Steinhardt recently published a book aptly titled "No Bull: My Life In and Out of Markets" (John Wiley & Sons) in which he candidly talks about his humble beginnings and his early fascination with the workings of the financial markets. His career was launched early when his father, an unpredictable gambler with both feet planted firmly on the ground, gave him some shares as a bar-mitzvah gift. Perhaps Steinhardt saw a parallel between the fluctuations of the markets and those of his father's fortunes. And perhaps because he found he could exert some influence at least over the former, his fascination never waned, his enthusiasm never wavered.

"Suddenly being given this gift by my father who himself knew nothing about the stock market--a gift whose value dwarfed anything I had known at that time--created a considerable stir in my life. It gave me substantial motivation toward becoming sufficiently knowledgeable to deal with that gift of more than $5,000," Steinhardt said. But that was only the beginning. "What created the passion for me," he continued, "was the strange combination of the intellectual, the cerebral aspects of investing in the stock market and the absolutely base aspects of gambling."

His father's gambling created "a natural course for me to be intrigued by gambling as well," said Steinhardt. "I was fortunate that the gambling instinct, instead of finding its way to the sort of things my father did--card games and Las Vegas and horse races--found its way to something that had the potential to be entirely constructive." He had always known the markets were a gamble, "subject to a range of uncontrolled variables that are very similar to gambling." But there are differences, he qualified, "in that you can apply judgment, you can through experience, wisdom, energy and information probably considerably improve your odds, while the odds in Las Vegas-type gambling are fairly insurmountable."

His fascination with games of chance having found a legitimate outlet, Steinhardt went on to make a lot of money in the financial markets. He anticipated the market downturn in the early 1970s and profited from having shorted the stock of several companies in the Dow Jones Index. Much though he was admired for his financial acumen, he was, predictably, vilified in equal measure because the practice of shorting was still despised at the time.

Steinhardt's losses were as spectacular as his gains. He miscalculated the effects of the crash of 1987, and lost again in the mid-1990s when the European bond market collapsed. In 1995, with his company, Steinhardt Partners, facing investor lawsuits and regulatory scrutiny for manipulating the bond market, Steinhardt decided to settle the lawsuits and close down the company. He had identified with it too closely to be able to turn it over to someone else.

He now seems to take a less aggressive view of what constitutes acceptable investing practices. "I feel that the last few years, with the hindsight of history, will be seen as a moment when there was an extraordinary transfer of wealth from the outsiders to the insiders, and it was not random," he said. "It was a peculiar outgrowth of unfettered capitalism that held as its highest virtue free markets and blithely assumed, without much thought, that there was regulation in those markets to prevent the regular, almost predetermined deceptions that existed in this period. But, even worse perhaps, these deceptions, this transfer of wealth, were something that was engaged in by almost all the established institutions on Wall Street who underwrote absurdly speculative enterprises and happily sold them to whomever. In the end it seems to me that they bear some responsibility. There cannot be so much Caveat Emptor."

Was there collusion between the underwriters and the companies coming to market? "The word 'collusion' suggests that both the underwriters and the insiders in these companies knew that they were selling junk," Steinhardt said. "I think in the deepest sense they truly did. But one can't but acknowledge that everyone was caught up in the immediate mania. And what line does one cross between selling speculative technological excitement and selling overpriced junk?" He does not think that the American business world will emerge unscathed from these excesses. "It is not a matter of prosecuting three guys from Enron and WorldCom and four or five other companies, and a righteous Republican administration saying 'See, we found the evildoers!' and life goes on," he said. "I think there was a fundamental change in a number of relationships over the last ten, twenty, forty years. One of them was the responsibility of corporate executives to shareowners, and that responsibility, it seems to me, was dramatically diminished by much that went on during this period. Excess compensation, the ludicrous pay packages to executives, the willingness of company boards to allow dramatic insider selling while at the same time reassuring the public that everything is fine--thereís something wrong with this."

Steinhardt had not seen the market downturn coming when, in 1995, he wrapped up Steinhardt Partners. "But I think that I and many others knew in the deepest sense that the excess speculation of the late 1990s would have its comeuppance," he said. "The prices that were being paid in the late 1990s, particularly for technology--it was crazy." He also wonders what might have been had he stuck it out through the days of "irrational exuberance" to the return of the bear market. "Because I, relative to perhaps anyone I knew, had more courage and more stubbornness--I wonder if, knowing that those stocks were overvalued, I would have had the determination to have swallowed hard, accepted the pain and continued shorting them."

