February 25, 2021

Off the Shelf: In ‘Buy Side,’ a Wall Street Trader’s Crash Landing

But I suspect that things might have turned out almost as badly as they did for Turney Duff, a callow, young hedge fund trader who writes of his own noteworthy flameout in a bracing new Wall Street memoir called “The Buy Side” (Crown, 320 pages).

Mr. Duff’s tale calls to mind books like “Bright Lights, Big City,” by Jay McInerney, and especially “Liar’s Poker,” by Michael Lewis — stories of wide-eyed newcomers confronted by the temptations of moneyed New York. As literature, it doesn’t rise to the same class. As spectacle, it easily trumps both.

Mr. Duff makes millions, pays brand-name rappers to perform at his birthday party and marries a glamorous singer. But instead of riding into the sunset, he ends up retreating to sumptuous hotel suites where he inhales piles of cocaine, swills Scotch and watches pornographic movies. By himself.

Along the way, by his own admission, Mr. Duff becomes a caricature of the arrogant young Wall Streeter that so much of America loves to hate. If “The Buy Side” is remembered for any single line, it will be the remark that Mr. Duff says he uttered one evening upon confronting a lengthy queue outside a downtown Manhattan nightclub. Barging past the bouncers, he announces: “I don’t stand in lines. I snort them.” He and his trading pals think the joke so hilarious that they later emblazon it on souvenir T-shirts.

A middle-class kid from Maine, Mr. Duff began his career in 1994, in the early years of the hedge fund era, when he arrived in New York as a fresh-faced journalism graduate from Ohio University. Unable to land a job in writing or anything else, he reaches out to an uncle on Wall Street, who arranges interviews with several of the big firms. Mr. Duff aces the one at Morgan Stanley by recapping the previous evening’s episode of “Melrose Place,” the interviewer’s favorite television show. Hey, so much for that diploma.

One of the book’s strengths is Mr. Duff’s self-awareness. He realizes what he became. At Morgan, where he spent five years as a desk assistant, he knew little about Wall Street and learned even less about investing, acknowledging that he was too lazy to read research. Where he thrived was after the closing bell, when he proved adept at staging office parties and leading his peers — and a few higher-ups — through the assorted watering holes he frequented.

His light-bulb moment comes one evening when he successfully introduces a group of pretty girls to a senior trader. “I realize I’m in my element,” he writes. “I feel in total control and at ease. Only in looking back can I see how seminal this moment is. I would never be able to stand out at my job. There I’m out-experienced, out-connected and out-degreed. But here, with a glass in hand, I have as good a chance as any to move and shake.”

Mr. Duff puts his social skills to good use when, unable to secure an actual trading job at Morgan, he moves to an up-and-coming hedge fund, the Galleon Group — the same Galleon Group that was eviscerated in Wall Street’s continuing insider-trading scandals.

As a “buy side” trader executing transactions for senior portfolio managers, he is a conduit to the “sell side” traders at the big Wall Street firms who actually carry out his trades. Mr. Duff’s decisions on how and where to allocate his trades make him of crucial importance to the sell-side traders, who earn commissions on them.

It is Mr. Duff’s portrait of how sell-side traders ardently romance their buy-side counterparts that is probably the book’s most memorable contribution to Wall Street literature. He takes everything they offer: booze, dinners, Super Bowl tickets, private jets to Las Vegas weekends, parties in South Beach, lots of cocaine and, while at Galleon, scads of tips that move stocks. One of his mentors, a trader named David Slaine, ended up cooperating with the government’s Galleon investigation, but the scandal proves peripheral to the book.

WHAT stays with you is the portrait of a young man who seemingly never met a temptation he could deny.

For a time, Mr. Duff rides high, earning million-dollar bonus checks, renting a TriBeCa triplex with drop-dead Hudson River views and eventually adding a wife, a Long Island manse and a beloved daughter. But the drugs soon take hold, and his long downward spiral grows uglier at every turn. After two stays in rehabilitation facilities, he loses the trading job he took after leaving Galleon, then his marriage and the real estate. The financial crisis does the rest, and today, Mr. Duff says, he tries to make a living writing from a tiny apartment in Long Island City, Queens.

Mr. Duff proves a fine wordsmith; his prose is smooth, lean and rhythmic. Where the book misfires — badly — is when he tries to plumb the existential side of things, or to employ literary artifice. There is one cringe-worthy chapter about his girlfriend (who would become his wife), where he begins every few paragraphs with a letter, “I,” then “I L,” and so on, which of course ends up spelling out “I LOVE YOU.” It made me want to throw the book across the room.

