The Street

The Street

by Lee Gruenfeld

Hardcover(1 ED)

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Product Details

ISBN-13: 9780385501507
Publisher: Doubleday Publishing
Publication date: 03/20/2001
Edition description: 1 ED
Pages: 416
Product dimensions: 6.57(w) x 9.55(h) x 1.28(d)

About the Author

Lee Gruenfeld, author of Irreparable Harm, All Fall Down, The Halls of Justice, and The Expert, is a former management consulting partner at the "Big Five" professional services firm of Deloitte & Touche and is a nationally recognized authority on advanced information technology. He and his wife, Ironman triathlete and former computer executive Cherie Gruenfeld, live in southern California. Neither of them owns a single share of stock.

Read an Excerpt

April 1

James Vincent Hanley hated his job and therefore his life.

That combination was not terribly unusual, especially in the financial
world, where what you did for a living could easily account for half your
waking hours and the aftereffects could pretty much wreck the other half.

Hanley worked in the institutional sales division of Schumann-Dallis, a
powerhouse nicknamed “The Virgin” because the address of its monolithic
black building was Three Maiden Lane in the Wall Street district of
Manhattan. Hanley’s specialty was moving great gobs of money around
whenever a hi-tech company was involved in an IPO, an initial public
offering, the process by which a corporation that was privately owned sold
itself to the public at large.

Back in the good old days, companies went public in order to raise enough
money to expand. In exchange for giving up exclusive control, the private
owners sold off minority ownership in the form of stock and used the
proceeds to buy more steamships or build new factories or acquire other
companies in the interest of empire building. In order to do that,
investors traditionally insisted on seeing five years of audited
financials and at least three years of consistent profitability.

But things had changed. Companies were going public primarily so their
owners could cash in—or out, as was increasingly the case. And whereas the
old-line industrialists steeled themselves to reluctantly cede ownership
in companies they’d struggled to build up over decades, today’s brand of
entrepreneur gleefully jumped into the IPO fray sothey could reap
billions out of companies that sometimes hadn’t even had a full year in

Nowhere was this practice more rampant than in the Internet arena. One
company, an “incubator” called IdeaConnexion and run by CEO Burton
Staller, was in business strictly to start up new Internet-based companies
and then sell them off within twelve months.

James Vincent Hanley, who’d been involved in three of Staller’s deals,
spent his days gritting his teeth as he allocated blocks of shares in
Internet start-ups, creating instant paper billionaires as he himself was
forced to scrape by on subsistence wages of barely $300,000 a year.

On this April Fool’s Day, Hanley was in a particularly foul mood. One of
the phone reps in the department had run a gag ad in the Wall Street
Journal announcing an IPO for a new company whose purported objective was
to allow people to auction off their organs to patients awaiting donors.
An hour ago they had all been having a good laugh, but since then Hanley’s
multiline phone had been jammed by calls from clients wanting to invest
because the sham company was called and would be operating
on-line. Hardly any of them even asked questions about the new venture.
Some just wanted wire instructions for transferring funds. The phony ad
hadn’t even listed Schumann-Dallis as an underwriter, and people were
practically breaking down the doors to dump money into it. One client
called from a cell phone, and Hanley could hear him battling with two
flight attendants who were trying to grab the phone away because they were
still on departure from JFK.

Right now, every light on Hanley’s phone console was blinking. His buddies
were routing calls his way because Hanley was considered a chameleon with
a gift for articulation that allowed him to instantly snap into whatever
verbal mode the immediate situation required. He could spout utterly
nonsensical but high-sounding business jargon in one breath, then turn
around and banter in Brooklynese with a hot dog vendor in the next. The
one thing he couldn’t do very well was hide the intelligence and street
smarts that made it all possible.

With no way to stop the ridiculous calls, he reached down below his desk
and yanked the thick phone wire out of the wall, indelicately failing to
release the little plastic retainer pin first and thereby taking some
plaster with it, then sat and morosely contemplated the madness.

Geeks with half his brains were driving Ferraris to chic little food
stores in Palo Alto to buy $1,500 bottles of balsamic vinegar. High school
dropouts had their own fleets of Gulfstreams. One guy he knew, a
run-of-the-mill programmer, had been having trouble getting phone
connections to his parents in Vietnam, so the last time he’d gotten
through, he’d just left the phone off the hook. The line had remained
open, continuously racking up international long distance charges, for the
last four months.

