To Live and Throw Up on Wall Street: Diagnosing Brokers’ Depression

The markets have

crashed; the buyers are in retreat. Merrill Lynch and Morgan Stanley both

announced cutbacks in their retail stock-flogging ranks. Analysts like Morgan

Stanley’s Mary Meeker and Merrill Lynch’s Henry Blodget have been named in

class-action suits filed by investors.

Retail brokers, the weary men on the front lines, have lost

their clients’ money-as well as much of their own-and now are getting sued by

their customers, who, it seems, hate them.

But Alden Cass doesn’t hate them. Mr. Cass, a candidate for

a doctorate in clinical psychology, aspires to be the Frasier Crane of the

broker set. He hangs out with brokers, does the club scene with them, even takes the odd flyer on a penny stock or two. With his

slicked-back hair, briefcase and deep summer tan, he even looks like a broker.

But the 25-year-old New Yorker is pursuing his doctorate by

trying to quantify the depressive tendencies of retail stock brokers. His

theory is: Brokers may be more vulnerable to clinical depression than the rest

of us.

“A lot of these guys have manic-depressive personalities

that are enhanced by the volatility of the market. They also lack the insight

or the coping skills to deal with the stresses of the market,” said Mr. Cass.

“As a result, it’s natural to find higher levels of depression amongst them.”

He said he thinks he has the empirical evidence to support his case.

Two years ago, preparing for his doctorate  in clinical psychology at Nova

Southeastern University

in Fort Lauderdale, Fla.,

Mr. Cass interviewed 26 brokers, age 22 to 32, from seven major Wall Street

firms. He got his brokers into a room and asked them a series of professionally

formatted questions in order to gauge the extent of their blues:

I blame myself for

everything bad that happens; I am critical of myself for my weaknesses or

mistakes; I don’t get satisfaction out of anything anymore; I worry that this

job is hardening me emotionally; I have trouble going to work in the morning.

The questions were

clinical and scientific, used to determine the extent of a patient’s

depression. The results of his survey, published in association with Nova

Southeastern under the supervision of Professor John Lewis, showed that 23

percent of the brokers interviewed met clinical standards of major depression,

meaning that they might require professional help or medication, and 38 percent

met subclinical levels of major depression, suggesting that they would benefit

from the services of a mental-health professional. Granted, his survey sample

was small, but 23 percent seemed a compelling figure to Mr. Cass, considering

that research shows only 7 percent of American males suffer from depression.

Currently interning at St. Luke’s-Roosevelt Hospital, Mr.

Cass was drawn into the stockbroker’s world out of curiosity. Wondering why

many of his broker friends from college seemed morose and frazzled, he started

doing the happy-hour rounds at downtown bars like Moran’s, listening, observing

and eventually persuading a bunch of brokers to participate in his study.

His brash, fast-talking demeanor and willingness to drink

with them helped win their trust. Before long, they were his subjects in a

conference room, answering 100-odd questions- My sex life is not as good as it used to be; I find myself using

obscenities at work -in some cases, even breaking down in tears. A few

became friends after the survey was finished and have kept in touch.

One of his subjects was Ned Merrill-not his real name-a

30-year-old with a wife and a brand-new condo in Brooklyn.

Each day he reports to his Wall Street office at 7:30

a.m., flicks on his computer screen and starts on the 100 calls he

will make to doctors and lawyers around the city. There was a time when he made

600 a day.

He doesn’t want to make the calls-nine out of 10 will hang

up on him-he hates doing it, in fact, but times are tough; for the first six

months of 2001, he didn’t take home one penny. In 1999, he made $500,000 in


“Except for my mortgage, I’m behind in everything,” he said,

his tone matter-of-fact. “I’ve liquidated every investment I’ve ever had; I’ve

got $25,000 in credit-card debt, and now I’m dipping into my 401(k). Two years

ago, it would have meant nothing to me to be walking down the street, see a thousand-dollar

painting and buy it, just because I liked it.”

These days, there are no paintings, just nightmares. “I’ve

been having them every day,” he said. “It’s been driving me crazy. One time,

our dog attacked us, then a neighbor came in through the terrace and a close

friend came crying to me that he was depressed. I get about three hours of

sleep a night. I wake up with eye twitches, neck twitches, everything

twitches.” He has also developed a bad case of eczema, with his skin frequently

breaking out in a hot, itchy rash.