Almost as bad is his “Bud Fox” moment, the obligatory episode in these lost-in-Manhattan memoirs when the protagonist must replicate that memorable scene from Wall Street when Charlie Sheen, having sacrificed himself to Gordon Gekko and the gods of capitalism, stares out at the Manhattan skyline and asks, plaintively, “Who am I?”

Mr. Duff’s moment comes the morning after his 34th birthday party, when he wakes on the roof deck of his triplex, fires up a marijuana cigarette and realizes how hollow all his newfound wealth and party-hardy friends make him feel. “Why,” he wonders, “do I feel so empty?” My bet was all that cocaine; whatever the reason, I didn’t much care. I just wanted to smack the guy.

That said, this is an entertaining and cautionary tale, well worth your time. I can imagine parents out there who might give it to children pondering Wall Street careers. Of course, should it excite rather than frighten your budding Bud Fox, you might consider urging an alternative career path.

Article source: http://www.nytimes.com/2013/06/02/business/in-buy-side-a-wall-street-traders-crash-landing.html?partner=rss&emc=rss

Google’s Digital Music Service Falls Short of Ambition

But the service that the company unveiled on Tuesday, called Music Beta by Google, fell short of those ambitions. There is no store, the streaming function comes with restrictions, and, like Amazon’s Cloud Drive service announced in March, using it requires a long upload process.

What came between Google and its ambitions was an obstacle familiar to many digital music start-ups: despite months of negotiations, the company could not obtain licenses from the major record companies.

In interviews, Google executives put the blame squarely on the labels. “Generally there were demands on the business side that we think were unreasonable and don’t enable us to have a sustainable, scalable music business,” said Zahavah Levine, director of content partnerships for Google’s Android unit and the lead negotiator with the labels.

Music Beta was introduced on Tuesday at Google I/O, a developers’ conference in San Francisco.

Neither Google nor the labels would specify which points they stumbled over. But their disagreement follows a long pattern of friction in which the labels demand high prices for licenses or withhold the licenses altogether. The stubbornness of the labels has earned them a particular caricature in Silicon Valley: the bridge troll, demanding payment for passage.

“They tend to not look at these things as opportunities, but as someone taking advantage of their business,” said Fred Goldring, a former top music lawyer who invests in media and technology companies. “Until they figure out how they’re going to deal new technology on their terms, they don’t make a move. And when they finally do, it’s usually too late.”

The labels believe they are protecting their content and maximizing income for themselves and their artists. But as technology companies and industry analysts see it, the labels’ conservatism in striking deals that involve their licenses hinders technological development and ultimately harms the marketplace by reducing consumer choice.

“The history of the digital music marketplace is littered with the ramifications of record label conservatism,” said Mark Mulligan, an analyst at Forrester Research.

Music Beta, which Google is offering by invitation only while in its trial state, will allow users to store 20,000 songs at no charge and stream them to Android phones, tablets and other devices. As with Amazon’s Cloud Drive, the company does not need special licenses as long as it stores each user’s files separately and then streams them back only to that user, intellectual property lawyers say.

But to sell music, or to operate a master jukebox of every available song and then matching users’ collections to it — widely viewed as the most efficient form of cloud music — Google would need licenses from the labels. Google’s plans were described by many record label executives who have been in discussions with them but spoke on condition of anonymity because their talks were private.

Google and Amazon have not been the only companies negotiating with the labels for cloud music services. Apple is preparing its own, and Spotify, a popular European subscription service, has been locked in talks for two years over American distribution rights. In most of these cases the disagreements are over lump upfront payments or concerns that a service that charges users too little could cannibalize other sales and devalue music overall, executives say.

Ted Cohen, a consultant and former major-label executive, said that when both sides of such negotiations have bad faith, customers suffer. “Neither side is playing fair with the other,” he said. “They go into the negotiations believing that the other side of dishonorable. It’s rare that both sides see that the common goal is to create a consumer experience that people value and are willing to pay for. Things don’t come to market because of this.”

But whether Google and Amazon have abandoned their bigger plans or were just scaling them back temporarily was unclear. In an interview, Ms. Levine denied that the abrupt introduction of Music Beta was a negotiating tactic. But music executives said that since Amazon introduced Cloud Drive — with almost no advance notice to the labels — it has been in discussions over licenses, and these executives, speaking anonymously, said they expected Google to eventually return to the negotiating table.

A more robust digital music service would attract more users to Google. But Mr. Goldring said that it was the labels that really needed to strike a deal.

“At the end of the day they’re clearly hurting themselves,” he said, “because they’re leaving money on the table.”

Claire Cain Miller contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=6272107714959cf07e0bd6b5984cd2ac