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The Predators' Ball

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The Predators' Ball

The Inside Story of Drexel Burnham and the Rise of the Junk Bond Raiders

Penguin,

15 min read
10 take-aways
Audio & text

What's inside?

The rise and fall of Michael Milken’s junk bond empire.

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Editorial Rating

7

Qualities

  • Innovative

Recommendation

Today the phrase “securities fraud” evokes Enron, WorldCom and Tyco. Two decades ago, it evoked Drexel Burnham Lambert, the investment bank that ruled the junk-bond realm and helped fund some of the most audacious corporate takeovers of the 1980s. Enthroned at the center of Drexel Burnham was the king of junk, Michael Milken. Was he a financial genius who found ever more clever ways to make markets more efficient? Or was he a swindler running the world’s biggest Ponzi scheme? New Yorker writer Connie Bruck sets out to answer those questions in this cautionary tale of Drexel’s rise and fall. getAbstract recommends this fascinating, highly detailed financial history. However, the flaw in Bruck's narrative is the absence of a third act: She inexplicably ends the book before Milken's trial and sentencing. While its ending is weak, this provocative story makes one thing clear: Uneasy lies the head that wears a leveraged crown.

Summary

The Cheerleader

Michael Milken was always comfortable being a maverick. As a high school student in Van Nuys, California, he wasn’t an athlete. He was a cheerleader. While a student at the University of California at Berkeley during the politically heady 1960s, he “sold out,” majoring in business administration. After graduating from Berkeley, he enrolled at Wharton, where he couldn’t have been more different from the pipe-smoking, blazer-wearing bluebloods that filled his M.B.A. class. After all, Milken was a middle-class Jewish Californian from the “the Valley.” He didn’t smoke, drink or do drugs. Even coffee and carbonated beverages were off limits.

After Wharton, Milken started working on Wall Street as a bond trader. Yet his penchant for being different remained. Rather than live close to the city, Milken commuted from Cherry Hill, New Jersey. Disliking the train because he might run into colleagues who also commuted, the anti-social Milken took the bus. This had another benefit: It gave the data-hungry trader two hours each way to peruse corporate prospectuses and SEC filings without interruption. On cold winter mornings Milken wore an aviator’s cap over his ...

About the Author

Connie Bruck is a staff writer for The New Yorker.


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