The Rumor Mill

Spreading of rumors on Wall Street is fast and furious. They appear in all sorts of shapes and sizes. Here are three from which you might learn.

1) A "bitch"-in party
A couple years ago some girl who was interning at a major i-bank decided to throw herself a party at a ritzy hotel. I don't know the girl, but I did see the invite for the party. This girl sent this party invite out to a set of friends (probably around 40). The invite included an assigned arrival time so as to stagger the arrivals of friends, suggested gift prices, dress code, and all sorts of other unnecessary details. It was quite amusing reading the obsessive nature of this girl and how obviously the party's details were going to fail (and be ridiculed). This invite note ended up being forwarded to everyone on the street (yes, EVERYONE). I don't know if too many people went, but it became quite a famous fiasco. It even got a mention in a newspaper (I believe the newspaper was in Hong Kong). So if you're throwing a party, try not to make the invite ridiculous. You could end up with street infamy.

2) Moving Markets
Just today a broker called me to tell me about a rumor going around about Goldman making an announcement after the close that they expect a negative Q3 earnings. Right around that time the bond market skyrocketed and the equity market tanked. One minute later Maria Bartiromo mentioned on CNBC that she heard from a trader that one of the big banks would be making an earnings comment after the close. Yet one minute after that she announces that Goldman is denying the rumor that they would make such a comment. Bond markets tank again and the equity markets fly back to their highs. It's amazing how a rumor like that moved markets so quickly in both directions.

3) Top Recruit
Some guy with a Russian sounding last name who went to Yale sent out the most ridiculous paper and video resume to the street. The resume circulated the entire street. He ended up on MSNBC and some newspapers due to the ridiculous nature of the claims. On the resume he had cited a non-profit that he supposedly founded and runs (no one could find it, although it did have a defunct website). He taught several celebrities tennis. He was some sort of hitman or something (don't remember the details on that one). He claimed more ridiculous stunts than any sane person would bother. In the end, everyone knew he was a fraud. In fact there were articles on msn.com, a couple newspapers and other semi-mainstream forms of media about him. I have a feeling this guy never got a job on the street (let me know if you know him and I'm wrong).