Customer Reviews

Blood on the Street: The Sensational Inside Story of How Wall Street Analysts Duped a Generation of Investors

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"Blood on the Street," by the former Wall Street Journal reporter Charles Gasparino is a journalism masterpiece. To this end, the author has firmly established himself as one of the "best & brightest" financial journalists in the nation today. Moreover, "Blood on the Street," is a sure bet to command strong attention for several big-time book awards.

On that note, Gasparino is a tireless investigator. His fascinating narrative tells the story of how Wall Street's most powerful investment banking groups (and senior management) often tailored "New Economy," dot com and telecommunication research to win deals that generated hundreds of millions of dollars in fees.

The sad thing about the unsavory/criminal practice is that hundreds of thousands of small investors suffered massive losses because they considered the research honest. However, the frightening aspect of Gasparino's reporting is that the Federal watchdogs at the Security Exchange Commission did little to protect small investors across the nation.

Gasparino's portrayal of the cast is superb. Jack Grubman, the top telecommunications analyst at Salomon Smith Barney and one of the highest paid executives on Wall Street is arrogant, mean-spirited, shallow and not particularly good looking. Henry Blodget, the Merrill Lynch golden boy from Yale (affectionately known as "King Henry," before the dot com bubble bursts) is a talented communicator but way out of his league when it comes to the earnest work of crunching numbers. And Mary Meeker called the "Queen of the Net," by Barron's is "petite, Midwestern, and famously hardworking" according to Gasparino. Meeker is the best of the lot (by far) but still succumbs to the pressure from investment bankers and becomes a "cheerleader" for big fee clients.

The primary hero of this sensational story is New York State attorney general Eliot Spitzer. He takes on the giant financial institutions and particularly humiliates Sandy Weill, the Citigroup CEO who without a doubt is the most powerful player on Wall Street. Unfortunately, there is no happy ending. Reforms are implemented and some investors manage to win litigation but for the most part "Wall Street analysts gets away with duping a generation of investors." Highly recommended.

Bert Ruiz

Charles Gasperino was the reporter who revealed the corruption and scandals of Wall Street in front-page articles for the "Wall Street Journal". This book tells how Wall Street firms swindled billions during the 1990s. President Clinton's tax increase produced low interest rates that fueled the stock market expansion. But this bubble of New Economy stocks would inevitable burst (p.5). What would falling prices for broadband do to the billions of dollars in bonds (p.7)? The ending of corporate pension plans forced employees into the stock market, where individuals faced unforeseen and unknown risks (p.8). This demand caused prices to rise without any increase in underlying values. The culprits, says the author, was the analysts who pumped out research that justified overvalued stocks (p.8). But this is a cop-out; analysts are employees who do as their told. They're only a pawn in this game (p.10). Were investors "greedy"? That's blaming the victim, and admitting to fraud (misrepresenting the value of the item sold). But crooks can stay out of prison by paying off the politicians and the government they control. NY Attorney General Eliot Spitzer exposed this corrupt process. You should read this book if you plan to invest in the stock market, have an IRA or 401K, or wonder about the plan to invest Social Security monies into the next offerings of Wall Street. The average small investor isn't smart or nimble enough to benefit from advertised offerings.

Chapter 1 warns against listening to stock broker's "research": its just advertising designed to get you to buy a product (p.19). Chapter 2 tells how Internet stocks were measured in "hits" and "clicks", not earnings and share prices (p.30). The 'New Economy' is described in Chapter 3; they sold shares in companies that had no profits in the past year (p.55). Chapter 4 tells how companies like WorldCom paid for favorable reports (p.74). The 1996 Telecommunications Act forced telephone companies to open up to new competitors (p.85). Chapter 5 explains how average people were enticed to buy stocks with their savings (pp.96-97). Brokers peddled stock to small investors to gain sucker money (p.99). Could a dot-com company's headquarters be a post office box (p.105)? Does "get rich quick" investing work (p.112)? Chapter 6 explains what happened when stocks could no longer be pumped up - the price slumped to its real value.

