How Wall Street Started Selling You Financial Products

Tracy Alloway (0:08)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway. My co-host, Joe Weisenthal, is away this week. But for those of you who follow Joe on Twitter, you probably know that one of his favorite activities is to read the print edition of Barron's, the financial magazine. And the reason he likes to read the print edition specifically is because he likes to look at all the ads. And most of those ads are for various financial products. So today, in honor of Joe, since he can't be here with us, I thought we might take a moment to revisit the first ever financial advertisement. And it actually came later than a lot of people might think. It was written by a guy called Lou Engel, who was working at Merrill. And it was published in 1948 in the New York Times. And it was really the first such financial advertisement that we'd seen in the sense that it was aimed at everyday investors. And I encourage everyone after they listen to this podcast, please, to go and Google the ad. It's called What Everybody Ought to Know About the Stock and Bond Business. And it's basically 7,000 words of pure text explaining what stocks and bonds are to everyday investors. But this was the thing that kicked off all the ads that we see nowadays in places like Barron's.

And again, the reason why people like Joe find the ads really interesting is that they tell you something about where Wall Street is heading. They tell you about where Wall Street is trying to make money from everyday investors like you and me.

So we're gonna dive into not just that ad, but also the trajectory of Wall Street, how we got to the place today where a lot of the business is aimed at marketing products like ETFs, like mutual funds to everyday investors. And we really have the perfect person who's going to be our guest for this episode. His name is Eric Weiner.

He's on my team at Bloomberg. He heads up our very, very excellent ETF coverage. And he is also the author of an entire book on the history of Wall Street. It's sort of an oral history. It's called What Goes Up? The Uncensored History of Modern Wall Street as told by the bankers, brokers, CEOs and scoundrels who made it happen.

Eric, thanks so much for joining us.

Eric Weiner (2:52)

Thanks for having me, Tracy.

Tracy Alloway (2:53)

Or me.

So some of my favorite episodes that we do on Odd Lots are where we find people at Bloomberg who have interesting backgrounds, interesting backstories, and interesting accomplishments. So I was actually very pleasantly surprised to see that you had not just written one book, which we're gonna talk about today, but actually two books. How did that come about? And maybe you can give us a little bit of background on your role as a financial journalist.

Eric Weiner (3:23)

Well, it's this book was sort of a labor of love and a product of all of the work that I had done in the 1990s as a journalist when I was at Dow Jones.

The idea came from really bizarrely reading a book called Please Kill Me, which is about punk rock, which is another one of my interests. But it was done in this exact style. And what I noticed was that it took something that wasn't necessarily a singular thing, a singular place, a singular time, and put it in a narrative structure that made it all make sense as if it had happened in a preordained way.

At the same time, I was watching those Ken Burns documentaries that were all coming out. And he was doing very interesting things by using primary-sourced information as well as interviews in order to tell a story.

And working with a friend of mine in publishing, I came up with the idea to do this for the history of Wall Street, which I had sort of been chronicling by talking to all of these people at various different investment banks as I was reporting. And I just naturally had an interest in history, so I would ask them how things came about. And different firms had really lengthy histories. Lehman Brothers had basically every document it had going back to the 1800s. Merrill Lynch had a library, a literal museum of all stuff, including the famous Lew Engel ad. So I found sort of mutual kinship, and people were remarkably open to talking to me. It took me a while to nail down. I did about 300 interviews with some of the richest people in the world, so nailing them all down wasn't easy. But a lot of them were very willing to talk and very candid about what happened.