Wall Street Backlash: A Wave of New Books Is Anything but Upbeat. What Do They Say about Investors and the Economy? (Briefing)
Bielski, Lauren, ABA Banking Journal
The fact that Wall Street looks out for Number One is hardly a newsflash.
Until recently, though, an awful lot of people embraced the assumption "greed is good," made infamous by the Gordon Gekko character in the 1987 film Wall Street. Now that corporate scandal is nightly news fare and the economy limps along in what feels like second gear on a good month, people are beginning to question the whole premise.
Or so it would seem as evidenced by a rash of books that have been published on, or related to, Wall Street's agenda, investment strategies, or the economy in general.
These include Markets Mobs and Mayhem, John Wiley & Sons, by Robert Menschel; Take on the Street: What Wall Street and Corporate America Don't Want You to Know, Pantheon, New York City, by Arthur Levitt and Paula Dwyer; The Brainwashing of the American Investor: The Book That Wall Street Does Not Want You to Read, Dimensions, by Steven R. Selengut; and The Mind of Wall Street, Public Affairs Books, by Leon Levy.
Why the rueful tone now? Clearly, after Enron and in the wake of anemic market rallies, the mood is sour. And, a bit of bandwagon marketing may be at play here, too. After all, if one such book can sell, then why not three, or eight, or ten?
"I think publishers know what the reading community will have an appetite for and so you'll see a lot of these pessimistic books for a while," predicts Carl Tannenbaum, chief economist with ABN Amro, based in Chicago. "Just as the tone a few years ago was overly optimistic, proclaiming year over year growth for perpetuity, now you've got books out there saying that the sky is falling," says Tannenbaum. "The truth, of course, is some-where in between."
Still, there appears to be more to the Wall Street backlash book boom than fashionable reading. And though the books differ somewhat in the tone, outlook, and the advice presented, almost all seek to show investments in a larger context. It's as if, in unison, the authors want to get the message out: get smart-or else. "Investors need to understand how the system works and then, take real responsibility for their portfolios," asserts Steven Selengut.
Long on invective and somewhat "under organized," Brainwashing, with it's feeding shark on the cover, might easily be dismissed. Still, Selengut does readers a service when, with careful examples, he stresses the notion that Wall Street firms don't have their best interests at heart (or at least, not on par with careerist concerns). Nor are said firms particularly "watched" despite all the regulatory machinery that governs the investment community. The author offers his take on how to become a well-prepared investor, with the memorable advice: eschew all mutual funds-they are the investing equivalent of eating pre-chewed food.
Taking on the street
The aspect of Selengut's book that seeks to explain the Street seems to be a popular goal. Several of these books seek to examine the mechanics, prejudices, and tics of Wall Street with the same scrutiny once reserved for picking hot stocks.
In The Mind of Wall Street, Leon Levy, the founder of the Oppenheimer Funds, has, on some points, a similar message to Selengut's book with the more muted and assured tone of an insider.
The book, which is mix of memoir and observation about the nature of markets, touts the oft-dismissed role of investor psychology as well as the factors that produce corporate profits and create value in the market. Levy, like some others mentioned here, believes the specter of debt and increasing difficulty of competing in global markets means that a long, hard market correction is due.
Take on the Street: What Wall Street and Corporate America Don't Want You to Know, by Arthur Levitt, is perhaps the highest profile of these books and the one least easily dismissed.
The former Securities and Exchange Commission's chairman was it's longest serving senior executive, serving throughout the 1990s bubble. …