Here's an interesting piece on the market from today's Financial Times. It says that "high rates of clinical depression may be taking their toll on share prices."
How brokers with the blues may add to market miseries
By Joshua Chaffin in New York
Published: March 7 2002 20:59 | Last Updated: March 7 2002 22:34
It should come as no surprise that many stockbrokers are as depressed as internet share prices. In the last 12 months they have seen a collapse in the market that provides their livelihood and then a terrorist attack aimed directly at their friends.
More remarkable, though, may be that stockbrokers were far more depressed than the general population even before the champagne ran out.
According to a forthcoming study, clinical depression was more than three times higher in male stockbrokers between the ages of 22 and 32 than other men in the late 1990s.
"It's amazing to think how much suffering there is right now, but the symptoms of major depression existed well before September 11," said Alden Cass, a doctoral student in clinical psychology who conducted the study.
Mr Cass believes his findings should interest not only stock brokers but all concerned about the health of the market.
Retail brokers, after all, play a key role in attracting the new money that helps push up share prices. When they feel down, the volume of sales calls they make to potential investors can fall by as much as half.
In essence, the market becomes sad. Mr Cass stumbled on the topic at graduate school in 1999. Talking to a friend who had joined a Wall Street brokerage, he noticed his old college buddy had grown terse and had developed a habit of swearing. "Over six months, this guy was starting to sound an awful lot like my patients," Mr Cass recalled.
Combing scientific journals for research on the mental health of Wall Street, he found almost nothing.
One reason, he discovered, is that Wall Street brokerages are not places where people are encouraged to talk about their feelings. Mr Cass asked a number of businesses to participate in the study and was repeatedly rebuffed.
"Because of the lack of co-operation, I had to become like a stockbroker myself and start cold calling these guys to get them to talk," he said.
Mr Cass began cultivating stockbroker friends. He would down beers with them on Friday evenings to learn their ways. Eventually he had recruited enough brokers to form a sample group. What he found amazed him.
Predictably, many brokers showed manic symptoms. They slept little. They had delusions of grandeur. They took risks, spending recklessly and abusing drugs. "They could do no wrong. That was the mindset," Mr Cass said.
But at the same time, they were deeply sad. Between their highs, many felt emotionally distant from friends and co-workers. They suffered from anxiety and fatigue. They had excessive guilt and were plagued by thoughts of suicide.
Mr Cass found that 23 per cent of his sample tested positive for clinical depression compared with 7 per cent of men as a whole.
The study confirms that a bull market brings unique stresses for brokers - chiefly the unrelenting pressure to make ever greater sums for their clients.
"A lot of these people base their entire identity on making money," Mr Cass concluded.
Greg Manto, a 31-year-old former retail broker, remembers the go-go days less than fondly.
"My stomach used to turn where you wanted to throw up from ulcer attacks," he recalled.
"You're never proud of yourself. If everything is going up 15 per cent one day and you only make 10 per cent, you get a lot of grief."
Spurred by September 11 and wide-spread lay-offs, Wall Street has begun to examine its psyche. The Federal Reserve Bank of New York has invited Mr Cass to speak next month at a brunch for bank branch managers.
The Securities Industry Association recently co-hosted a seminar with Mr Cass and his colleagues from Saint Lukes-Roosevelt Hospital in Manhattan to discuss depression on Wall Street. They highlighted the warning signs and explained how brokers could minimise their risks.
"We thought it would be a good idea if we could reach out to what has traditionally been a very reticent population," said Dr Richard Rosenthal, chairman of psychiatry at Saint Lukes-Roosevelt.
Sadly, the event may have done more harm than good. During the question-and- answer session, brokers skipped the psycho-babble to hound Doug Cliggott, the former JP Morgan Chase strategist who was a panellist, for investment tips. Mr Cliggott put on his best bedside manner, then told them he expected the Nasdaq index to fall below 1,000 this year. |
