In which the author tries to teach Diane Sawyer how the international currency market works and we're left with a nagging question: Sam Donaldson left the White House for this?

July 1989, ABC News, "PrimeTime Live" division, Diane Sawyer's office:

It is 89 degrees in New York, and I am attempting to unravel the complexities of the multibillion-dollar international currency market for Diane Sawyer by using a paperweight and a ballpoint pen.

"Okay, Diane," I say. "Let's assume that the paperweight represents Japanese yen, and the ballpoint pen is the U.S. dollar."

Diane puts on her glasses and nods to indicate that she is right there with me. Although it is so hot outside that my mascara melted on the taxi ride to her office, Diane is wearing a long-sleeved silk blouse, silk trousers and a cardigan. It flashes through my mind that she probably hasn't been outdoors since April.

"Now, you hold the paperweight . . . That's right, pick it up, and I'll hold the pen. Since the paperweight is yen, when you hold the paperweight in your hand, you're holding yen. In trading, we call that being long yen."

Diane nods again, and takes more notes. She has been taking notes since we began this interview, approximately 30 minutes ago. "PrimeTime Live" intends to do a story on currency traders, and she will be filming at Chemical Bank tomorrow. The story has been in development for more than six months.

"I'll hold the pen. That means I'm long dollars. I'm long dollars, and you're long yen."

"Right," says Diane.

"Now, are you ready?" I ask. "We're going to trade."

"Ready," says Diane.

I hand her the ballpoint pen, and take the paperweight.

"There!" I say with a flourish. "We've traded. Now, Diane, what are you long?"



Perhaps I have not approached this assignment with the requisite level of cynicism.

But I'm getting ahead of myself. Let's go back to the beginning.

March 1989, trendy restaurant on the West Side of Manhattan:

I am having lunch with Janet Tobias, a producer at "PrimeTime Live," who has come over with Diane Sawyer from "60 Minutes." Janet is 29 years old and reminds me of the character Ann Magnuson plays in Susan Seidelman's film "Making Mr. Right." She has only just arrived at ABC and informs me that she is impossibly busy. However, such is her enthusiasm for the international currency trading story that I am on her "short list." It is the first time I have ever heard anyone actually use this phrase in conversation.

I have been on her short list for about three months now. When Janet first contacted me in January, she explained that she had just read my book, Trading Up, on a flight home from London, and had decided that, as one of the few women to run her own trading desk on Wall Street, I was in a unique position to help "60 Minutes."

Evidently uniqueness is transferable. Janet proceeds to outline the concept behind "PrimeTime Live."

"It's going to be great," she gushes. "There's going to be a live audience, and everything we're going to do will be live. That's the new, fresh thing about this show. If there's an eruption at a volcano in Hawaii, we'll take you there live. If there are riots in the streets of South Africa, we'll take you there live."

Although I nod knowingly throughout this explanation, I am, in fact, confused. I have always assumed that "live" television meant that whatever was being shot went directly onto viewers' screens. But, since even Roone Arledge cannot command Mount St. Helens to erupt on a Thursday evening between the hours of 10 and 11 Eastern time, perhaps I have been misinformed.

Janet goes on to explain that "PrimeTime Live" also intends to set the standard for investigative journalism. Sam Donaldson and Diane (she drops their names with the comfortable familiarity of an insider) will settle for nothing less. Stories must deal with real issues, up close, personal, in depth.

In the spring of 1989, turmoil within the trading community certainly lends itself to any number of stories with real issues to explore up close, personal and in depth. Drexel Burnham Lambert has agreed to plead guilty to six felony counts of federal securities fraud and pay $650 million in fines, although management boasts that it will still recognize a profit and its plea will have absolutely no effect on the junk bond market. An FBI sting in the Chicago commodity pits has exposed widespread fraud; 40 traders have already been indicted. Commercial banks are pressing Congress to lift regulations prohibiting trading in a broad range of speculative instruments, despite the fact that Citibank recognized a $200 million loss on its overseas securities trading in 1988.

"Now, here's our idea for your segment," Janet leans forward, as if confiding in me. "We want to show people that currencies are traded on a 24-hour basis. That's the live aspect of this show. So, what we're going to do, we're going to put Diane on a plane, see, and send her to Tokyo for the opening of trading in Japan. Then we'll fly her to London in time for their opening, and show her at a trading room in the city. Then we'll fly her to New York, and show her in a trading room here. What do you say?"

