Author Interview: Diana Henriques

The Wizard of Lies | Diana B. Henriques | Macmillan

Diana Henriques is the bestselling author of The Wizard of Lies, a compelling non-fiction account of the largest Ponzi scheme in history.

The title places a necessary spotlight on Bernie Madoff, the mastermind behind the malicious scheme which ran for decades.

The total value of the fraud was initially reported by authorities as $65bn, although when measured as the true loss of cash, it is estimated as $10bn – $20bn. Given the monumental scale of this financial crime, it won’t surprise you to hear that Bernie was sentenced to 150 years in prison.

The Wizard of Lies also highlights accounts of staggering incompetence on the part of financial regulators and tells the stories of frustrated whistleblowers who attempted to raise the alarm over many years leading up to the collapse of the fund. We’ve ranked The Wizard of Lies as the #3 best financial crime book of all time.

A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History by [Diana B. Henriques]

Diana is also known for her account of the 1987 crash in A First-Class Catastrophe, a piece of financial history telling the tale of one of the worst crashes in financial market history. It has earned a 4.6/5.0 average review on Amazon, where you can pick up this title and engross yourself in the turmoil of Autumn 1987.

What makes this title such a compelling read is the mystery of the event. The 1987 crash was entirely unexpected, and even with the benefit of hindsight, experts struggle to point to the trigger which unleased this financial havoc.

Over the course of a few days, $1.7 trillion dollars were wiped off financial markets worldwide.

Diana Henriques is a serial financial journalist who has penned several other titles which may interest you:

Diana writes within the following genres:

She was kind enough to provide interview responses to our outreach earlier in the year, so I’m delighted to share this interview with you below. If you’d like to follow Diana, her Twitter handle is @dianabhenriques

Interview with Diana Henriques

Diana Henriques

1) Please could you tell us a little about your professional background and why you felt inspired to write the book?

Diana: I am almost a “lifelong” journalist — I got my first newspaper byline as a teenager and retired from The New York Times as a 60-something — so writing is second-nature to me. But financial journalism wasn’t! When I shifted into that field in 1985, I had to educate myself about how markets worked and learn what had happened in the markets before I got there. That self-education process gave me a passion for financial history; in one way or another, all of my books fall into this category. But I was particularly inspired to tackle the 1987 crash for two reasons. First, as its 30th anniversary approached, we were on the brink of losing the living memories of those who experienced the crash firsthand. Second, the 2008 market meltdown revealed how profoundly relevant the lost lessons of the 1987 crash really were, and I wanted to restore those lessons to our collective memory as investors, and as citizens.

2) In the course of researching and writing your book – did you come across anything that surprised you? 

Diana: I think the most surprising thing was how unreliable personal memories were. Time and again, I’d sit down with someone who was sure they remembered the 1987 Crash vividly – unforgettable moment! indelible memories! – but who was actually mistaken about much that had happened. Some of this was just the “vantage point” problem; people knew their little piece of what had happened, but not the larger story it was part of. But most of it was just unconscious revision, stories that “felt right” in light of later events but that were contradicted by the factual record. The most common “broken memory” was about the consequences of the crash. The conventional wisdom was that Black Monday was an unimportant blip, that the market quickly rebounded without any economic damage. And that was totally incorrect! The market didn’t recover its pre-crash peak for two years, and it experienced sudden terrifying nosedives for months after October 1987. Indeed, there was another so-called “mini-crash” almost exactly two years later, in October 1989. And while there was no national recession, financial centers like New York, Boston and Chicago went through local recessions because of widespread layoffs in the financial sector. I used to joke that my audience consisted of those who didn’t know anything about 1987, and those who thought they knew all about 1987 but were wrong!

3) For budding financial writers, what is the one piece of advice you would give to those writing to educate beginners about finance?

Diana: Make it real! When you think about it, finance is as close to our everyday lives as you can get. The world of finance and business determines where we shop, what fashions we wear, what movies we see, what appliances we use, where our homes are and what they look like, even who our neighbors might be. Forging that link between finance and the personal lives of readers is the most important task financial writers do. (I once jokingly argued to some newsroom interns that financial news was far more important than sports news or political news because we personally never make any professional sports decisions and only rarely make political decisions — but we make financial decisions Every. Single. Day.) 

4) What else do you have going on that you’d like our readers to know about?

Diana: I am happily working now on a book for Random House about the creation and early days of America’s chief Wall Street watchdog, the Securities and Exchange Commission. For too many years, I’ve listened to folks demanding financial “deregulation.” I realized that nobody calling for deregulation today has any idea what a market without regulation is actually like — a market, for example, like the one that galloped through the 1920s and tumbled into the Great Depression. Those who set out to regulate Wall Street in 1933 actually did know how unregulated markets worked, and it was a very ugly picture. Telling the story of why we first decided to regulate Wall Street will, I hope, help make the case for why we need to continue to regulate Wall Street. The publication schedule, like everything else, has been upended by the pandemic, but I’ll keep you posted!

5) And finally, I like to ask all authors; when saving and investing your own money, what is your preferred investing style?

Diana: My watchwords are diversification and simplicity, steering toward income-producing stocks and high-quality bonds (both individually and via mutual funds) while keeping the jib up to capture some capital growth in calmer seas. I don’t invest in anything I do not understand, I don’t give anyone discretion to trade in my account without my say-so, and I never invest with friends or family members. (I call those my anti-Madoff rules!)