Confessions of a Wall Street Analyst

Book Review
Alban GONORD & Joëlle MENRATH
Mobile Attitude
Ce que les portables ont changé dans nos vies
Hachette Littératures, 2005, 282 pages
by Marie MARCHAND
Les auteurs disent du mobile (ou portable) qu'il est un objet à tout faire (bien
ou mal) et qu'il n'est pas forcément utilisé pour ses fonctions principales. A
cet égard, le portable ne fait que ressembler à tous les objets domestiques
qui sont constamment détournés de leur usage (voir les travaux de Philippe
Mallein sur le sujet). Les auteurs ajoutent que ce portable s'inscrit dans la
gamme des objets qui disent le statut d'une personne, ce qui n'est guère
différent d'une Swatch, d'une paire de Nike, d'un appareil photo ou d'un
Palm au demeurant.
Tout ceci est vrai et a été confirmé dans de nombreuses études sur les
objets techniques et sur les objets de communication. Mais, c'est assez
plaisant de se reconnaître dans les petites stratégies individuelles que les
uns et les autres mettent en œuvre pour se donner l'impression qu'ils
utilisent leur téléphone portable différemment de leurs amis ou
connaissances, en se créant leur bulle, en branchant l'appareil dès leur
réveil pour scander la journée, en téléphonant en compagnie d'autres
personnes (vivent les terrasses de cafés !), etc.
C'est dans cette
chaîne d'objets techniques de communication et
d'information (qui va du fixe au mobile, en passant par le minitel, l'internet, le
palm, etc.) qu'il me semble devoir analyser le téléphone mobile et je regrette
que les auteurs de Mobile attitude aient l'air de considérer qu'ils s'intéressent
au premier objet technique de communication individuelle et portable, en
faisant fi de la chaîne d'objets qui l'ont précédé et introduit.
Mais au fond, les auteurs de Mobile attitude racontent ce "dé-paysement" à
leur manière et je voudrais reprendre quelques-unes des idées forces de
leur travail. Je retiendrais les idées suivantes :
• Le téléphone portable est un objet technique qui comble le vide
"existentiel" (la vacuité du temps, l'ennui, les temps morts, tous ces espaces
interstitiels, et malheureusement, de mon point de vue, les moments de
respiration, et de méditation).
COMMUNICATIONS & STRATEGIES, no. 62, 2nd quarter 2006, p. 217.
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No. 62, 2nd Q. 2006
• La médiation des relations entre moi et les autres. Les auteurs vont
chercher des exemples riches, qui montrent que le téléphone scande toute
une vie. Dommage qu'ils n'aient pas analysé le deuil auquel ont conduit les
téléphones portables qui sonnaient du haut des Twin Towers, alors que
leurs porteurs étaient probablement déjà morts. Y aurait -t-il un portable
après la mort ?
• L'impérieuse nécessité d'un téléphone portable comme outil
d'autonomie à l'âge adolescent où l'on veut être libre (ce que notait Philippe
Mallein dans ses travaux déjà anciens sur le concept du "séparés
ensemble").
• Sa petite note de musique qui fait de "sa" sonnerie un double de sa
personne.
• Les retrouvailles familiales des parents qui osent à nouveau
téléphoner à leurs enfants, car avec un portable, c'est ludique. Et du coup …
pas intrusif, de mon pint de vue.
• Le fait que le mobile soit le plus souvent porteur d'un non-événement
(T'es où ? Tu m'entends ? je ne t'entends plus !)
• Le gestuel autour du portable, qui leur fait, à juste titre, penser à celui
de la cigarette.
• Leur analyse du regard social sur le portable ne peut manquer de me
faire penser à son revers direct : le vol massif des portables, que j'aurais
aimé voir pris en compte.
• L'impossibilité de l'isolement, que ce soit de la voix ou du SMS, qui
me rappelle les raisons - évidement indirectes - de l'assassinat tragique de
Marie Trintignant pour cause de SMS mortel.
• Le savoir-vivre du téléphone portable, dont les auteurs relèvent
l'ambivalence, et qu'on ne peut s'empêcher de rapprocher de la "Netiquette",
autrement plus contraignante.