I say I can't see what all that flying around the world is going to accomplish, beyond giving Diane industrial-strength jet lag. It would be an enormous amount of work, at enormous expense, and would not result in any greater understanding of the workings of the market.

Janet nods seriously, jots down a few notes and then leans even closer. "What do you suggest?" she asks.

I suggest that the real story behind the international currency market is that commercial banks use foreign exchange to speculate with billions of dollars of their capital, and nobody says boo. I further suggest that Diane fly to Washington and ask the chairman of the Federal Reserve Board if he is aware of this, and, if so, why he allows it. While she's there, she might also drop in on the secretary of the treasury, the comptroller of the currency and the head of the Senate Banking Committee. I add that, as far as I know, nobody has ever asked them these questions.

Janet considers this with a frown. "But what about the live aspect?" she asks.

I think for a moment and come up with an idea. At the time, I thought it was a pretty good idea.

"I'll tell you what," I say. "Why don't you trade for yourselves? Paper trade, I mean. Pretend you have $100 million to put into the currency markets. Buy and sell currencies based on your own decisions. Get a feel for what it's like to have to make a decision on that much money yourselves. Learn about the factors which influence the market. Try and figure out what effect other markets -- like the stock or bond markets, for example -- have on the currency market, and vice versa." I figure that way, not only can the show teach people, but it can communicate the excitement of trading to them. Also, once a person sees how much money can be made and lost on $100 million, they will be able to put the bank figures into perspective. "If, betting $100 million at a shot," I explain, "you find that you can only earn or lose a couple of million dollars, ask yourself how much money has to be bet in order to earn the $100, $200 or $500 million which the commercial banks recognize each year as income from foreign exchange transactions."

Janet smiles and pays for lunch.

July 1989, the offices of "PrimeTime Live":

In response to Janet's phone call, I have driven 2 1/2 hours from my home in Lenox, Mass., to attend an urgent meeting. The story is a "go," and my additional input is needed immediately. When I arrive, I am told that Janet is unavailable, and I am farmed out to her assistant.

The assistant, a summer intern, brings me up to date. "We all really love your trading idea. One small change, though. Instead of trading $100 million of fake money, we're going to trade $50,000 real money."

"Real money?" I repeat.

"Yes. Isn't that a terrific idea?"

"Has anyone on your staff ever traded before?" I ask, resisting an impulse to call my broker and short Cap Cities stock.

"No," he replies. "We don't care if we lose the money. It will be a good illustration."

"Let me get this straight," I say. "You want to lose $50,000?"

"It's not that we want to, it's that we're willing to."

"I see," I say.

"What do you think?" he asks.

"I think it defeats the whole purpose," I reply. "The idea was to illustrate the movements of large sums of money, to get a sense of how much risk the banks take. Fifty thousand dollars in this market is like a $2 bet at the track, less maybe. Also, there is no excuse for giving away $50,000 to a broker. If you insist on being charitable, give it to the homeless."

"I'll run it by Janet," he says.

July 1989, Lenox, my living room:

The intern is on the phone. "PrimeTime Live" wants to run a demo, a two-day shoot resulting in a five-minute segment to be shown internally at ABC. If management likes the story, they'll run it on the show. They have agreed not to use real money, but have decided to keep the $50,000 figure. They have also decided that they need a professional trading the money. Me.

"But I haven't traded in three years," I point out.

"That's all right. You'll be terrific."

I hear myself agreeing to do it. As soon as I hang up, I realize this is a terrible mistake.

In addition to not teaching anyone anything about the market, the segment is threatening to turn into a circus. There will be no going to Washington to ask about the regulation of the banks, and no in-depth analysis (or any analysis at all) of market forces.

Besides, losing $50,000 on national television will do nothing to help sell my book.

I call the assistant back and decline.

July 1989 (the next day), Lenox, my living room:

Janet Tobias calls me three times begging me to trade the money. Three times I refuse. But I do agree to sit down with Diane, to fill in whatever gaps may exist in her understanding of the foreign currency market.

Once again, I return to New York. As I enter the offices for the interview, a producer takes me aside and tells me not to worry as they have found a replacement trader and are already filming at Chemical Bank. After a short wait, I am ushered into the interview with Diane that culminates in the use of the paperweight and the ballpoint pen.

