Cramer vs. Cramer: critics say Wall Street's favorite talking head is obnoxious, abusive, and crooked. Jim Cramer takes issue with "crooked.". - 'Confessions of a Street Addict' and 'Trading with the Enemy: Seduction and Betrayal on Jim Cramer's Wall Street' - book review

Washington Monthly, June, 2002 by Jamie Malanowski

CONFESSIONS OF A STREET ADDICT by James J. Crmer Simon & Schuster, $26.00

TRADING WITH THE ENEMY: Seduction and Betrayal on Jim Cramer's Wall Street by Nicholas W. Maier HarperCollins, $22.95

JAMES J. CRAMER IS SO THOROUGHLY A MAN of his age that the Museum of the City of New York ought to stuff him now for future exhibition. The bedrock of the Bozo-haired, gruff-talking, Harvard-educated Cramer's reputation is the highly profitable Wall Street hedge fund he ran from 1987 to 2000, but he is much more: investor, gambler, tout, journalist, celebrity. Just as Edith Wharton's characters perfectly exemplify the Gilded Age, Cramer will represent to future generations all our splendid contradictions: brilliant and short-sighted, vain and confessional, mean and sentimental, likable and frightening.

Like Bill Clinton, Cramer characterizes the Baby Boomer wait of wanting to prove to everyone that he's smarter than they are, and at the same time be loved for it. It is an elusive objective. Cramer, who on tumultuous trading days has been known to post his pensees on his Web site up to 12 times a day, is clearly a man who values his own opinions (as, obviously, do his investors, subscribers, bookers, and various television executives, most recently CNBC, where he co-hosts the program America Now with Lawrence Kudlow).

Now, presumably at mid-career, he has given us a memoir, Confessions of a Street Addict. It's an entertaining book, as far as it goes. Cramer has had many adventures and triumphs, and he is a considerate and often amusing guide to what the Wall Street game looks like from perches high and inside. At the same time, the book often feels like an iceberg: It still seems like the bigger chunk of the story, whether about the man or the arena, remains beneath the surface.

Cramer's first claim to fame, his hedge fund, is essentially a legally sanctioned stock gambling club. Because the law considers hedge funds to be high-risk propositions, they are set up so only the very rich can play. Some number of them form a limited partnership under the leadership of a sharpie like Cramer, who invests funds on their behalf, not by identifying and backing good, well-managed companies, but by finding out information, from sources far and wide, published and whispered. It doesn't matter to hedge fund managers whether the news is good or bad; they just as happily bet against companies as for them, hoping to wring a profit from the short-term ups and downs. Either way, they spend their days frantically buying and selling, selling and buying, holding onto little for very long, squirreling away the profits.

I don't know if one has to be monomaniacal to be good at this, but Cramer was top-notch, and he suited up for work every day as if it were up to him and Mel Gibson to drive the English out of Scotland. ("I couldn't bear to be down for a day, let alone a month or a quarter.") Doing the job required not only a vast amount of preparation--Cramer says he got up at 3:30 a.m. daily to start reading--but also, once the wading day commenced, a fanatically single-minded determination to wring the maximum profit it out of each wade. Cramer had to make dozens of million-dollar judgments before lunch every day; and he wanted to be right about each one.

Running such a demanding fund in such a demanding way would be load enough for most men. Not Cramer. Even as he was running his fund, he became a financial pundit, writing articles for Smart Money, Time, and other publications, as well as appearing on CNBC, Good Morning America, and elsewhere. If that wasn't enough, in 1996 Cramer tried to get in on the Internet. He and Martin Peretz, co-owner of The New Republic and the cornerstone investor of Cramer's hedge fund, founded the financial Web site TheStreet.com.

In this process of becoming rich, successful, and famous, Cramer also became a jerk. He admits to juicing stocks and flipping IPOs, stuff that one shouldn't do, dismissing it as so much everybody-does-it "chicanery." He admits that he talked stock at his mother's funeral. When his daughter was being rushed to a hospital, he told his wife he couldn't go because he was shooting a commercial. (He came to his senses a few moments later.) He talks about feeling so guilty about being investigated for not disclosing his holdings in stocks he was writing about (inadvertently, he insists) that he started drinking so much that he got completely blotto and puked volcanically all over his guests at a surprise birthday party.

We also know this side of Cramer from another new book, Nicholas W. Maier's Trading with the Enemy: Seduction and Betrayal on Jim Cramer's Wall Street, whose tendentious, oversold title tips its contents. In 1994, Maier was a largely directionless college graduate with a mild interest in the market, fairly unexceptional in every respect except in having parents who were neighbors of Martin Peretz. In the easy, seigniorial way rich people and Mafia dons have of dispensing favors, Peretz sent Maier to Cramer, who hired young Nick at a station at once menial and above his abilities. Maier eventually grew competent and then, later, fed up. He describes Cramer as a mean, volatile, abusive, nasty boss, given to tantrums emphasized by the heaving of computer equipment.