The Economic Studies Shelf

Gonzo Wall Street
Richard E. Farley
Regan Arts
https://www.reganarts.com
9781682451984, $32.00, HC, 400pp

https://www.amazon.com/Gonzo-Wall-Street-REVOLUTION-Bamboozled/dp/168245198=
4

Synopsis: In the 1960s, the fabric of American society was torn apart by de=
ep divisions over the Vietnam War, violence in our cities, and the senseles=
s assassinations of President John F. Kennedy, Martin Luther King Jr., and = Senator Robert Kennedy. Civil rights, as well as women's and gay liberation=
movements, were challenging America. Music, literature, fashion, and the r= ecreational uses of "substances" were transforming the culture and upending=
conventional morality and manners. The public, the media, and politicians,=
preoccupied with these dramatic changes, paid little attention to Wall Str= eet, where a crisis was brewing that would cause more investment banks to f= ail than during the Great Depression.

The year 1968 should have been the best of times on Wall Street. It was the=
greatest bull market since the Roaring '20s. The Dow was breaking records.=
Trading volume was exploding. A hot IPO market for high-flying technology = companies was defying gravity. And a swashbuckling mergers and acquisitions=
wave was generating enormous profits. Despite how flush Wall Street firms = looked to outsiders, in truth, they were not a thundering herd but one in n= eed of culling.

Hidden from view was the fact that many of the best-known firms on Wall Str= eet were in very precarious financial positions. Rather than investing in d= esperately needed state-of-the-art computer systems, the executives of thes=
e firms overpaid themselves, leaving them over-extended and over-leveraged.=
When business exploded in 1968, they were so overwhelmed by the stacks of = stock certificates piled from floor to ceiling that their antiquated back o= ffices were unable to process them.

The New York Stock Exchange (NYSE), under the oversight of the Securities a=
nd Exchange Commission (SEC), was the principal regulator of the Wall Stree=
t firms at the time. The NYSE still had many of the vestiges of the private=
club it was prior to the Depression-era laws that created the SEC and brou= ght Wall Street under the control of the federal government. The NYSE even = referred to itself as the "Club", controlled by an old guard of firms that = were among the most over- leveraged. Through means legal and likely illegal=
, this old guard kept many insolvent firms open while keeping the SEC and C= ongress in the dark until it was too late. With a systemic financial crisis=
at hand, the boom turned to bust and they went, hat in hand, to Washington=
for a bailout.

"Gonzo Wall Street: Riots, Radicals, Racism, and Revolution: How the Go-Go = Bankers of the 1960s Crashed the Financial System and Bamboozled Washington=
" by Richard E. Farley is the long-hidden history of how the Wall Street in= vestment banks held Congress over a barrel and got a taxpayer-funded guaran= tee of what they owed their customers -- and how little Congress and the SE=
C got from Wall Street in return. More than anything else, this set the pre= cedent for the bailouts of the 2008 Financial Crisis -- and the next Wall S= treet bailouts.

In a story that unfolds throughout the tumultuous 1960s, during the adminis= trations of Kennedy, Johnson, and Nixon, a surprising cast of famous and in= famous characters play roles: Abbie Hoffman, Roy Cohn, Ross Perot, Donald R= egan, Michael Bloomberg, Felix Rohaytn, Sandy Weill, Ken Langone, and many = others.=20

Critique: Enhanced for the reader with the inclusion of a four page Cast of=
Characters, an informative Prologue and Epilogue, twenty-six pages of Note=
s, a two page listing of Acknowledgments, and a nine page Index, "Gonzo Wal=
l Street: Riots, Radicals, Racism, and Revolution: How the Go-Go Bankers of=
the 1960s Crashed the Financial System and Bamboozled Washington" is a sem= inal and informative 20th Century American economic history that is especia= lly and unreservedly recommended for personal, professional, community, and=
academic library collections. Exceptionally well written, organized and pr= esented, "Gonzo wall Street" is also available for students, academia, poli= tical activists, and non- specialist general readers with an interest in th=
e subject in a digital book format (Kindle, $14.99).

Editorial Note: Richard E. Farley is a partner Chair of the Leveraged Finan=
ce Group (New York) and the author of "Wall Street Wars: The Epic Battles w= ith Washington that Created the Modern Financial System". (https://www.kram= erlevin.com/en/people/richard-e.-farley.html?tab=3Dprofile)

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