• Le concept de communauté compatissante qui est bien sûr lié au
téléphone, mais qui le dépasse largement, puisque consubstantiel de nos
sociétés contemporaines, tant au plan familial qu'au plan social, qu'au plan
politique. …"Les foules sentimentales" qu'Alain Souchon célèbre avec les
mots du poète.
• Le pacte, sans cesse renégocié et mouvant, qui remplace la loi non
appliquée et rigide (elle-même antinomique des communautés
compatissantes).
Je terminerai cette note de lecture en vous disant que j'ai beaucoup aimé
l'épilogue que je vous laisse découvrir.
Book Review
219
The authors claim that the mobile phone is a multi-purpose object (for better
or worse), which is not necessarily used for its main function, namely
telephony. In this respect, mobile phones are no different to all domestic
objects, which are constantly used for another purpose to that for which they
were intended (for a more detailed discussion of this topic see the work of
Philippe Mallein). The authors are right when they add that the mobile phone
belongs to a range of objects that reflect an individual's status, but that it is
no different to Swatch watches, Nikies, cameras or Palms at the end of the
day.
All this is true and has been confirmed by several studies of technical and
communication objects. However, it is rather pleasant to recognise oneself in
the little strategies adopted by various individuals to give the impression that
they use their mobile phone differently to their friends and acquaintances, by
creating their own private bubble, by turning the telephone on the moment
they wake up to mark the beginning of the day, by telephoning while in the
company of others (three cheers for café terraces!), and so on.
It is in the context of this family of communication and information tools
(ranging from the fixed telephone to the mobile, via minitel, the Internet,
palms, etc.) that mobile telephony should, in my opinion, be analysed.
Unfortunately the authors of Mobile Attitude seem to be under the
impression that they are dealing with the first ever personal and portable
communication object, and do not spare a thought for the chain of objects
that preceded and paved the way for the mobile phone.
However, the authors of Mobile Attitude essentially have their own way of
relating this "change of scene" and I would like to highlight some of their
stronger concepts in their work. These ideas are that:
• The mobile phone is a technological object that fills the "existential"
gap (empty time, boredom, dead time, all of those interstitial spaces, which
unfortunately, from my point of view, represent moments for taking stock and
reflection).
• The mediation of relationships between me and the others. The
authors present a broad range of examples that illustrate how the mobile
phone marks the pace of our entire life. What I regret is that they do not
analyse the grief caused by the mobile phones that continued to ring at the
top of the Twin Towers after their owners had probably already died. Will
there be a mobile phone after death?
• The imperative necessity of owning a mobile phone as a tool of
independence for adolescents who have reached an age where one wants
to be free (a point already made by Philippe Mallein in older research into
the concept of "separated together").
• The mobile phone's musical touch that makes "its" ring tone a double
of its owner's personality.
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No. 62, 2nd Q. 2006
• Renewed family bonds with parents who dare to ring their children
again because mobile phones make this fun - and suddenly not so intrusive
in my opinion.
• The fact that mobile phones often bear the news of non-events
(Where are you? Can you hear me? I can't hear you!)
• All the gestures related to mobile phones, which are reminiscent of
smoking.
• The authors' analysis of the social attention attracted by the mobile
phone inevitably made me think of its flip side, namely the widespread theft
of mobile phones, which I would like to have seen dealt with.
• The impossibility of isolating oneself, whether this be from voice or
SMS communications.
• The good manners of mobile telephony, whose ambivalence is
underlined by the authors and which one cannot help comparing to
"Netiquette", which is more restrictive in a different way.
• The concept of the caring community, which is of course related to the
telephone, but which goes far beyond it, since it lays the foundation of
contemporary society, both in terms of family-life, social interactions and
political reality.
• The pact, constantly renegotiated and changing, that replaces the non
applied and rigid law (itself antinomic to the concept of caring communities).
I would like to conclude this review by saying that I deeply enjoyed the
book's epilogue, which I will leave its readers to discover for themselves.
