On Monday morning we were driving home from holiday, with a car so chock-full that my eleven year old daughter had bet me I couldn’t get everything back in (she lost), when we got to Tirau and saw a sign advertising a book sale – at $1 a book. It was too much for us to resist. Among the hall full of books, I spotted Street Freak: Money and Madness at Lehman Brothers, by one Jared Dillian.
Readers may recall Dillian. He was the US-based commentator who late last year wrote a piece on forbes.com claiming that, with the election of the new government, New Zealand was about to “commit pointless economic suicide”. I wrote about his column here (various other people had a go too). Like others, I was pretty dismissive: perhaps, as Dillian suggested, there will be a recession here in the next few years (but in any three year period that is a non-trivial risk, including for factors quite outside New Zealand’s control). And as for “pointless economic suicide” (I noted)
If there is a “suicide” dimension to economic policy in New Zealand, it is the wilful blindness of successive governments led by both main parties, who keep on doing much the same stuff, and either believe they’ll get a different and better (productivity) result, or who just don’t care much anymore.
I’d never heard of Dillian previously – although on checking around I found that he was a regular markets commentator, and seemed to have people willing to pay for his views – and had given him no attention since. But on Monday I picked up his book anyway, for three reasons:
- it was only $1 and I was just a little curious about the author,
- the jacket suggested it wasn’t just another description of life in the financial markets, but was also a pretty honest and searing account of the author’s struggles with mental illness, and
- the rave review on the back cover from the novelist Siri Hustvedt (“Always vivid, by turns hilarious and sad, this is an electrifying memoir”). It turns out that Hustvedt had spotted Dillian’s writing talent when she was helping with a programme in a psych unit when Dillian was at his lowest.
It is an excellent book. I’m a bit of a sucker for (second hand) histories of American corporate takeovers, I have quite a few books about markets acquired when I shifted into the Reserve Bank Financial Markets Department 20+ years ago, and really big piles of 2008/09 financial crisis books. Dillian’s is unlike any of them. He had – and offers – almost no insights on the failure of Lehmans (though no doubt the name helped him find a publisher a few years after the failure). Dillian was a trader (latterly head trader for exchange traded funds) and knew little more about his employer’s travails – and reckless real estate risks – than anyone could see (evenually) in the share price. He’d developed his newsletter – and found an audience – while still at Lehmans but then much of it was about the esoterica of market liquidity.
But it is simply an extraordinarily vivid book – not sparing the vulgarity, or accounts of his alcohol excesses – tracing Dillian’s desperate, obsessive, desire to make it in the financial markets (as a late entrant – he’d been a US Coast Guard officer – with a part-time MBA from a no-name university. There are the highs and lows, the emotional intensity, of markets let alone of Dillian himself. One is never quite sure how his wife coped with him, even before the mental illnesses came to the fore. As the jacket notes
The extreme highs and lows of the trading floor masked and exacerbated the symptoms of Dillian’s undiagnosed bipolar and obsessive compulsive disorders, leading to a downward spiral that eventually landed him in a psychiatric ward
And that after an earlier suicide attempt, which he survived only because after taking a big dose of pills he – as people sometimes do – made a call, not for help but just to say goodbye. After a family member went through years of serious mental illness I also have a pile of books on mental illness and the experiences of patients and families. I’m tempted to shelve Dillian’s book with those works, even though most people buying it will probably be after the markets stuff. Siri Hustvedt continues her endorsement suggesting that the book is “not only about money and madness, but the madness of money”, but I think that is both simply too cute, and wrong. But it is a powerful account, full of insight, of one man’s experience of both.
What also interested me was Dillian’s career turn. Through much of the book his aspiration is to turn himself into a prop trader successful enough that he could work where he wanted, pretty much on his own terms – his example was a Lehmans prop trader then operating from Florida And when I’d seen he’d previously been at Lehmans I assumed he’d lost his job in the failure, and after a time taken a different path. His was a (much) braver call. After the Lehmans failure, Barclays acquired many of the better bits of the business, and Dillian’s job was safe. And yet he chose to walk anyway, leaving without severance or great wealth (and having lost all the value in his locked-in Lehmans shares) deciding he was going to pursue the vision of writing (and selling) his own newsletter. That took guts in September 2008 as the crisis was heading towards its worst.
The book is well worth reading. The author may, for now, have nothing useful or interesting to say about New Zealand economic policy or performance, but set that to one side. He can certainly write, and it appeared that in his day he could trade and generate trade ideas. The book is searingly honest – at times almost uncomfortably so – and the better for it.
As I say, Dillian can write. I’ve even signed up now for his free weekly newsletter, The 10th Man . He’s a contrarian;
His free weekly newsletter isn’t called The 10th Man for no reason. It’s named after a strategy which states: if nine people agree on a particular action or plan, then the tenth must disagree in order to stir up alternatives to be considered.
Flicking through some of his past issues, I’m not sure I often agree with him (on things I know something about), but he makes one think and writes interestingly. Perhaps one day he’ll even revisit New Zealand and there will be some nugget to think about.