An industry segment that was barely identifiable at the start of the last
decade was now driving the entire market. Companies that hadn’t even
existed a year ago, and which had laughably puny sales and frightening net
losses, would go on the market at $10 a share and hit $100 by lunchtime,
sometimes ending up capitalized at values several times those of venerable
giants that had been founded a century before. Even a serious downturn in
tech stocks, which should have served as a frightening warning to return
some sanity to the market, backfired utterly: As the segment slowly and
steadily recovered, speculators took it as a sure sign that this market
was invincible and could rebound from anything, and they dove back in with
renewed vigor. Investors never even read
the required SEC filings; they just held out their checkbooks and asked
the maximum amount they could buy. Announce a delay of one month in the
shipping date of a new chip and the market’s net valuation could drop by
half a trillion dollars in a matter of hours.

Unthinkably large sums of money were being dumped into houses of cards
whose foundations were not only perilously shaky but sometimes almost
impossible even to define. It was vastly more out of control than the
dizzying margin spiral prior to the horrific crash of 1929 that preceded a
worldwide plunge into a decade of desolation, but what was really pissing
off James Vincent Hanley was the fact that he was sitting in front of a
(now defunct) phone in a windowless room on Maiden Lane in south Manhattan
working his ass off eighty hours a week to funnel those truckloads of
money into everybody’s hands but his own.

Miserable and dejected, he half-listened as the broker in the next cubicle
conducted an impatient, clipped conversation with a client.

“How the {expletive} should I know what they do, Harold. . . . What am I, a
Caltech professor? It’s an Internet start-up and I got eighteen more calls
backed up here from people with their checkbooks out, so if all you’re
gonna do is ask me a lotta . . . okay . . . okaaaay, now you’re talking!
So how much . . . No, no, forget it. I said forget it! The max
is a hundred thousand and . . . because those’re the goddamned
rules, that’s why, you want me to lose my job? Now, you want in, or
what? What? No, your wife can’t also go in for a hundred thou. . . .
Harold, your wife’s been dead for two years! Harold . . . I’m hanging
up, Harold! You hear me, I’m hanging up! Okay, that’s better. I’m faxing
you the wire instructions. The money’s gotta be here in an hour or . . .”

Hanley stood up and looked into the cubicle on his left. Tony Favuzzo,
headset stuck in his ears, punched a button on his phone, listened for
less than two seconds, then rolled his eyes up at Hanley and dropped his
head back wearily. “It was a joke, Mr. Thornton.” He squeezed the mute
button and said to Hanley wearily, “Another hour of this and I’m gonna
auction my freakin’ soul on-line.” He let go of the
button. “An April Fool’s gag. Uh-huh. Yes, I’m sure it’s actually a
pretty good idea but . . . No, as far as I know, nobody’s registered on the Internet yet. No, I have no idea how to . . .
Certainly, Schumann-Dallis would be glad to handle the underwriting if you
decide to . . .”

Hanley looked around. Cubicles stretched in all directions. The din of a
hundred conversations floated upward, and all around the room drifted the
unmistakable odor of money. Boatloads of it, moving from port to port and
traveling so swiftly it left barely a trace in those places where it had
set down momentarily before floating off again. Once there had been
factories, railroads, oil wells, and real estate to denote where money,
like a wolf urinating on a tree, had marked its territory. Great
buildings, vast complexes, mighty steamships, even entire cities gave
substance to the power of the dollars that had built them.

Now? Whoopie!.com, which consisted of barely more than a few dozen desktop
computers and as many employees, was worth more on paper than Sears. Twice
as much, if truth be told.

Hanley looked back at his own desk, his computer terminal, his phone, and
the bits of plaster littering the space below his chair. The word “broker”
came from the French brocour, one who “broaches” a barrel of wine and
sells it off by the glass or bottle, and he wished he were in that
business right now so he could guzzle his whole supply by himself.

“Mr. Hanley!”

He recognized the nasal voice even before he turned around. It was the
president of one of the start-up companies Schumann-Dallis was handling.
In existence for only eight months, it was about to go public.

“Arnold!” Hanley called back with unfelt amiability. He quickly reached
for a book sitting on his shelf—a leather-bound copy of A Financial
History of New York, one of several thousand Schumann-Dallis had given to
all its employees the Christmas before—flipped it open
and turned it upside down over the plaster mess on his carpet before
turning and walking rapidly to make sure the new client didn’t notice
anything amiss.

“We’re taking Mr. Plotkin on a little tour of the department, Jim,” the
senior account executive escorting the client said.

“That’s nice.” Hanley shook hands with the imminent billionaire. “Listen,
let me take him around, okay?”

“You sure, Jim?”

“No problem. C’mon, Arnold.”

