Thursday, December 24, 2009

Traders v. Bankers

Naifs wh are still trying to get their mind round the idea of bank as a place where people frantically buy and sell stuff might do well to see if they can scare up a copy of Ken Auletta's Greed and Glory on Wall Street: The Fall of the House of Lehman (1986) in which he chronicles the titanic face-off between Pete Peterson --the "banker"--and Lew Glucksman--the "trader". Glucksman is the loud-mouthed dirt-under-the-fingernails fat boy who succeeds in facing down the urbane and polished Peterson because (a) he was tougher and meaner and scrappier than Peterson and (b) his trading operation made so damn much money.

The comparison isn't perfect. For all his apparent polish, Peterson's background was every bit as modest as Glucksman's--Peterson's father (born Petropolous) had been a dishwasher in the caboose of a freight train. As Auletta stresses, he wasn't a lot of things--wasn't an aristo, wasn't an old-line German Jew, wasn't married got a Mellon, wasn't a polo player. Heck, he wasn't even an investment banker, but he had made himself a bit of money, and had very much learned to hobnob with the high and mighty.

Glucksman (who died in 2006) fit more closely to type. But while Peterson made it his life work to annex himself to the establishment, Glucksman (in Auletta's apt metaphor) "had spent a lifetime accumulating resentments." Everything about the two men--personal style, the structure of their businesses, the indices of personal achievement--were bound to set them against one another.

Plenty has happened to Wall Street banking since 1986 and I suppose the telegraph message is "the traders won." But in winning, they didn't so much demolish as assimiltee their opposites: an investment banker might well say "we are all traders now," and he'd have the likes of Lew Glucksman to thank for it.

[Editor's note: Buce, this is too facile. In fact, the tension between "banking" and trading has been there since the dawn of time. Recall that the original Lehman brothers cut their teeth as traders--specifically in the cotton market. They became a "house of issue"--love that old Wall Street phrase--only after a generation of scratch and claw. Other Wall Street houses, too, show this same uneasy tension between trading and "issueing." Go back to the drawing board and try to find the larger theme.--Right, chief, I'm on it, but for the moment let's go with what I have.]

1 comment:

New York Crank said...

I knew Lew Glucksman and although I liked him for his forthrightness in the midst of new money phonies putting on airs, he was about the most vulgar human being one is ever likely to encounter. (Which may explain his forthrightness.)

My former inlaws were friends of his on the Jersey shore. We went out to dinner with Lew and his then-wife Inez on occasion. Lew was not above, in the midst of a conversation, pushing away this dishes in front of him with the remark that "This conversation bores me," putting his head down on the dinner table and going to sleep. He snored loudly.

Some years ago, he dumped his wife for a younger model. She is/was a professional Irishwoman and got him to endow an Irish institute at New York University. Now, at the foot of Fifth Avenue, in an old town house, there is the "Lew and Loretta Glucksman Ireland House!"

What a country! Only in America could a poor Jewish boy from the Upper West Side grow up to be a rich Irishman from Greenwich Village.

I'm off with the beautiful girlfriend in a few hours to Mexico, where only a poor mestizo boy from Guadlahara can grow up to be a rich, bloodthirsty drug lord. See you in January.

Yours Crankily,
The New York Crank