Debra HOWCROFT & Eileen M. TRAUTH (Eds)
Handbook of critical Information Systems Research
Theory and Application
Edward Elgar publishing, 2005, 426 pages
by Jean-Gustave PADIOLEAU
This book provides an excellent opportunity for readers to familiarise themselves with
an increasingly popular research paradigm in organization and management studies,
namely critical realism. This volume is a welcome addition to the previously published
works of reference (including: M. ARCHER et al., Critical Realism, Essential
Readings, Routledge, 1998, London; S. ACKROYD et al., Realist Perspectives on
Organization and Management, Routledge, 2000 London; Critical Realist
Applications in Organization and Management Studies, Routledge, 2001, London).
In a few words, critical realism aims to be an alternative research paradigm
to positivism and to post-modern relativism. Realism? There is a world which
exists independently of the researcher's representation of it. Critical? Social
Book Review
221
sciences have an emancipatory potential. They can be critical of the social
phenomena they observe. Realism favours normative judgments. This
normative agenda may disturb or irritate potential readers of the Handbook
of Critical Information Systems Research. The contributions include
numerous neo-marxist and feminism critiques. Nevertheless, this collective
work deserves attention.
The Handbook of Critical Information Systems Research offers valuable
insights into, for instance, the complex issues of "rationalities and emotions"
and "power" in Information Systems. Economists and specialists will
appreciate the provocative analysis of wide-spread phenomena, although
the cases of "Is failure" and "design fallacies" merit further study. Other
stimulating contributions include "management fashions and informations
systems", "the ethnical turn in Information systems" and "competing
rationalities."
Once again, some aficionados of the "lieu commun" in positivist social
science against normative judgements will disregard this challenging
paradigm in progress. However, like it or not, let's recognize that the
academic labour of critical realism has an emancipatory potential of
liberating our closed minds.
Dan REINGOLD with Jennifer REINGOLD (Eds)
Confession of a Wall Street Analyst: A True Story of Inside Information
and Corruption in the Stock Market
HarperCollins Publishing, New York, NY, 2006, 368 pages.
by James ALLEMAN
Dan Reingold not only lays outs his career as a telecommunications analyst
on Wall Street in this professional autobiography, but sets forth quite
explicitly many of the problems with the financial services industry and the
information and communications technology (ICT) sector it supported.
Unfortunately, most of these problems have not been resolved by legislation
arising from the scandals, accounting frauds, and deceptive practices at
Enron, Qwest, WorldCom, Global Crossings, and other companies that
resulted in bankruptcies, losses of trillions (yes a "t") in stockholders' value,
tens of thousands of redundancies and employees losing their retirement
plans and savings.
Reingold takes a swipe at interlocking directorships, particularly in the case
of AT&T and Citigroup, the indefeasible rights of use (IRUs) and their
accounting treatment. Reingold provides details on Bernie Ebbers and the
rise of WorldCom and Jack Grubman's role on the financial side, as well as
Grubman's intimate relationship with Ebbers. The rise and fall of Global
Crossing, Qwest, and other companies, with the aid of analysts and bankers,
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No. 62, 2nd Q. 2006
are detailed in the book. In addition, the author indicts the accounting
industry, particularly the quality and reliability of auditors, for whom he earlier
had admiration. He points out the changes in their practices that aided and
abetted the nefarious practices of the ICT sector.
Reingold indicates how the investment bankers both scorn analysts and
attempt to coerce, intimidate and sway them to rate their clients favorably. At
the same time, many analysts were under pressure to provide advance
notice to bankers of down grades in ratings. With respect to IPO's Reingold
notes:
"The problem was that the IPO shares were being spun, certain
investors got inside information and the rest of the investing public was
playing in a rigged game and didn't even know it." (p. 274).
For those who lost some of the trillions of dollars in the market, the book is
sure to confirm their suspicions and annoy them. More importantly,
according to Reingold, the systemic problems have not been addressed.
This points to additional problems, disappointments and a lack of confidence
in the veracity of the stock market in the future.
According to Reingold the "Chinese Wall" separating the analyst and the
investment banking segment of the firm is breached – more often than one
would like to think. Moreover, he stresses the importance of information,
which moves the market, by millions, if not billions. Early access to this
"insider" information can make fortunes for the insiders (and rarely leads to a
jail term, even if offenders are caught). Reingold cites the example of
Fidelity, in the days before Reg FD (Fair Disclosure), which requires all
information about a company to be released to everyone simultaneously.
