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Sunday, 29 August 2010

The power of Randall

Review by ABBY WONG

The Zeroes: My misadventures in the decade Wall Street went insane
Author: Randall Lane
Publisher: Portfolio

“WE WANT YOUR MONEY!” shouted a pair of crass property developers on stage at a party in London’s trendy Penthouse Club which was jam-packed with opulent and sleek-looking hedge funds managers spawned by the recent financial bubble.

While these financial wizards, with or without the necessary Midas touch, were making billions managing “Other People’s Money”, lots of other people outside Wall Street were salivating and trying to get even a small clump of their wealth.

During the swelling years before the financial markets cratered, hedge funds managers were the new rock stars everyone wanted to meet or aspired to be mainly because they were abysmally rich. And they still are.

Strange enough, the role of facilitator at this definitive crossroad of morphing hedgies into celebrities and making their gluttonous ways of life de rigueur landed on Lane Randall, a former editor who founded one of Wall Street’s most popular magazines, the now defunct Trader Monthly, yet unceasingly purported to be skint.

Whether he was genuinely poor or simply was not an entrepreneur crafty enough to gain from a great number of billionaires with whom he rubbed shoulders with, Randall, by writing this book, has opened our eyes to the financial bacchanalia, a decade-long gold rush in which Wall Street and its constituents were in their quixotic pursuits of wealth.

Randall aptly calls this period The Zeroes.

While recounting his experience at Trader Monthly, as well as a handful of other luxury magazines he founded, Randall discloses the wanton earnings, spending and squandering of some of the mega traders his magazines featured in or he collaborated with as a magazine publisher.

The wealth of these arrivistes was as unbelievable as their ways of living.
“No longer were the best financial industry players content with a payday. Instead, sometime around 2002 or 2003, compensation hit a new stratosphere mimicking the GNP of small countries.”

But with so much money made or to be made, there simply wasn’t enough stuff of real value to buy.
Hence, money went to buy watches, real estate, cars, private jets, paintings, wine or even burgers at ridiculously insane prices.

The swindling of money, unfettered and slowly becoming the spirit of the time, was shocking and could easily make one foam at the mouth.

If a US$175 Kobe beef burger was not a good enough lunch, then most possibly neither was a US$1,000 lobster-and-caviar pizza.

If you marvel at the materialistic euphoria at the time, cringe you will at the ways these nouveau-rich made their money.

Some – if not all – hedge fund managers might have made their winning bets by sheer luck and then extorted their members a 20% share of the profit.

Others, private equity speculators, swelled their bank accounts with money made by swapping companies that were bloated with overpriced assets and wasteful costs.

Likewise, if you are agape while reading this book, another reader may hurl it across the room, feeling aghast by the notoriety of denizens of financial markets, Wall Street in particular.

Though Randall writes not to condemn the rich traders whose appearance in his magazines had helped bring in lucrative advertising revenues, he does damn a host of business partners with whom he unpleasantly got involved.

But what Randall never admits is that he seemed like a lousy businessman who made the same mistakes over and over. Quite possibly, as readers can easily surmise, he, too, had fallen prey to the mind warp prevalent at the time – the breathless and reckless pursuit of more zeroes.

As the market careened towards disaster in 2008, so did Randall’s media empire.
His company eventually filed for bankruptcy and he personally lost half a million dollars.

“Maybe, in that example,” he concludes, “there was a lesson for Wall Street.” But no.
While the epic mess is being dealt with, the game played on, timeless and unabated.

Randall has been ejected but the trading community continues to toast for yet another record bonus payout in 2009.

Hopefully, the sales of this book will help Randall recover some losses.
After all, it is a highly readable and entertaining book.

The power of Randall lies in his depiction of the decadence of Wall Street during the Zeroes as well as the cupidity of some of the hucksters who forcefully joined the revelry.

I highly recommend this book to businessmen, traders, bankers, deal makers, funds managers, finaglers, charlatans, or rogues as a useful lesson for their respective endeavours to enrich themselves in fanaticism of the 21st century.

1 comment:

  1. Hero or zero? A decade of BIG ZERO!