The Zeroes: My Misadventures in the Decade Wall Street Went Insane

323 Pages·2010·1.63 MB·English

by  Randall Lane

Table of Contents

Title Page
Copyright Page
Dedication

PART 1 - FEVER
Chapter 1 - See It, Make It, Spend It (2001-2004)
Chapter 2 - Starmakers (2005)
Chapter 3 - The Jealousy Machine (2005)
Chapter 4 - Doubling Down (2005)
Chapter 5 - Dealmaker (2006)

PART 2 - MANIA
Chapter 6 - We Want Your Money (Late 2006-Mid-2007)
Chapter 7 - The Blank Check (2007)
Chapter 8 - Fight Night (Mid-2007-Late 2007)
Chapter 9 - Nails (Late 2007-Early 2008)
Chapter 10 - Maxed Out (Early 2008)

PART 3 - RECKONING
Chapter 11 - Leverage (Mid-2008)
Chapter 12 - The Party’s Over (Late 2008-Early 2009)
Chapter 13 - See It, Spend It, End It (2009)

Acknowledgements
INDEX

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First published in 2010 by Portfolio, a member of Penguin Group (USA) Inc.
Copyright © Randall Lane, 2010
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Lane, Randall.
The zeroes : my misadventures in the decade Wall Street went insane / Randall Lane.
p. cm.
Includes index.
eISBN : 978-1-10143483-3
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To Mom, for the unconditional trust and love, and the idea to write this
PROLOGUE
Anyone who has ever been on an active trading floor can testify to the din that
can emanate from full-bodied, full-throated men locked in daily combat over
large sums of money. On November 1, 2007, my company, Doubledown Media,
publisher of Trader Monthly, Dealmaker, and Private Air, the magazines that
had set the tone for the decade’s wanton earning and spending on Wall Street,
stacked almost one thousand of the financial elite three layers high in New
York’s century-old Hammerstein Ballroom, a grand hall designed to challenge
the Metropolitan Opera House acoustically, for our first-ever Wall Street Boxing
Charity Championships.
We fattened them up, proffering beef tenderloin seared medium rare. We
liquored them up, placing at each table a five-liter bottle of Imperia vodka, a
just-launched “premium spirit” owned by a newly minted Russian oil billionaire
who claimed to have rediscovered a nineteenth-century formula that Czar
Alexander III had once decreed the standard for all vodka: winter wheat taken
from the black soil of the Russian steppes, distilled with glacial water from Lake
Ladoga, and twice-filtered through quartz crystals hacked from the Ural
Mountains.
If our guests wanted a little privacy, they could sit in a $400,000 Mercedes
Maybach, a three-ton rolling first-class cabin for those who had graduated from
the burden of driving to lounging in a backseat outfitted with eighteen-direction
adjustable leather seats, foot and head massagers, and a Champagne fridge in the
middle armrest. If those venturing into our custom cigar tent wanted a nicotine
fix, we foisted upon them unlimited $30 Zino Platinum Crowns, a blend of one
Peruvian and three Dominican tobaccos, aged four to five years and wrapped in
a leaf developed at a boutique plantation in Connecticut. We were providing the
kind of full-sensory experience required to distract any attendee from noticing
that we had lightened their wallets by as much as a thousand bucks each.
I was surely in the poorest one percent of those assembled, a guy who drove a
dented ’97 Subaru Outback. But as the CEO and editor-in-chief of Doubledown
Media I had the best seat in the room to view my creation in all its craven glory.
My ringside tablemates included Gerry Cooney, the gregarious former
heavyweight contender whom we’d paid $2,000, cash up front, plus cab fare, to
mingle with the guests, and Emile Griffith, the former middleweight champ best
known for tragically beating Benny “the Kid” Paret to death during a nationally
televised bout in 1962. (Griffith, I discovered, suffers from dementia owing to a
few thousand hits to his head, which made him extremely hard to understand.
That helped explain his meager appearance fee—$200, no cab fare.)
Halfway through the second fight, I pulled myself away from my famous rent-
a-friends and gazed around. The collective wealth and conspicuous consumption
was breathtaking, especially when compared to the scrappy style of our
perpetually underfunded company. This was a world as innately foreign to me as
a gorilla troop in the African plains. But over the past five years, I had gradually
learned the language and the customs, and become, at first, a tolerated observer,
a Jane Goodall with some cool magazines. As our products gained influence, the
financial community slowly accepted me as a trusted insider. And now, as the
markets ascended to unprecedented heights, I found myself, as Wall Street’s
scorekeeper, fueling the make-and-spend machine. I hadn’t created the wealth in
front of me. In order for my company to flourish, however, we needed to
embrace it.
Eating, drinking, and consuming, the Wall Streeters arrayed before me were
doing a fantastic job celebrating their status at the precise apex of our country’s
financial pyramid. But judging from the almost primal noise now shaking the
Hammerstein’s century-old foundations, our guests, in their Armani tuxedos and
Brioni suits, had actually come for something even more innate than the steaks
and vodka. They had come for blood. Preferably, it seemed, blood from the one
group that almost everyone on Wall Street could agree embodied all that was evil
and wrong with the world: the tiny substratum of their peers who made even
more than they did.
“Goldman . . . Sucks!” the crowd thundered in unison. “Goldman . . .
SUCKS!”
Poor Shane Kinahan, I thought, watching him march toward the boxing ring
as the bagpipers he’d personally hired for his entrance futilely tried to drown out
the profanity now raining on him. A vice president at Goldman Sachs, an
institution whose name was now being collectively mocked, Kinahan was guilty
of a mortal Wall Street sin: inspiring jealousy. Once bonuses were doled out a
few months hence, Goldman would pay its thirty thousand employees an average
of $661,000 for 2007, more than any bank on the Street or similarly sized
company in the world. It was a figure that took into account every secretary,
janitor, cafeteria worker, and Town Car driver. Our crowd, of course, did far
better: Kinahan was surely well into seven figures, and some of his colleagues
would nudge past $100 million for the year. Rooting for Goldman Sachs was
thus about as much fun as rooting for Kim Jong-il on Election Day in North
Korea.