The analysts would fly to Boston and brief Fidelity first, and then move on to
others. Thus, Fidelity would get the early news on the buys and when to sell.
"Trying to mimic Fidelity's stock purchase was a good strategy, one
that many individuals and companies employed, but it had a major
downside: if you were still in when 'FIDO' started selling, you were
toast." (p. 110).
Another example of the power of insider information was with Global
Crossing, in which only a handful of people were privy to a briefing (p. 237)
which indicated problems with Global Crossing's business plan – its stock
price fell by 17 percent within two hours of the meeting.
More importantly, he indicates how both Wall Street and the ICT sectors
were complicit in the collapse of the ICT sector. Reingold also notes how the
research arms of banks were continually pressured to support banking side
deals (pp. 36, 71, 103, 104, 112), as blatant as tying analyst's compensation
to the banking side revenues (p. 186) or more subtle forms of incentives or
threats. He discusses how the Security and Exchange Commission's (SEC)
"No-Action Letter" and knowingly looking the other way facilitated the
conflicts of interest between research and banking (pp. 41, 103, 163-165 ),
which have not been addressed.
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223
In this easy to read and informative book, Reingold (with Jennifer Reingold,
his niece) traces his career from MCI to Morgan Stanley, to Merrill Lynch,
and finally, to Credit Suisse First Boston (CSFB) during the stock market's
"go-go" years of the late nineties and early in this century. Along the way, he
introduces many high-rollers on Wall Street and the ICT sectors – their
arrogance, hubris, and conceit, but most of all their greed. In particular, his
evil "twin," Jack Grubman of Smith Barney, is one of the major villains of the
piece. According to Reingold, Grubman is constantly revealing privileged
information after going "over-the-wall," that is, talking to the investment
banking side of the business and their clients. Grubman, according to
Reingold, would spread this knowledge through out the industry in order to
gain status and be known as an insider (pp. 77, 71, 133, 174, 224, 285).
Unfortunately, this could cost the unaware investing public, and even some
of the professional investors, hundreds of millions of dollars; in one case
Reingold documents, a three billion dollar swing in a day (p. 78). But yet,
even when the law comes down on Grubman, he only has to pay a 15
million dollar fine, less than half of his severance package and only a small
piece of his reported 80 million dollars of compensation during the period
(pp. 288-289). Crime pays!
But Reingold goes further than this well publicized story to criticize the fact
that Spitzer or other crime fighters did not investigate how high up the ladder
the corruption went; although one gets a clue in the actions of Sandy Weill,
Chairman and CEO Citigroup at the time, and Grubman to cite a specific
example.
Michael Armstrong, head of AT&T, expressed to Weill, who was on AT&T's
Board, his annoyance with Grubman's negative views on AT&T. Weill asked
Grubman to "take another look" at ATT shortly before ATT spun-off its
wireless business and would need an investment bank to handle the world's
largest IPO. In the end Grubman raised the rating on ATT, and got his two
children into the desirable 92nd. Street Y pre-school with Weill's assistance.
The pre-school received a one-million dollar donation from Citigroup (a tax
write-off for the firm). And, Citigroup became one of the lead bankers on the
AT&T offering and made 63 million dollars for the firm (pp. 197-199). Later,
Grubman returned to verbally dissing AT&T while maintaining its high "buy"
rating and within a few months had lowered it by two notches. By the way,
Armstrong was used to solidify Weill's power at Citigroup by helping oust his
rival co-chairman. This is one, but perhaps the most well known, example
cited by Reingold of conflicts of interest in the industry.
Reingold's focus on the incentive structure offered by the banks and the
industry is critical to the understanding of the remedies, which he does not
feel the current reform captured. Every securities policymaker should read
the last chapter – "Afterword" – of Confessions… to understand how the
current legislation and regulations are not adequate to control and correct
the practices of the finance sector. Indeed, he feels that Elliot Spitzer did not
No. 62, 2nd Q. 2006
224
go far enough. He failed to reach the highest level of the executive suite.
