The Financial Innovators from Charles Merrill to Michael Milken
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 Informative--if often apologetic and even fawning--attempt by Sobel (Business/Hofstra University; The Life and Times of Dillon, Read, 1991, etc.) to put into ``historical perspective'' the Wall Street shenanigans of Michael Milken. As Sobel sees it, Milken is one of a noble line of post-WW II rugged individualists who fashioned new financial instruments and methods to make themselves and others rich. Precursors include Louis Wolfson--like Milken, ``shy and assertive, loyal and patriotic,'' and a Jewish outsider--who was the first to buy up the stock of technically ``undervalued'' companies, break up the companies, and sell off the pieces at huge profits: In 1967, he was convicted of stock manipulation. Another predecessor, James Ling, a high-school dropout from Oklahoma, devised new ways to raid a corporate treasury to finance hostile takeovers and was able to form early conglomerates in the 1960's, notably LTV. More respectably, Charles Merrill, head of Merrill Lynch in the 1950's, established the first nationwide network of stockbrokers and bond traders--those who later would sell billions of dollars' worth of Milken's high-yield, low-quality corporate junk bonds to S&Ls, insurers, and an unsuspecting public, and who would provide fuel for raiders such as T. Boone Pickens to finance hostile, leveraged takeovers of a size and scope previously unimaginable. As Sobel delineates these deals--which ultimately brought ruin to thousands of S&L depositors, insurance-annuity holders, and employees of dismantled companies--his technical analysis is crystalline, but his sympathies are obviously with Milken, who, he says, has ``a social vision.'' In fact, Sobel builds a not-so-sly and certainly unconvincing case that Milken's prosecution and 40-month sentence were the result of anti-Semitism, even ``demonism'' (Milken's lawyer's term). Sobel hopes that Milken will enjoy a ``second act.'' Many may disagree, but the facts of high finance in the 1980's remain fascinating, even in the author's less-than-neutral hands.

Pub Date: May 21st, 1993
ISBN: 0-471-57734-0
Page count: 256pp
Publisher: Wiley
Review Posted Online:
Kirkus Reviews Issue: April 1st, 1993


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