globally and in Latin America.
Golden Boys: Who these people were is as reveal-
Vivir en los Mercados ing as what they did. Iglesias mixes engaging accounts of the golden boys’ New York and Greenwich, Connecticut, lifestyles with a taxonomic analysis that classifies and explains the three distinct species prowling today’s financial circles. Traders are the “cowboys” unafraid to take risks. Investment bankers, traditionally more cultured and upper-class, work directly with governments and large institutions in the issuance of new bonds. The third group comprises analysts—middle-class intellectuals reviewed by Peter Kingstone content with less pressure, but with lower salaries.
The year 2001 will go down fact with a confession of his own Why did Argentines play such a as one of the worst in Argen- ignorance: he once wrongly intro- crucial role? Iglesias draws his por-tine history. The combina- duced a friend who worked in a traits withafinesenseofthehistory tion of an unprecedented eco- bank as a banker rather than an of the period, from the development nomic crisis and political chaos led economist. That led him to realize of the Latin American debt market the government to rethink its eco- that he, like many of his compatri- in the early 1980s through the after-nomic policies and scrap the famed ots, failed to understand the “basic math of the 2001 crisis. Convertibility Plan—a stabilization zoology” of the financial world, par- During the 1980s, the Brady Plan plan that had tamed the hyperinfla- ticularly the different roles played and the subsequent success of Ar-tion of the late 1980s. In December by bankers, traders and economists gentina’s Convertibility Plan had of that year, Argentina was forced (or analysts). fostered a more predictable and to formally default on its $90 billion The book’s primary focus is the rule-bound market for Latin Amer-external debt—the largest default in golden boys—a group of young Ar- ican debt. That brought large insti-history. The effects: a resurgence in gentines who became central figures tutional players into the market. inflation, and dramatic increases in on Wall Street in the late 1980s and When those players sought out bank-bankruptcyandunemploymentrates. 1990s and symbolized the country’s ers and traders with a deep knowl-In that troubledtime, five presidents economic aspirations. They were a edge of Latin America, Argentines held office in just two weeks. mixed group of “smiling, shining seemed the obvious choice. They
As Argentines looked for blame, offspring—pure future, nothing of had a proven record of deploying Wall Street emerged as the conve- the past [with] technocratic prom- their personal connections and so-nient villain. Argentines widely con- ise, not political.” Some came from cial skills. But they also offered an sideredthemselvestobethevictims upper-class backgrounds with de- extra edge. In a fluctuating envi-of a financial conspiracy. Was this grees from prestigious private uni- ronment where debt holders were fair? Not according to Hernán Igle- versities and personal connections eager for any returns, Argentines sias Illa. A New York-based Argentine in elite social circles. Others, from could excel. “We aren’t very solid in journalist, Iglesias, in Golden Boys: Vi- lower economic levels, made up for the hard sciences…but where there vir en los Mercados (Golden Boys: Liv- their lack of elite credentials with is space for creativity and indisci-ing in the Markets), argues that New drive and ambition. These young peo- pline, there will always be Argen-York financiers did not cause the Ar- ple were recruited directly from Ar- tines,” Iglesias writes. In fact, he gentine meltdown. gentine branch offices by firms like notes, Argentina’s expatriate trad-
Golden Boys is a brave book. It’s Goldman Sachs, Deutschebank, Le- ers created the first real markets for not easy to go against conventional hman Brothers, and JP Morgan. And Latin American debt.
wisdom. But as Iglesias points out, they did not disappoint. In fact, until A developing market also required that wisdom is based on ignorance relatively recently, Argentines were more detailed and expansive coun-of the way financial markets actu- at the forefront of Wall Street banks’ try analyses. Here, too, Argentines ally work. He begins his account in emerging-market operations, both rose to become some of the leading
by Hernán Iglesias Illa
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