The famous 1.4 billion dollar settlement with the financial industry, for
example, only "punished" the firms and not the individuals involved. Indeed,
it is a small sum to pay when the industry made over 80 billion dollars in
profit during the period (p. 288).
"I just hoped he [Spitzer] wouldn't stop at firms, but would take his
crusade right to the door of individuals who broke the rules. After all…
if firms are fined, the stockholders suffer. By contrast, if individual
executives are punished, shareholders will benefit because executives
are more likely to behave better in the future and spend more time
running their companies instead of lining their own pockets." (p. 288).
The research environment steadily deteriorated over this period, and it does
not appear to have improved despite all the rule changes and legislation.
"This job was less about analysis and more than ever about who you knew."
(p. 205). This is why the last chapter of the book is so important; it provides
guidance on how to rectify these issues from someone who knows the
problems and conflicts intimately.
As with several books on the collapse of the ICT sector and practices of its
financial enablers, this book reads like a novel, except no publisher would
accept it as believable. But this is not fiction and the problems, issues and
conflicts remain, much to the detriment of the society and the investing
public. Would that all analysts had the ethics of a Dan Reingold; regrettably,
it appears they do not.
Thomas SCHULTZ
Réguler le commerce électronique par la résolution des litiges en ligne
Une approche critique
Bruylant, Cahiers du centre de recherches informatiques et droit, Brussels, 2005, 672
pages
by Jean-Pierre DARDAYROL
Ce livre traite des relations qu'entretiennent d'une part, la régulation du
commerce électronique et d'autre part la résolution des litiges en lignes. Il
est tiré de la thèse en doctorat de l'auteur. L'approche, présentée comme
pluridisciplinaire, est principalement juridique. Elle s'adresse à un public de
spécialistes.
L'ouvrage aborde successivement trois sujets :
- la théorie générale de la régulation du cyberespace en s'attachant
principalement à décrire l'état du droit dans le cyberespace, les trois
principaux modèles de régulation, avant de présenter la thèse de
l'auteur : "le réseau : méta-modèle de régulation ;
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225
- le mouvement "on line dispute resolution" qui est analysé, puis
présenté comme une voie privilégiée d'accès à la justice ;
- l'analyse critique et fouillée des conditions de validité d'une régulation
du cyberespace par la résolution des litiges en ligne.
La thèse de l'auteur - riche et large - repose sur des idées fortes :
- pour les petites et moyennes transactions, les acteurs du on line
dispute resolution sont bien positionnés ;
- alors que les formes classiques de justice sont peu accessibles, mal
adaptées et coûteuses ;
- les résolutions en ligne par des acteurs déterritorialisés reposeront sur
deux piliers : d'une part, "des principes fondamentaux communs" et
d'autre part, l'autoexécution des accords.
En face de cette innovation fondamentale, l'auteur souhaite la mise en place
d'une intervention de l'Etat pour l'encadrer, notamment en cas de dérives.
The book, based on the author's doctoral thesis, examines the relations
between electronic commerce regulation on the one hand and online dispute
resolution on the other. Although presented as multi-disciplinary, the
approach adopted is mainly juridical and the book is aimed at specialist
readers.
The book centres on the following three topics:
- a general theory of cyberspace regulation, which offers an overview of
cyberspace legislation and the three main regulatory models adopted,
before moving on to present the author's thesis: "The network: a metamodel of regulation";
- the trend towards "online dispute resolution," which is analysed and
subsequently presented as a privileged form of access to justice;
- a critical and detailed analysis of the validity of regulating cyberspace
via online dispute resolution.
- The author's thesis – rich and extensive – is based on strong ideas:
- online dispute resolution players are well-placed when it comes to
small and medium-sized transactions;
- traditional forms of justice, by comparison, are inaccessible, ill-suited
and expensive;
- online resolutions by players outside national jurisdictions will be
based on two mainstays: "fundamental common principles" on the one
hand and self-enforced agreements on the other.
Confronted by this radically innovative process, the author expresses his
desire to see a State body set up to oversee online dispute resolution,
especially if the situation drifts out of control.