view that he was a crook. A brilliant, driven, powerful and extremely wealthy and well connected financial innovator but... still a crook.
Overall the book is written with a bias towards the SEC investigation and uncovering of the insider trading scandal and the subsequent arrests of Levine, Boesky and Milken. From the perspective of 10 years on, the book is of more historical interest. All of the principals have served their time and most of the companies are gone (merged or metamorphosed). There are some interesting vignettes of people who since then have gone on to bigger and better things. You can read about Robert Rubin when he was still at Goldman Sachs, Rudy Giuliani when still US Attorney and Chuck Schumer when still only a Congressman who was critical of the SEC. There are also 8 pages of photos of the major players.