Chapter 7 tells how analysts' true function was to sell deals to investors (p.131). The slow crash of tech stocks was one of the biggest destructions of wealth in the nation's history (p.187). The SEC was snoozing while people were losing (p.190). Upper class brokers stole more than organized crime (p.193)! The 9/11 tragedy distracted America from the various scandals and losses (p.230). Did Spitzer persecute Merrill (p.260)? Was the SEC asleep on the job? The end of the Glass-Steagall Act created massive financial companies that served the rich and powerful (p.266). Page 273 explained how brokerage firms are targeted. A deal was cut for reform (p.283). (Who represented the consumers?) Chapter 13 starts with the 'smoking gun' E-mails of Cutler and Grubman. It involved top executives (p.288). Using the telephone prevents any messages from being preserved (p.298). Will analysts be protected from investment bankers in the future (p.303)? Page 304 suggests an answer.

At the end of this fascinating book, it is apparent that "Blood Flows Two Ways". While millions of investors, most of them of the smaller kind, were battered and bloodied by the chicanery and misdeeds of corporate scoundrels and their complicit Wall Street brethern, in the end many of the bad guys were also bloodied. Indeed, one merely has to look at this week's newspapers to observe the forlorn images of Bernie Ebbers, Scott Sullivan and Denis Kozlowski and see how their turn to hemmorage has arrived. This is why it is certain that Mr. Gasparino's book, "Blood on the Street", has "legs" as some people would say. It will continue to capture the public's attention for some time because people care about these stories since so many of them were financially harmed by the events being discussed.

This is an impressive book for many reasons but perhaps what distinguishes it most is the deep level of "inside tract" insight into the thoughts, deeds and motives of the key participants in this sordid story. It is clear Mr. Gasparino has mastered the utility of the modern world of e-mails and the result is the exposure of so many intimate thoughts and actions. If the author helps to make Mary Meeker, Henry Blodgett, Jack Grubman, and Sandy Weil unpopular in the public eye, he is also sure to make Mr. Grubman's salacious e-mail playmate quite popular in certain male circles.

Mr. Gasparino has a gift for following the trail of each story in the book on a comprehensive, fast pace basis and at the conclusion he has the abilty to pull all of the disparate stories cogently together. I look forward to his future books on the topic of corporate malfeasance because we should all know
something that countless investors who are the victims in this story apparently did not know - this type of greedy and dispicable behavior has happened often in the past and will certainly happen again.

I eagerly awaited this book, as I have been following the Wall Street scandals avidly and was interested in a juicy behind-the-scenes narrative. Frankly I was disappointed. This is a workmanlike account of the Wall Street scandals, but there is an insufficient quantity of new material, particularly if you have been following all the news accounts. Pretty much the only really new stuff was in the Newsweek excerpt.

I did like that he criticized Arthur Levitt for inattentiveness when he was head of the SEC. But there is far too little good analysis and this book really does not deliver on what it promises. It seems to have been written hastily. There are more typographical errors than you would ordinarily expect, as well as little factual errors that are irritating.

For example, he talks on page 215 about Spitzer "indicting" bucket shop brokers. Attorneys general do not "indict." Grand juries indict. Second of all, Spitzer has asked for very few Wall Street indictments and has generally used other enforcement mechanisms.

I would say that if you are looking for a scintillating narrative in the tradition of Barbarians at the Gate, you will be disappointed.

Captures the mania of the late nineties analyst scene in a gripping way. Very much a fly-on-the wall account that gives lots of juicy details of the larger than life characters involved. Would be nice if we can say that we learned our lesson regarding the "irrational exuberance" of that era. But unfortunately, history has a way of repeating itself. Let this book serve as a cautionary tale to us all.

I read the Newsweek excerpt from Gasparino's book and it reminded me how corrupt Wall Street can be, how vulnerable individual investors are and it made me want to go back for more. Gasparino obviously has some keen insights into how the game is played and he takes you behind the scenes at some of Wall Street's most powerful institutions, getting to the heart of what drives relationships and the deceptions of the go-go 90s, including self interest and old fashioned greed. I think it's a must read for anyone who cares about their 401K.