Having refused their request to trade the money, I walk away convinced that this is the end of my relationship with "PrimeTime Live."

I hear later that the replacement trader lost $36,000 on his first paper trade.

January 1990, Lenox, my living room:

Janet Tobias is on the phone, behaving as though we had just spoken yesterday.

"Nancy!" she says. "We're finally going to do this Wall Street piece. We've learned so much. You know, you were right. You can't really show very much using only $50,000." Before I have a chance to speak, Janet hurries on. "We've changed the concept a little, though. Instead of focusing on the market, we're going to focus on the people. We've decided to do just a straight journalistic piece, profiling you and Michael Lewis, the author of Liar's Poker, as the Wall Street representatives of the '80s."

A national television show that will reach tens of millions of viewers has just selected me as one of two people to epitomize an entire generation. Moreover, the producer has apologized for previous shortsightedness and seems to have been educated by my input. Regardless of the superficial nature of the previous proceedings, I am now being offered an opportunity to say all those things about the perils of the banking business that I believe the public desperately needs to hear.

How bad can it be?

January 1990, New York, Sam Donaldson's empty office:

With Janet off in France, Bob Wheelock, another producer, has been assigned to keep me company until Diane is ready to shoot my interview. During the delay, I am informed that, once again, the concept for the piece has changed slightly. Now, in addition to myself and Michael Lewis, they intend to interview another young woman who has just quit Wall Street, and they are desperately trying to book Tom Wolfe. I gather from this that I am no longer the focus of the piece, if, in fact, I ever was.

I ask a question that has been bothering me for some time. "But how is this live?"

Bob explains that the "live" concept ran into some unforeseen difficulties. For example, Bob had noticed an interesting article about a dying tree in Texas. He pitched it to his superiors, and they agreed to do a story about it. So he and a crew flew down to Texas where they proceeded, at great expense, to light the tree for a live broadcast. But when the time came to do the story, his superiors were furious.

"My boss was screaming at me on the phone," says Bob. "He keeps yelling, 'That's it? That's it?' And I keep answering, 'It's a tree. That's what trees do; they stand there. If we're lucky, it'll fall down, but I can't make any promises.' "

Now, Bob notes, nothing on "PrimeTime Live" is live.

An hour and 40 minutes later, Bob announces that they're ready for me. We walk into an office where two chairs have been placed facing each other, and a crew is busy setting up lights and cameras and microphones. I am directed to sit in one of the chairs, and the technicians begin fiddling with the equipment.

Diane comes in, nods a frosty hello, sits down in the opposite chair and begins to ask the first question. She speaks slowly, carefully, as though this is an idea that is occurring to her on the spot and she wants to get it just right. It would have been more impressive if she hadn't been sitting there with a typed list of questions in her lap.

"So, Nancy, what was it like to be a woman on Wall Street?"

"Well, Diane, I -- "


It is the cameraman. "Diane, you have a wisp on the right side. Somebody bring Diane a hairbrush and mirror!"

Bob scurries off and returns with the necessary equipment. Diane examines her reflection and then, with an expert flick of the wrist, gives the right side of her head two firm brush strokes.

She settles back into her chair. "Where were we? Oh, yes . . . So, Nancy, what was it like to be a woman on Wall Street?"

"Well, Diane, I -- "

"STOP! Diane, will you brush your hair in the back, please?"

Bob repeats his maneuver. Diane brushes the back of her head.

"So, Nancy, what was it like to be a woman on Wall Street?"

"Well, Diane, I -- "

"STOP! Diane, you have another wisp on the left."

Diane scrutinizes herself in the mirror a third time, frowns and raises her chin. "I like that wisp," she announces.

A short discussion ensues on the merits of this wisp. Diane wins.

The hair problem solved, the interview begins in earnest. The questions are general; so general, in fact, as to be unanswerable. "Why was there so much greed on Wall Street in the '80s?" Diane asks plaintively.

A number of responses along the lines of "Well, Diane, when you put a huge pile of money in front of people, most of them are apt to go for it," run through my head, but I don't say them. Maybe it is because her attitude is so obviously antagonistic, or maybe it is because she so obviously resents having to interview someone with my lack of celebrity, but suddenly I realize that I am not saying any of the things about the markets that I wanted so badly to say for 15 months.

Then it comes to me. Diane Sawyer is not interested in obtaining my analysis of the dangers inherent in the manner in which currencies are traded. What Diane is looking for is a statement that can be edited, clipped, snipped or otherwise taken out of context to inject something inflammatory into the segment.

