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Feb. 13, 1990: Erstwhile junk bond powerhouse Drexel Burnham Lambert files for bankruptcy. Driven by the financial wizardry of Michael Milken, Drexel embodied the Anything Goes spirit of the 1980s. Relatively unknown investors with little money but big ambitions could become feared corporate raiders through the magic of high-yield debt.
Milken and his disciples seemed to have created new economic realities, until the economy soured and the Securities and Exchange Commission started looking more closely at the connections among the new Masters of the Universe. It all came tumbling down with Milken's indictment on insider trading charges in 1989 and Drexel's collapse a year later. While many companies and careers were ruined, the saga served a salutary purpose: Never again would otherwise sober financial services professionals fall prey to the narcotic effects of risky debt instruments. - Jeffrey Kanige
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From: Matthew Wurtzel,
Jeff, Thanks for the comment. However, please be aware that the writer meant the comment to be sarcastic -- as is often his style. The editors
Posted on:
February 19, 2008 2:29 PM
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"Never again would otherwise sober financial services professionals fall prey to the narcotic effects of risky debt instruments."
Oh, really? Then the internet / telco collapse a few years later and the current sub-prime fiasco are all a dream?