As they left the account exec, Hanley said, “Arnold, you mind if I ask you

“Sure, Mr. Hanley.” The worldly unwise Plotkin still hadn’t figured out
that a corporate CEO and major client of the firm didn’t need to address a
salesman as ‘Mister.’ “What do you want to know?”

Hanley ran his hand through his hair. He was six feet tall, or at least he
had been before he’d started this job. Now he felt like he’d shrunk an
inch or two, whether from terminal ennui or a slightly stooped and beaten
posture he couldn’t tell. His thick, sandy hair, once a source of
considerable pride, had become a nuisance of late, and he’d taken to
letting it grow far too long before he cut it far too short, the better to
stretch out the intervals between time-wasting haircuts. He’d even given
up his participation in the compulsory young-Wall-Street-hotshots fashion
competition, the stress of correctly anticipating the trends having
overwhelmed the fleeting satisfaction of senseless victories. Only the
overpriced haberdashers in lower Manhattan were winning that ongoing war,
and he’d grown tired of subsidizing their prize money.

Now that he had the soon-to-be-legendary Arnold Plotkin all to himself for
a few minutes, Hanley wasn’t exactly sure what it was he wanted to know.
“Look, I, uh, I’m not much of a technical whiz, see?”

“Yeah.” Plotkin pushed his thick glasses higher on his face, grimacing and
revealing badly neglected teeth in the process. He rubbed his nose and
stepped nervously from one foot to the other. Here was a man—a kid,
really—clearly more comfortable talking to his laptop than to people.
“That’s okay. Most people, they’re not so smart in computers.”

“Right. Okay, what you do, what your software does, it helps people find
what they want on the Web, right?”


“But there are all these search engines already. Dozens of them. I use
them myself, and they’re very good, so what is it your stuff does that’s
so different?”

“Jeez, Mr. Hanley,” Plotkin said, scratching at the rear end of his worn
corduroys. “You’re gonna be part of the IPO team. Didn’t you even look at
our stuff?”

“What for?”

Plotkin blinked at Hanley a few times, realizing he’d been asked a good
question. “Okay. Well, what happens is, sometimes a user enters some
search parameters, and they don’t say exactly what he thought they said.”

“Like . . . ?”

“Like . . . okay, okay . . .” Plotkin bent forward and shook his hands,
not unlike a first-grader called on to answer a question in class and
struggling to find the right words. “Let’s say you’re writing a paper for
school and you want to find out something about the planet Saturn, okay?
Like maybe, I don’t know, how big it is, okay?”


"Okay. So you go to a search engine and you enter in Saturn and size,
and what it does, it comes back and it's got like five hundred sites and
you click one and it says Saturn has a wheelbase of fourteen feet! Get
it? You see what happened? It thought you meant the car, see? It
thought you meant the car and it gave you the size of the wheelbase!"
Plotkin giggled, sort of a cross between a snort and a death rattle, and
pushed at his glasses again. Hanley nodded, and tried to force a smile
of his own.