So I try to watch every word (sometimes unsuccessfully) and find myself directing a good many of my answers toward my lap.

The interview goes so badly that afterward I grab Bob Wheelock by the arm and beg him to edit me out.

February 1990, Lenox:

They are not editing me out. Instead, they have sent a crew directed by a charming and personable man named Victor Gonzalez to film me in my natural habitat. I have agreed to this, hoping that the beauty and serenity of the Berkshires will somehow balance out the dreadful interview.

Victor, formerly a director with "Wide World of Sports," sets up the camera on Main Street and then gives me my instructions.

"Stand here," he says, marking off a spot on the pavement, "and then walk slowly and deliberately toward the camera. While you're walking, I want you to act serious. No smiling."

"No smiling?" I repeat. "Why?"

"It's not what we're looking for. Pretend you're thinking about something serious, like you're working on your next book."

For the next two hours, I parade solemnly in front of the camera.

March 1, 1990, Lenox, my living room:

After nearly 15 months in development, "PrimeTime Live" runs its story on the financial markets.

The timing could not be more fortunate, as the recent collapse of Drexel Burnham Lambert has threatened to take the entire multibillion-dollar junk bond market down with it. In addition, for those interested in investigative reporting, rumors abound questioning the cause of Drexel's bankruptcy and the decision to allow its senior officers to pad their personal accounts to the tune of hundreds of millions of dollars in bonuses, at the expense of the firm's customers and its own employees.

While my personal experience with the staff of "Prime-Time Live" has been less than encouraging, I try to remain hopeful about the outcome. With so much to work with, it is almost inconceivable that they could not put together a segment that is at least of minimal value. After all, what do I really know about television? Maybe the chaos that I had witnessed was merely the process by which effective news stories are developed.

At this point, "PrimeTime Live" runs a teaser and my face appears on the screen. To persuade viewers across the country to watch the show, the producers have selected a clip wherein I postulate that, in the largely male world of trading, the preoccupation with "big deals, big positions and size" might possibly refer to something other than simply money.

I moan audibly and reach for the brandy.

The segment, the second of three, is entitled "Masters of the Universe." (They have succeeded in booking Tom Wolfe.) The images on the screen could easily have come from the files of "Lifestyles of the Rich and Famous," with the camera lingering on aerial views of secluded mansions, and Diane's voice-over lingering on phrases like "awash in a sea of money." There is a clip from the movie "Wall Street."

The piece is devoted almost entirely to Michael Lewis, whose book is on the best-seller list; interspersed are brief clips of Wolfe, the other woman trader and me. Wolfe recalls passages from his novel, and the other trader describes having baloney spit on her while trading. For my 30 seconds, the show repeats the "big deals" quote and includes a second snippet in which I discuss my initial lack of experience.

I pour myself a second glass.

The $50,000 paper account has been upped to $20 million, which Lewis has spent the last month trading. He is shown on a beach in Cancun, Mexico, with a cordless phone in his hand, betting on everything from soybeans to the Japanese stock market. He makes $2 million on the first trade, which was in bonds, by contacting unidentified "friends" on Wall Street, an effective, if unwitting, illustration of the principle of insider trading. (In fairness, this is standard practice in the international bond, currency and commodity markets, where the insider trading statutes do not apply. "PrimeTime Live," however, misses the significance entirely.)

After four weeks, despite this initial success, Lewis has managed to lose $1.7 million. Diane is apologetic, explaining that, in the final weeks, he was not paying as much attention to the market as he might have if he were still on the street. Lewis smiles at the end and says that, in any case, he would have generated $70,000 in commissions for his firm in just that one month.

This is the full extent of market analysis.

At the end of the segment, Michael Lewis is pictured squinting into the Mexican sun, the other woman is seen strolling near Tiffany's, and I am shown scowling into the camera in Lenox.

Wrapping up, Sam turns to Diane and says, "What about it, Diane? You're the expert now. Is the party over for kids like Lewis and the customers?"

"I'm hardly the expert," Diane demurs, lowering her eyes modestly, and glancing down in the direction of the ballpoint pen in her right hand.

I look for the paperweight, but it is nowhere in sight.

Nancy Goldstone is the author of Trading Up. Her novel Bad Business will be published in the spring by Faber & Faber.