Wednesday, June 12, 1996
Tales Told by the Wise, Signifying Something
by Son of Ben

It's refreshing, in these overly serious and neurotic times, to find a book about the financial markets that's not entitled something like How to Retire with Three Zillion Dollars without Doing Anything. Ron Insana's new book, Trader's Tales (New York: John Wiley & Sons, Inc., 1996), is quite appropriately subtitled "A Chronicle of Wall Street Myths, Legends, and Outright Lies." The book eschews the usual patronizing formulae for making bucks in mutual funds and index options and attempts to display the culture of Wall Street, the trade of trading, the flip side (if you will) of the financial coin.

Why should a Fool care? For one thing, Trader's Tales shows the humorous side of high finance and reminds us that even full-service brokers are human beings who sometimes do insanely funny things. For another, the stories recounted by Insana imply that it might be possible to consider the stock market less as a conglomeration of numbers, absolute values, and paradigms than as a hodgepodge of shifting human perceptions. When a trader--Insana calls him a "starving artisan"--can be fired for eating a live cockroach on a $2,500 bet on the floor of the CBOT, you have to wonder, at least somewhere in the back of your mind, about the sheer neatness of rigid academic models of supply, demand, and market efficiency. Or perhaps there are occasions when eating a cockroach is the most efficient way to time the market--a Foolish notion indeed.

If a market of human perceptions lends itself best to a long-range theory of investing, predicated upon the necessary incompleteness of knowledge (rather than upon Conventional Wisdom), it also encourages us to think democratically of the traders, brokers, analysts (especially analysts!), fund managers and bankers as fallible individuals rather than as evil participants in a monolithic and threatening bastion of authority.

The people of Wall Street respond to conflict much as people in any culture do: with courage, tears, laughter, cunning or fear. What happens when Donald Trump decides to put the squeeze on an analyst who specializes in the gaming industry? Somebody has to cave in, of course, and somebody has to be proven right in the end. Insana manages to spin out a whole range of such situations, all based upon a vision of financial types from the novel point of view that they are not machines or ciphers, but people. A key theme, of course, is greed -- but often it's the funny side of greed, rather than the maliciousness that greed engenders.

Given his "insider" status, Insana is one of the best people to have written this book, but for the same reason, he is one of the worst. He has the connections needed to get the stories in the first place, but perhaps because in his role as a commentator on CNBC he has to work on a daily basis with the very people he writes about, he often backs away from giving specifics and naming names. You get the sense that he probably knows some real dirt about Jimmy Rogers, or Elaine Garzarelli or Dan Dorfman, but that what he wants to do is get away with telling a few tales out of school without risking expulsion.

In a way, this is not Insana's fault. A man who works on CNBC is as much implicated in the social matrix of Wall Street as are the people in the stories he tells. A certain inertia in financial culture resists iconoclasm; not the intentional and patronizing disregard for the intelligence of individual investors that the Gardners have been so concerned to point out, but a sort of inevitable inability of the Wise to see themselves without having the act of observation alter the picture.

When it comes to books like Insana's, Heisenberg's uncertainty principle is very much in play. Despite setting out to show the Street from a new point of view, Insana fails, at the last instant, to see the implications of the vision that he himself has created: he never draws any of the larger conclusions.

If you've ever spent any time watching CNBC, you've perhaps heard Ron Insana make witty reference to Gertrude Stein, whose recursive (some might say "maddeningly repetitive") style Insana's own prose occasionally seems to echo:

"Vic Sperando is a trader's trader. He'll trade anything from stocks to bonds to currencies to gold or cotton. Trader Vic has long been known as a hair-trigger type who loves to trade. Vic's an affable fellow who looks a bit like a Brooklyn-born wise guy. He's built like a bulldog, small but powerful. He's a gentle soul, though you can't quite tell that from looking at him. There's also a certain mischievousness in Trader Vic's eyes. One can tell from chatting with him that he knows a lot, some of which he probably could never tell you (7).

Critics generally concede that Gertrude Stein's stylistic oddities are intentional, but it's unfortunately not possible to be so charitable to Ron Insana, since he and his editors falter at times in the area of basic composition skills. This is an author who seems to be capable of writing, with perfect ingenuousness, such sentences as "Since the dawn of time all kinds of history tends to repeat" (197). Even if we leave cliche aside, there's the issue of subject-verb agreement.

At other moments Insana's basic intellectual foundations seem a tad shaky. Discussing the theory that equity prices move in tandem with Super Bowl results, he points out that it's just a coincidence, "quite illustrative of a phenomenon economists like to call 'false cause fallacies'" (204). He then goes on to say that this is "also a graphic illustration of how economists make up million dollar phrases to explain simple events" (204). At least as far back as the middle ages, what Insana is calling a "false cause fallacy" was known to logicians as non causa pro causa, or post hoc ergo propter hoc, and this was long before eloquent economists were even a gleam in the all-seeing and universal eye.

If this seems nit-picking, it's also "quite illustrative," as Insana might say, of the limitations of historical and intellectual vision imposed on the Wise by none other than themselves. Other examples of unwieldy syntax and lame diction might be adduced, but I don't want to bury Insana any more than I want to praise him. Trader's Tales is worth reading, if only for its unconscious implications.

Transmitted: 6/12/96