Norb Vonnegut: Wall Street Expert and Author of “The Trust”

Exclusive interview with Norb Vonnegut, Wall Street expert and widely acclaimed author of “The Trust.”

John Nyaradi: Hi everyone, I’m John Nyaradi, publisher of Wall Street Sector Selector, a financial media site specializing in exchange rate of funds and global markets, economic analysis. Today, I’m really pleased to welcome our special guest, Norb Vonnegut. Norb, welcome to Wall Street Sector Selector.

Norb Vonnegut: John, it’s great to be here. Thanks for having me.

John Nyaradi: Norb is the author of a new financial thriller called “The Trust,” just out in July, 2012. He’s a cousin of the late Kurt Vonnegut and is a former Wall Street insider who has appeared on Dylan Ratigan, Bloomberg News and The Laura Ingraham Show, among others. He has written 7 novels that have been popular hits, he’s a former financial professional with Morgan Stanley and holds a Harvard MBA.

So Norb, let’s start out with “The Trust.” You say it’s a good beach book. Why did you write it? What can people get out of this?

Norb Vonnegut: Well, John, two words: Pablo Escobar, and you’re probably wondering what’s the meaning of that? Here’s the story. Before there was Google, my team worked at Morgan Stanley and we had a big business. I think at our high point, we were $10 billion, but we averaged around $2 billion in assets under management, and we used to go out and look for clients, as stockbrokers do. One time, one of my partners got a call from a fellow who said, “Well, I’ve heard good things about you and about your team. I want to invest $50 million with you, and if you do a good job for me, there’s more money behind it.”

Now, I can tell you, John, that never ever, ever happens to a stockbroker. We had a huge business, but I never got a call from somebody other than this one where they wanted to turn over $50 million because they’d heard good things. It just doesn’t happen. So my partner met this fellow and it turned out he was Pablo Escobar’s first cousin. And I thought, “Oh wow, it would have been so easy to open an account with him and not knowing he was Pablo Escobar’s first cousin and then become embroiled in the “what-if” of some really awful things.

So through the years, I began thinking about what might happen if a fellow like this, instead of picking on a Morgan Stanley or Goldman Sachs, went to some charities with whom we did business? You know, the thing about family foundations is there’s always a lot of money around, but they operate on shoestrings. Wouldn’t it be reasonable for the bad guys to move to a different kind of vehicle, one with fewer defenses, one that’s more vulnerable? And so I wrote “The Trust” and it’s a story about some international villains who infiltrate a small, not-for-profit organization in Charleston, South Carolina. That story is what prompted me to write the book, that real life story.

And what I would say, John, is that my job as a stockbroker is not much different than my job as an author. You know, when I was a stockbroker, I used to ask. “what can go wrong?” I was always trying to figure out what can go wrong and that is what I was trying to protect my clients from.

Now as an author, I ask the same question, what could go wrong, but the difference is I’m trying to take readers on a roller coaster ride into a really dark place, and when they finish the novel, hopefully, they’ll say, “Boy, am I glad that’s just fiction.”

John Nyaradi: Let’s talk about the good guy and the bad guy, so who’s the good guy, who’s the bad guy?

Norb Vonnegut: Well, no surprise. My good guys come from Wall Street and so do my bad guys. My good guy in “The Trust” is named Grove O’Rourke. He’s a reoccurring hero in my stories and I’m going to use him in future stories.

Grove is an ordinary guy who tries to do the right thing. He’s just a guy who is swept away by things that are bigger than he is, and somehow, whenever trying to do the right thing, he prevails.

John Nyaradi: What’s the story line?

Norb Vonnegut: Every novel that I write starts with a big idea, and in “The Trust,” my big idea is that some really bad guys hide behind the First Amendment. Now the First Amendment is usually thought of as freedom of the press, but it’s also about freedom of religion and it’s very hard to prosecute folks in religious organizations.

John Nyaradi: Tell us about yourself, your Wall Street career, and the second part of this question, how do you make the jump from Wall Street to bestselling fiction writer?

Norb Vonnegut: Well, I could say I’m answering the same question, “what can go wrong,” and it’s the same question I asked as a wealth manager and also as an author everyday. I think one of the reasons that compelled me to make a jump is that so many of my clients came to me and said, “Hey, you really should write a book,” because as a stockbroker building my business, I used to tell people stories about Wall Street, and they loved my stories. I lived in an absolute soap opera 24/7 while I was in the business and so those stories show up in my books and I’ve got enough material to write about for the next 50 years.

John Nyaradi: You have a famous cousin, Kurt Vonnegut. Could you just chat for a second about him and your impressions and memories?

Norb Vonnegut: Kurt was not part of my childhood. I knew him as an adult. He is a source of inspiration every way that you might imagine, and was just a really good, good guy.

John Nyaradi: Norb, the saying goes that truth is stranger than fiction, and as we look today at the LIBOR scandal and the MF Global scandal and on and on and on, how do you relate to all this and what’s your take on today’s situation in the financial world?

Norb Vonnegut: Well, I’ve got to tell you, MF Global is terrifying to me. That is one scandal that I hope the regulators really get to the bottom of. One of the mainstays of our advisory business was that we, as money mangers, could never ever invade the custodial relationship and have access to client funds. And so as I look at what’s out there, I think it’s the fear of the unknown that is always the greatest fear. I mean what’s going to surprise us from out of the blue?

John Nyaradi: Norb, I’d always like to end these discussions with kind of an open-ended question, and you know, what’s the one thing at the top of your mind right now? We’re talking with a group of investors here in the summer of 2012. What should people be watching out for? What kind of keeps you awake at night as you look out over the next few months for the global and US economy?

Norb Vonnegut: What really keeps me up at night is leverage, and here’s the thing. Traders are always going to be ahead of regulations, okay, and if you look at what’s happening in the markets right now, you see a mass exodus of really talented people from Wall Street over to the hedge funds. And at the hedge funds, there’s far less regulation, and there is the ability to really lay down some huge, huge debts, just off the charts. And so I don’t know exactly what will be out there, but I can only imagine that at some point, a trader will take a massive bet that will go down in money management history. So I’m worried about those bets because the regulators have not kept pace with the hedge fund industry, nor do I think they can.

John Nyaradi: Well, folks, we’ve been talking with Norb Vonnegut. He’s the author of the new financial thriller, “The Trust,.” He’s a former Wall Street insider and this is a terrific summer read that’s already getting great reviews. It’s a hot seller at amazon.com and recently Janet Maslin, highly regarded book reviewer for The New York Times, called it “money porn” and said that Norb is now “three for three in his own improbably sexy genre.” His books have received great reviews from Kirkus, Bloomberg and Forbes.com and Norb has been called “the Nelson DeMille of financial thrillers.” “The Trust” is certainly a great book to take with you to the beach, your summer vacation or next airline flight.

To learn more about Norb and his new book, “The Trust,” just click on the link at the bottom of this interview.

Norb, it’s been great chatting with you. Thank you so much for joining us. I know we’re all looking forward to talking to you again really soon.

Norb Vonnegut: Thanks, John

(recorded interview, edited for length and clarity)