Randall Lane adverises his home page at the back of The Zeroes.
It is http://www.randalllane.com
In February, 2011, this website did not exist.
In the back of the book, there is a charming photograph of Mr Lane. It chops off the top of his head, which is gloriously bald 'in real life'. The irony here is that in his book he 'outs' two celebrities for their anxieties about their hair. Both of them hold up the production of his luxury magazines by wanting approval of photographs of their hair.
Why do I begin with these two anecdotes? For some reason, after reading dozens of books about the financial crisis, maybe it is a nice picture to add to the collection. This book, one of the best books about the crash, has these tattered edges around it. . . a sort of deadpan exposé, the honest detritus of a strange party, it's not screaming from the rooftops.. it didn't even want to spend 50 bucks on a website... the marketing and packaging of this story, which is about a tragedy of marketing and packaging, has cracks at the edges, as though we can see the insides of it.
Maybe I have crisis fatigue. This book is full of startling revelations about greed, ego, excess, fame, and money. It even has a new acronym, the SPAC, which is pretty much exactly like the 'company formed for some money making purpose, yet to be determined' that Edward Chancellor discusses in circa 1600s England, in his book "The Devil Take The Hindmost". At some point, though, you just stop being shocked. Oh my, you say, that person stole millions of dollars from a charity. This other person got rich by ripping off the ignorant. That fellow made a million bucks through blatant fraud. Ho hum. Yawn. Throw it on the pile.
Lane's book is dripping with hedge fund attitude. It is full of bullshit analogies to war and battles. He compares his daughters handwriting to Charles Manson, as a joke. It is the kind of bizarre, over the top joke, that blurs the line between fun and insane. The problem is, by this point in the book, you are so used to being around characters who would be on the 'insane' side, you aren't sure any more which side Lane is on. You may wonder, has he crossed over? Has he lost himself?
He ponders the question throughout the book. He deals repeatedly with liars, cheats, con artists, the violent, the abusive, the vulgar, and the stupid beasts of human nature. A love guru hippie screams at him. One of his own staff stalks him. He holds his nose, telling himself there will be a payoff. It never comes.
How can one compare this book to the other crisis books? There is virtually no technical information. The chronicle of actual historical events is short, taking perhaps 2-3 pages. CDOs and CDS are all lumped together. He seems to imply AIG invented CDS, and he seems to believe the knowledge of Bear Stearns' internal hedge funds death was not revealed until the end of Bear in early 08. These things are, well, in direct conflict with many other books on the topics.
But this is a strong point.
His book is not about the dots or connecting them. It is about the human beings that inhabited those dots. John Paulson is not a mysterious evil genius, he is yet another hedgie who likes all the bullshit luxury items all the other hedgies do. Jim Cramer is, well, just another hustler, doing questionable things and then acting shocked, shocked, when they don't turn out so well.
The portrait of Lenny Dykstra is particularly brutal. Here is where Lane reveals himself. He loathes Dykstra, and yet, he goes on. And on. and on, with their relationship. Does it ever cross his mind to suggest to Dykstra that he get help? Maybe, maybe not. The basic fact is that Lenny represented money, so Lane allowed him to act like he acts. Lane was, in a sense, part of the problem. A self-examining, doubting, part, but still part. Everyone in Dykstra's life was there only for the money.
Which brings me to the topic of prostitution. Lane does not shy away from dropping some names and some numbers here about the recreational activities of the financial folks. Some books, you might hear that Jimmy Cayne did pot in his office (Street Fighters, Kelly). Or you might hear that drugs were popular at Ameriquest (All the Devils are Here, McLean & Nocera). It is an aside, a sentence, a brief mention. That is not what Lane does. Lane takes us, uhm... there. I mean, there. There as in "I don't want to be here" there. "I didn't want to know that" there. "Too Much Information" I think they say. But it is the truth.
Another aspect of truth that Lane brings, that I have rarely, if ever, seen in any of the other crisis books. He discusses suicides. There were, apparently, a lot of suicides in the financial field. The only place I can remember seeing this, besides Lane's book, is in the Oliver Stone movie, Wall Street 2. I didn't know that was based on a real story.
So, many crisis books, have this weird flavor to them. They are full of intrigue, they try to paint pictures of what people are like, or they try to tell the details of the CDOs, or the stories about how doing xyz made pdq a lot of money, etc. It is all wonderfully fascinating, and educational. But somehow I feel like Mr Lane has captured something the others didnt... the grit, the slime, the oily, disgusting film. It was not a fun time, it is not a fun world. Vicky Ward, in Devil's Casino, quotes an author of a book about Lehman in the 80s; he basically says he was glad when his book was finished because he wouldn't have to spend any more time around big shot investment bankers. I will admit; sometimes I feel the same way reading these books. And the more of a 'banker'/'hedgie' the author is, the more I feel that way. Please, I beg you, try to read Andy Kessler's books without your skin crawling. It is like going to a horror movie when you are the type of person who hates horror movies.
After reading Lane's book, here is what I think. The crisis might have been related to CDOs, mortgages, failed regulators, credit swaps, and the rest. But really, really what the crisis was about, was just two things... Sex and violence.