Charles Gasparino's Blood on the Street delves into the horror of the stock market from about 1999-2001, when valuations were getting out of control, as we all remember, and people were losing their minds valuing stocks.

Good things about this book: Gasparino goes into great detail on Mary Meeker, Henry Blodget and Jack Grubman, analysts for Morgan Stanley, Merrill Lynch and Citicorp/group respectively. The details are extensive, and you get a feeling for who these people really are. The seedy underbelly of research is exposed, since at least in Blodget and Grubman's case they did some extremely unfair things with their research. Theoretically wall street research should be objective in nature, but BOTS reveals that most of the research coming out of the big houses around the turn of the century was not only wrong, but it was negligent in that often research was written with the sole goal of enhancing chances of pulling down big bond offerings or other investment banking deals. Eliot Spitzer's early career as AG of NY is featured as well, and it's not really clear if he's a hero or political opportunist. We'll see in the governor's race. Or president's race...

On the bad side, this book seemed to be a bunch of newspaper articles strung together. The editor of this book should be beaten with a wet sock full of rice. Sometimes a paragraph long description of a person or event is repeated almost in its entirety a few pages later, seemingly because the newspaper articles the book lifted from were "seamlessly" transitioned but obviously krufted.

I will never again trust wall street research; not that I really did before. I always thought the buy/hold/sell rankings were a little arbitrary, and this book reinforced how worthless they were. They may be better now, but sitting down with a cup of coffee and an annual report will almost always be superior to whatever a broker or analyst has to tell you. Unless it's me.

I give a weak buy to this book- if you're really interested in the behind-the-scenes dealings of Wall Street in one of its ugliest periods, give it a read. Otherwise, know not to trust analyst research, and spend your time on a better libro.

This is a fine review of the Wall Street shenanigans of the mid to late 1990s, which cost investors dearly. The author focuses on three of the sell-side analysts - Mary Meeker, Henry Blodget, Jack Grubman - whose hype and froth helped bring numerous companies public. This generated millions in investment banking fees for Wall Street's biggest banks... with a cut set aside for the analysts. But once the immense fraud was uncovered, no matter the personal or corporate fines levied, these analysts and their firms emerged far richer than before. Only the investors they purported to serve were worse off.

If you're looking for a point of action to take away from this exciting read, it's this - be wary of sell-side analysts. No amount of fines, regulation or oversight will cut away at the essense of the sell-side: generate investment banking fees by hyping stocks. You'll be far better served if you look elsewhere for your stock & bond analysis.

Yawn to those reviewers who appear to have an ax to grind with the author of this book. Judging by their writing styles, they sound more like insiders than the "average citizens" who commonly post to this website.

As an average citizen (and proud of it, by the way), I enjoyed the story being told. The book read like a novel, and for me that's a plus. Who needs jargon or technical mumbo-jumbo when all we are really talking about are greed and corruption?

I recommend this book to all who, like me, want to be informed and entertained....and not be condescended to.

Focus on the story, which is both compelling and scary; not to mention probably very TRUE.

I hate to sound like a cynic, but this book contains nothing new.

It is a tale of research analysts, devoid of ethical standards; driven by greedy investment bankers - I know phrase is redundant -; commanded by serial-acquiring megalomaniacs; regulated by people who would not recognize a fraud if they stepped in it; and tripped up by a publicity-seeking politician with an eye on higher office.

The latest chapter took place during the booming 1990s. Along the way millions of individual investors made and lost billions as they were skewered in the intoxicating tale. Gasparino, to his credit, tells the tale well. His research and interviews, largely compiled while a Wall Street Journal reporter assigned to the story, bring fresh insights to this age-old tale of greed, arrogance and street-business-as-usual.

His access to dispositions, e-mail exchanges and documents help the reader capture the out-of-control personalities of the characters involved in this tale.

If you invest with the idea that your broker is your best friend, you need to read this book. Greed is Wall Street's only constant and the markets and brokerage firms are there only to take your money away.

If that is cynicism, so be it. I paid for it at bloodlettings long before the Internet boom and bust.