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addabook - Den of Thieves
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Den of Thieves
James B. Stewart
read on January 1, 2010

A great read covering several insider trading scandals in the mid 80's, during the height of the corporate takeover boom on Wall Street. It gives a lot of interesting color about the backgrounds of key finance power players at the time. Specifically, it covers pretty much the entire lifetimes of Ivan Boesky and Michael Milken.

Boesky was an uneducated nobody that somehow convinced people to let him manage their money, and parlayed that into becoming the foremost arbitrageur on Wall street. Of course, almost all of his great investment calls were simply inside info he got from his circle of informants. Boesky was definitely intelligent, insofar as he had the street smarts and tenacity to bully his way to the top. I mean, what's more impressive, a brilliant arbitrageur- or someone that almost gets away convincing the world they are a brilliant arbitrageur?

Milken on the other hand, seems like a legitimate genius. A powerful combination of book smarts, street smarts, the ability to stay focused, and the complete disregard for anything in his life other than work. The book starts out talking about how Milken worked 10 hour workdays, and that number seems to increase every chapter. By the time he's making $500M per year, he's up to frequent 20 and 22 hour workdays. The typical labor supply curve is always backwards bending, where there is some point at which a person decides they're making enough money and would prefer to spend less time working and more time at leisure. Milken does not fit this mold. He pioneered the junk bond market, and became such a big player that he pretty much controlled the entire market. His decisions and tactics would define the market, which gave him interesting opportunities.

If anything, I wish the book were a bit more technical. It's written very well, but definitely targeted for a mass market, and doesn't try to go over the reader's head. Michael Crichton fans would be very comfortable here- except that this book isn't fiction. I wish it spent more time on technical details- I think more details about Milken's trades and strategies would be interesting- though I'm sure I'll be able to find that elsewhere.

A few other issues as well. First of all, the second half of the book is really slow. All of a sudden you realize you're reading about actual events instead of a fiction Wall Street thriller. I guess that's to be expected, but it's a shame and an effort to sludge through it. At 500+ pages, when the 'second half' is slow, that's saying something. Of course- maybe that's just because I'm far more interested in stocks and bonds than I am in subpoenas and grand juries. The first half is all self made millionaires doing huge deals, the second half is lawyers and lawyers and lawyers.

One more complaint: I'm not sure if it's correct or incorrect, but Stewart's use of commas drove me absolutely crazy. He inserts them inside the names of law firms and investment banks- all of which are named after the six or so founding partners. The entire book he's writing about Goldman, Sachs and Wachtell, Lipton and Drexel, Burnham, Lambert, and almost never (with the exception of Drexel) shortens the names to just the first. It makes many sentences very confusing.. and seriously, can he not just say "Goldman"? It's just very odd to see those firms written out with commas.

Last (and least) of all, I was bummed to finish the book and realize that it was written in 1992. The events in the book wrap up in 1991 or so, so the conclusion doesn't have any of today's perspective- or the fun of a "where are they now" conclusion. I guess that's what wikipedia is for.

Author Bio:

James Bennett Stewart (born c. 1952) is an American lawyer, journalist, and author. Stewart was born in Quincy, Illinois. He graduated from DePauw University and Harvard Law School. He is a member of the Bar of New York, the Bloomberg Professor of Business and Economic Journalism at the Columbia University Graduate School of Journalism, Editor-at-Large of SmartMoney magazine, and author of Tangled Webs: How False Statements are Undermining America: From Martha Stewart to Bernie Madoff (2011). He is a former associate at New York law firm Cravath, Swaine & Moore, which he left in 1979 to become executive editor of The American Lawyer magazine. He later joined The Wall Street Journal, where in 1988 he won the Pulitzer Prize for Explanatory Journalism for his articles about the 1987 dramatic upheaval in the stock market and insider trading. These writings led to the publishing of his best-selling work of non-fiction called Den of Thieves (1991), which recounted the criminal conduct of Wall Street arbitrager Ivan Boesky and junk bond king Michael Milken. Stewart became page one editor of The Wall Street Journal in 1988 and remained at the paper until 1992, when he left to help found SmartMoney. Stewart's book, Blind Eye: The Terrifying Story Of A Doctor Who Got Away With Murder (1999), won the 2000 Edgar Award in the Best Fact Crime category. DisneyWar (2005), his book on Michael Eisner's reign at Disney, won the Gerald Loeb Award for Best Business Book. In 2007, he was ranked 21st on Out magazine's 50 Most Powerful Gay Men and Women in America. He is currently a contributor to The New Yorker and a columnist for The New York Times, which he joined in 2011. Stewart also serves on the board of advisory trustees of his alma mater, DePauw University, and is past president of that board.