Randall Lane's The Zeroes: Wall Street's Greediest

The Trader Monthly founder's new book offers a gossipy recollection of a decade when greed ran unchecked—but wonders if it wasn't always thus

By Ian McGugan

Editor's Rating:

The Good: A delicious, salacious recounting of Wall Street's bloated decade that was codenamed The Zeroes from the co-founder of Trader Monthly.

The Bad: Lane's diagnosis of Wall Street's near collapse is too simplified. He suggests that greed is a variable in the markets when others would argue, with good cause, that it is a constant.

The Bottom Line: Look to The Zeroes for great airline or beach reading—not for a history lesson.

Reader Reviews

The Zeroes: My Misadventures in
the Decade Wall Street Went Insane
By Randall Lane
Portfolio, 359 pp, $27.95

Nearly a decade ago, former Forbes bureau chief Randall Lane spotted the beginnings of a new culture devoted to the notion that 26-year-olds with a gift for swapping financial assets could be able to make as much in a few months of trading as an average person makes in a career. Lane launched a series of magazines devoted to glorifying this culture—publications with names like Trader Monthly and Dealmaker—that specialized in stroking the emerging plutocracy of hedge fund managers, traders, and private equity speculators.

Lane believed he would make his own fortune by giving luxury advertisers a forum to reach this small but growing mob of ultrarich arrivistes. Unfortunately he chose a medium that would prove to be a surefire prophylactic against profits. Despite zealously attempting to sell out, Lane couldn't make a buck. When stock markets collapsed in 2008, so did his publishing empire.

At least he got a great story out of it. His new book begins by sticking a snazzy label—the Zeroes—on the decade just past. It then proceeds to trash most of the people that Lane spent the Zeroes glamorizing. If you want to know what hedge fund managers consider "a proper night out" (translation: a $10,000 excursion to an upscale strip club), this is the book for you. Ditto if you're looking for the nasty on John Travolta or Lenny Dykstra, the baseball star-turned-financial-impresario.

As Lane tells the story, he was the guy in the frayed suit, with the dented '97 Subaru Outback, trying to make his way in the world of the superrich, all the while casting a skeptical eye on their rituals of conspicuous consumption. While the Wall Street crowd dined on $175 Kobe beef burgers, Lane chowed down on a tub of Costco (COST) peanut butter. While hedge fund managers dropped tens of millions on gated-and-walled family compounds in Greenwich, Conn., Lane and his wife and two daughters endured a cramped apartment in Manhattan, where the kitchen doubled as the office.

So endless are Lane's assertions of his relative poverty that it's easy to miss that he was just as hungry for money as anyone else. If things had turned out differently, and Lane's publishing endeavors had gushed profits instead of bled red ink, his ethical sensibilities might not have been so offended by the thought of the $1,000 lobster-and-caviar pizza at Nino's Bellissima. Heck, Lane probably would have enjoyed a slice himself.

Perhaps as a result, The Zeroes is marvelously readable, and also misleading. As Lane deplores "the kind of greedfest that comes along only once every thousand years," most readers will be led to conclude that the financial meltdown was the result of an unprecedented outbreak of heretofore unknown avarice on Wall Street.

There are a couple of problems with this simplistic moralizing. The first is that we've heard it too many times before. After every financial crisis, whether it be the junk-bond collapse of the late 1980s, the dot-com bubble of the '90s, or the 2008 financial crash, there are books (often by Michael Lewis) blaming the collapse on Wall Street's uncontrolled lust for money. The purported evidence for this chain of causation goes something like this: Before the economy cratered, financiers were demonstrating unmistakable signs of greed. Ergo, greed caused the crash.

What this glib explanation misses is that greed isn't a variable in the markets—it's a constant. The traders and hedge fund managers that Lane captures so well in his book are a grasping, materialistic lot, devoted to buying flashy watches and expensive rides—and so were their predecessors, going back to when the stock exchange was founded under a buttonwood tree. If you're going to indict this long line of greedy so-and-sos for causing financial crashes, you also have to credit them with all the intervening periods of prosperity. No historian of Wall Street has ever detected an Age of Altruism.

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