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The Accidental Investment Banker
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The Accidental Investment Banker

Inside the Decade that Transformed Wall Street

Jonathan A. Knee
Oxford UP, 2006
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10

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  • Innovative

Recommendation

Whenever there are dramatic upheavals on Wall Street, shock waves ricochet throughout the U.S. and world economies. And, when you say Wall Street, most people think of its storied investment banks – Morgan Stanley, Goldman Sachs, J.P. Morgan Chase. Who built and ran these firms? What makes them tick? How did they fare in the booming 1990s? And what is happening to them (at least, what was happening just before the autumn 2008 crackup). Investment banker Jonathan A. Knee, a Goldman Sachs and Morgan Stanley alumnus, reports on his career and on the investment banking industry. He explains how these firms have changed radically from the days when J.P. Morgan Jr. advised his peers to do “first-class business in a first-class way” to the Wall Street motto of the 1990s, “IBG-YBG” (“I’ll be gone, you’ll be gone”), meaning, “Who cares what happens long-term regarding the deals we do today?” This shockingly shortsighted viewpoint led to the recent bitter harvest. If you want to understand how Wall Street works – and sometimes doesn’t work – getAbstract recommends this informative, insightful and witty book.

Summary

The Go-Go 1990s

The 1990s were a fantastic period on Wall Street. Economic growth seemed inevitable and everlasting. Some think of the 1980s as the 20th century’s great boom era, but in the ’90s, things really zoomed into the stratosphere.

For example, in 1999, America’s three top investment banks – Morgan Stanley, Goldman Sachs and Merrill Lynch – each handled mergers and acquisitions (M&As) valued at more than $1 trillion. But Wall Street’s core values also changed drastically in the ’90s. How could they not? The markets offered Wall Street’s leading investment banks the chance to seize way too many profitable opportunities.

And seize they did. The investment banks handled innumerable, incredibly lucrative IPOs and M&As. The unusual nature of the high-tech firms that were going public also made these deals surprising. Many, particularly the Internet firms, had no business track records. Yet people lined up to invest in their overvalued equities. Netscape’s IPO in August 1995, which was followed by Yahoo, Amazon and eBay’s IPOs, marked this blistering economic era.

Wall Street had begun to remake itself even before the ’90s’ frenzied expansion...

About the Author

Jonathan A. Knee is an adjunct professor of finance and economics at the Columbia Graduate School of Business, and senior managing director of Evercore Partners’ corporate advisory practice.

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