A Faustian Bargain On Wall Street


My Year in the Madness at Merrill Lynch

By Paul Stiles

Times Business 323pp $25

Sitting in a bar in Princeton, N.J., recently, I overheard a conversation between a young college couple perched nearby. "Goldman Sachs, that's where I want to work," said one, the other nodding in excited agreement. If they only understood what they were wishing for, I thought. Having covered Wall Street for more than a decade, I have often encountered this bright-eyed eagerness among the young. Few understand the price they might have to pay to work at any of the firms in capitalism's engine room: I have seen many of them chewed up and spit out in a heartless and inhumane way. The big money often means big bruises--more, I think, than in other white-collar industries.

That, in a nutshell, is the message of Riding the Bull: My Year in the Madness at Merrill Lynch. Unlike Michael Lewis' classic Liar's Poker or Frank Partnoy's recent F.I.A.S.C.O., this book makes no claims that Wall Street firms are out to hurt their customers. Instead, it's the employees who get mangled here. The author is Paul Stiles, who spent his 29th year at the New York headquarters of the world's biggest securities firm. A thoughtful young man, Stiles chronicles his journey from earnest supplicant to angry, defeated, and fired ex-gofer. What has he learned? "There is a reason market people are paid so much--the price of a soul is expensive," writes Stiles. "But when looking at the rich, we never think about that. We just want their things."

Stiles begins his tale in Annapolis, Md., where he and his wife were living in the early 1990s. A stint at the National Security Agency had left him disillusioned and feeling it was time to make some money. Why he wanted riches wasn't clear to him--maybe so he could retire at 40, a real possibility for some Wall Streeters. He persuaded his wife to leave their cozy cottage and move to New York in search of a job. After months of networking with Harvard college friends, placing countless cold calls, and sweating through more than 50 interviews, Stiles landed a junior position at Merrill Lynch & Co.

Unfortunately, his timing was dreadful. It was December, 1993, and the industry was headed into a year of big bond-trading losses. Stiles was in the eye of the storm: He had been hired by the "Latin Mafia" that runs the emerging-markets division of Merrill's massive bond-trading business. Emerging markets, which include the debt of Latin, Asian, and African nations and companies, got slammed in 1994 by Mexico's political upheaval and a sharp interest-rate hike. As for the Latin Mafia--Merrill's incestuous group of Latin American traders and salespeople who specialize in Latin debt--1994's losses marked the end of their clout at Merrill.

Stiles discovered he was as disposable as a piece of furniture. He was absolutely on his own, unable to get any support or guidance from those he had joined. It was a rude awakening for a boy from a close-knit, suburban family.

Rising to the challenge, Stiles clawed his way into several jobs. He describes how he succeeded at one assignment, organizing retail brokers to sell emerging-market bonds. But in time, the infighting and bureaucracy overwhelmed him. A year after he began, sensing that New York had turned him into a greedy, slick, detached person, making money no longer seemed so important. A conversation with his father, a high-school history teacher, about their respective careers proved a turning point. "I realized that a man's moral worth and his net worth were two very different things," writes Stiles. Demoralized and demoted because of departmental losses, he almost courted his own firing. At yearend in 1994, he returned to Annapolis, where he works in marketing.

Riding the Bull provides a worm's-eye view of Merrill Lynch that contrasts with its carefully crafted image of benevolence and intelligence. The firm comes off as a bunch of cowboys who don't hesitate to fire others to keep their bonus pool intact. Stiles's colleagues seem greedy, cowardly, selfish, heartless, and not very smart. Moreover, they are abysmal managers: Stiles was shuffled to six separate jobs in his one year of work. And divisional infighting between Merrill's retail brokers and those who serve corporate customers appears debilitating for everyone.

The experience prompts the author to ponder the source of his obsession with money, something that obviously did not come from his father. He, like many others, had succumbed to the lure of Wall Street without really thinking about why he wanted to go there. Yet Stiles unconvincingly attempts to shift the blame for his money lust to our society's worship of wealth. "Everywhere market principles are choking moral principles, strip-mining substance, bulldozing beauty, razing reason, and we can't even summon any outrage anymore because we are so deafened by the roar," he writes. Would he have reacted differently had his timing been better and rewards been greater?


Still, Stiles is a talented writer who can craft a precise metaphor, recreate dialogue, and communicate subtlety and emotion. His is an angry yet gentle protest against being ignored and treated badly. Stiles accepts some blame for his failure. With more perspective, he may realize that he got just what he wanted--and that Merrill was hardly culpable. The firm hired him, an outsider with no connections, and turned him loose. His firing was his own fault: He couldn't overcome his disdain for his employer and, ultimately, for himself. Take note, Princetonians, before you stampede onto Wall Street's brutal playing fields.

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