Customer Reviews

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The Street 5 out of 5 based on 0 ratings. 16 reviews.
Anonymous More than 1 year ago
This book tells the story of how a company, based only on hype, can become a huge success. It is written with intelligence and savvy. I learned a lot about wallstreet that would stand me in good stead today. The story is interesting, well developed and believable. This could be the most intelligent book I have read this year. You will come away with an education.
Guest More than 1 year ago
Highly recommended - very exciting and relevant
Guest More than 1 year ago
I've been in the market for 20 years but not until now did I realize what a con game and a swindle the brokerage industry is, the worst part being that hardly anybody in that business even realizes themselves how deceptive their practices are. The Street deserves to become a classic in the pantheon of literature that exposes the dark underbelly of something we as a society formerly took for granted. It's a book that every thinking adult in America should read, and if you don't, whatever happens to you and your hard-earned money is your own fault.
Guest More than 1 year ago
Strong recommendation. Much in common with other books by this author, including very skilled writing and tremendous intelligence. He always makes you think, by making his books so entertaining you can't help but get absorbed in whatever he has to say. My only negative is that he never repeats characters from book to book, and I would like to meet some of these people again, for example Jubal Thurgren from this book. That's a character worth expanding on.
Guest More than 1 year ago
If I'd had this book available when I was getting my MBA and interning on Wall Street, a lot of things I perceived as inconsistent or illogical would have been a lot clearer, and I would have felt less confused. Come to think of it, I probably would have gone into a different field altogether rather than investments, where I'm now stuck. It wouldn't surprise me if, a hundred years from now, we look back at stock hustlers the way we now look back at turn of the century snake oil salesman, namely, conscience-less swindlers worthy only of contempt. And if that happens, this book will be cited as one of the reasons why. A lot of people got hosed in the dot-com madness, and even though it's hard to feel sorry for people who were looking to make a quick buck without lifting a finger, the prevailing cultural ethos said it was alright for them to do so. That needs to stop. People need to read this book. That it's a hugely entertaining read is beside the point, except insofar as it will induce people to pick it up and to recommend it to friends and colleagues. The Street is one of those rarities, a guaranteed wothwhile investment of your time and attention. DO NOT let the opportunity pass you buy (pun intended)!
Guest More than 1 year ago
Not to be missed. A very suspenseful thriller on its own, but also containing many important and relevant insights.
Guest More than 1 year ago
What a cliche to say 'you can't put it down.' I couldn't put it down. I'm an old fan of this author's and he doesn't disappoint, once again daring to radically change subject areas, unlike some of his cookie-cutter fellow writers, and infusing his book with tremendous intelligence. Clearly comfortable in the nether reaches of complex finance, he spins a tale of intrigue, dizzying amounts of money, and ordinary human emotion. THE STREET reminded me of why I love to read, and makes a good case for why popular fiction need not be mindless. Highly recommended.
Guest More than 1 year ago
Highly recommended if you don't mind concentrating while you read. I've read two other books by Grunfeld, and they are absolutely terrific, but not the kind you skim through quickly. Makes you think, for sure.
Guest More than 1 year ago
Fine read all around. Very involving story and intriguing characters, and highly relevant to what's happening today, and a warning worth listening to. Ranks right up there with the best of this author's previous works.
Guest More than 1 year ago
As with all Gruenfeld novels, you learn something while having a good time. THE STREET is an important and timely warning shot fired over the bow of the good ship Wall Street.
Guest More than 1 year ago
I am staying anonymous because I work for a Wall Street brokerage house and it's been 'suggested' around here that we not buy this book and do what we can to discredit it. I read it anyway and now I can see why. It contains many important truths that I don't think the brokerage industry wants people to know about. It was fun to read, too.
Guest More than 1 year ago
A great read, and thought-provoking. Lots of suspense and thrills and some very funny/satirical passages as well. An all-around winner.
Guest More than 1 year ago
Everything you could possibly want in a novel: suspense, intrigue, a healthy dose of humor and a cast of fascinating characters. Some of the financial stuff was new to me but the explanations are so good and so effortless you don't even realize how much your learning. Very high recommendation.
Guest More than 1 year ago
Any who likes great writing and has ever given even a thought to investing should read this book. It's a powerful (and painful) object lesson in the 'New Economy' in addition to being a rock 'em, sock 'em thriller
Guest More than 1 year ago

This is a brilliant piece of writing that manages to be very suspenseful yet relieves the tension with well-placed humorous passages. The cynicism is completely harmonious with the overall theme of the book. On top of that, Grunfeld exposes some deeply penetrating truths about the reality of the capital markets. I love books that are multi-layered like this one, and although it requires more 'mental investment' than your standard best-seller, it's more than worth the effort. HIGHLY recommended.

harstan More than 1 year ago
Working at Schumann-Dallas in Wall St., James Vincent Hanley hates his job. He resents turning idiots with a .com mind and nothing else into billionaires while he earns $300,000 a year for the service.

At the end of his patience with THE STREET, and having learned the ins and outs of the Internet economy, James decides it is time for him to launch his own company. He starts up Artemis-5, but cloaks it in mystery. No one knows anything about the company. Still TV gurus pick up the rumors and glorify Artemis-5 as a sure winner that has monster funding from super heavyweights and an incredible break through technology that will turn the industry upside down.

This leads to the SEC becoming interested and wondering what the heck is going on. SEC Assistant Director of Enforcement Jubal Thurgen believes that Hanley has pulled off the greatest swindle in THE STREET¿s history. He investigates the new overnight giant, but Hanley expects him. As they play cat and mouse, the game turns personal.

THE STREET is an exciting satirical look at recent Wall St. and related industry practices in which poor profit records and limited value mean a company sells for hundreds of dollars a share if it is a .com firm. The story line is exciting with two fabulous fighters behaving like Kimble and Gerard meeting in the financial district and a support cast that adds to the irony of a strong tale. Unlike his novel, which is filled with substance worth the value of the price, Lee Gruenfeld writes a thriller that unequivocally believes that value means little on Wall St. while rumors without substance denote everything. .

Harriet Klausner