Indeed, most days, when the full force of another bright,

shiny day shakes Mr. Merrill from his fitful slumber, he would prefer to spend

the day in bed. But he gets up and goes to work. “I have palpitations every

day,” he said. “Yeah, for the most part I’m depressed.” His voice was low and

heavy. “It’s not really myself that I hate, it’s my

life. I hate my life. There always seems to be something.”

Now that the great bull market has withered away, the buyers

feel snookered and the salesmen have nothing left to sell. Currently, the vogue

is to blame it all on your broker-that sweet-talking dream peddler who made the

giddy case to you that a position in JDS Uniphase at $140 would set you up for

retirement. Now, with JDS at $10, you hate his guts and want to sue him. You

can’t even get him on the phone anymore. Well, there’s a reason he’s not taking

your calls: His pain is greater than yours.

“These guys are blaming themselves for the market correction

and for picking the wrong stocks,” said Mr. Cass. “It’s the cognitive theory of

depression-negative thoughts will lead to negative emotions. If you really

think, ‘I’m a horrible person because this stock went down,’ that’s irrational

behavior, and that’s when the depression hits.”

Ned Merrill remembers when the market turned on him: It was

April 2000, and he had piled all of his and his clients’ money into ICG

Communications, Global Crossing and Healtheon, now WebMD-all bull-market tech

stocks, their charts straight arrows pointing to the sky. When his world

started collapsing around him, his pain was physical, a churning in his gut.

Sitting there in his coat and tie, his screen blinking red, his stocks plunging

10 percent a day, the screams and yells of his margined-to-the-eyeballs clients

pounding in his head, he got sick.

“I was throwing up in the garbage pail right by my desk,” he

recalls. “You have to realize: This was not like Intel going from 40 to 20. At

least then, you still have the stock. My guys were on margin-their stocks went

to zero and they still owed $10,000. You try telling a client whose stock has

gone to zero that he still owes 10,000 bucks. That came off me.”

In the 18 months since the tech bubble popped, many of his

clients either deserted him or filed suit against him. 

Brooklyn-born, he has been a salesman since his freshman

year at Baruch College

and has sold everything from subscriptions to The New York Times to porn videos. Selling stock is what he does.

“I’m a good salesman,” he said. “I understand it. And you know, even when you

are depressed … you just put on an act. There is a reason that Cats played for so many years. You don’t

think those actors ever got sick of it? I know that I’ve got to do the same

thing every day.”

Mr. Merrill pays the rent and utility bills for his mother.

His wife is on disability and his expenses run to $5,000 a month. Since he’s

paid no fixed salary, everything must come from commissions. “Crazy things go

through your head,” he said. “Like trying to hurt yourself

and go on disability.” How about suicide? He paused, taking some care

with his words. “I think about it, like how I would do it-it would probably be

pills, not the Verrazano Bridge-but

it always leaves my mind. That’s a quitter’s way. It took me a long time to get

where I am. Doing that would make me a real loser.”

Mr. Merrill tries not to bring his angst home. But sometimes

he will crack. “Your fuse gets short,” he says. “If my wife starts talking to

me about some stupid TV show or a recipe, I can go nuts. But I try not to be

like my father. When he wasn’t making money, the whole house felt it.”

Ned Merrill is no pump-and-dump boiler-room smoothie looking

to make a quick buck. All his clients have his home number, and he’s fielded

their late-night calls as they wept over their wiped-out portfolios. Although

he wanted to make his and their lives a bit better, he would always tell them:

The market is a strange beast; there are no guarantees. “Look, I don’t have one

bad mark on my brokerage license, and I never will,” he said. “But every day

now, someone is threatening to sue me. And you know what? I still don’t know

what’s wrong with losing money …. [I]n this business, you are

allowed to lose money.”

Should we worry about Mr. Merrill? Mr. Cass, who speaks to

him about once a month, said no. “Ned is not a risk, although his quality of

life is certainly suffering,” he said. “But he is married …. It’s all the other

guys who are self-medicating through drugs and alcohol-those are the guys I

would worry about.”

And as for Mr. Cass, he’s still a customer of Mr. Merrill’s.

“Ned got me into this stock at around 6 and said it would go to 20,” he said.

“It’s around 1 now. He’s still my broker, though, even though the stock was

garbage. You have to take responsibility for your own decisions.” To Live and Throw Up on Wall Street: Diagnosing Brokers’ Depression