These days Steinhardt devotes his time, energy and considerable resources to causes close to his heart that mostly relate to preserving the Jewish identity. "I wanted to create a renaissance in the next generation of non-Orthodox Diaspora Jews, meaning Jews outside of Israel who are relatively secular, who were the most vulnerable to the broad trends of secularization and integration in the Western world," he said. Steinhardt believes that Jews, who represent only a very small percentage of the US population, are increasingly at risk of losing their identity. "For all sorts of reasons, Jewish demography is not strong. We have not had high birth rates, and when there is intermarriage in a society that is overwhelmingly Christian there is a relatively high likelihood that the grandchildren of the intermarried couple will take on the identity of the dominant societal religion."

Unusually, the Jewish identity that Steinhardt would preserve is not defined by religion. "I am an atheist," he said, careful to make the distinction between agnostic and atheist. "What is special for me, what I choose to preserve, what I cherish about the Jewish experience are the values of the Jewish people that have endured for thousands of years, and which I think are responsible for the fact that in most Western societies Jews have made contributions enormously beyond their number. And I don't think this is social Darwinism suggesting that because Jews were always victims, only the smartest survive. I don't believe that Jews are somehow inherently superior, and I don't believe we are the chosen people of some supernatural power. The only way I can explain the special quality of Jews relates to the qualities, the values that have been distinct--though not unique--to Jewish people over a long period of time. As the most obvious example of this I would use education. Jews have devoted more time, energy and money to education than any other people, and it's not only true today. Education is a supreme Jewish value," Steinhardt said, lapsing briefly into an off-key rendition of Fiddler on the Roof. "If I were a rich man, la-la-la, la-la, la-la," he sang, "remember that song? What would he do if he were a rich man? He would sit and learn by the ancient wall. Learning--that was the greatest value."

Steinhardt sees philanthropy or charity, "the responsibility one has as a member of a community for the weakest or least able members of that community," as a value essential to the Jewish identity. Ever since he gave up money management, he has taken his own responsibility to the community very seriously, and not merely to redress prior neglect. Because he admires initiative and achievement, he seems to believe in helping those who help themselves. He said that Jews have always done well in meritocracies, in societies that reward personal achievement, adding "probably the single best society for Jewish success is the United States, it's probably the most meritocratic society I know."

Steinhardt does not see being Jewish as an accident of birth. To him, it is a matter of choice. "I would regard anyone as a Jew," he said, "if he or she voluntarily chooses to identify his or her future with that of the Jewish people--regardless of lineage, regardless of anything else." He follows closely developments in the Middle East. "I start with the not excessively humble statement that I pay a great deal of attention to circumstances in the Middle East and have as good sources as anybody," he said. "But, in the end, we all seem to depend largely on the same sources, we all carve our opinions from the New York Times and a few other sources."

Steinhardt has thought a great deal about the seemingly intractable problems of the Middle East and he now believes that Saddam Hussein should be removed, "militarily, if necessary." He is of the opinion that a change in Iraqi leadership would act as a warning to "these terrible non-democratic regimes that have prevailed for so long, and I feel very strongly that this is a risk worth taking." Risk would be the operative word here, of course, and Steinhardt knows it. Is he afraid that Saddam might use any nuclear capability he may have if he feels cornered? "The thing that I do fear because it is so obvious is that if he [Saddam Hussein] has an opportunity to respond offensively against such an attack, his first and easiest target will be Israel. Having said that, I know what the leaders of Israel wish knowing full well their vulnerability, and I concur in their view that this is a chance worth taking," he said. But he clearly struggles with this, hesitating, wishing perhaps that there might be a less martial solution. "The sense one has is that things are not getting better--it's hard to imagine a circumstance under which he'll become a pussycat, and if he doesnít have nuclear weapons now, he's certainly moving in the direction of getting them."

How does someone so knowledgeable about the workings of the markets see the "aid vs. trade" debate in sustainable development? "In an ideal world," Steinhardt said, "what you'd want in developing countries is that there should be a developed entrepreneurial class, educated in the West, that would go back and take responsibility for development in a disciplined and focused way. Think about the number of foreign students today in Western schools. Trade is perfectly fine, but if that implies that it would be foreigners who are ultimately making the important national decisions, then that would almost be another stage of colonial power that would breed resentment."

The door to Steinhardtís office opened silently and an assistant came in with a reminder of his next appointment. In the reception area, a woman who has been much in the news this year was waiting to see him. She was not there to ask for money--she came to ask for his advice. Steinhardt's turbulent career has given him the experience and the resources to make a difference. He is trusted because he is candid and often blunt in his approach. Perhaps not a man of faith, he is, more importantly, a man of good faith. And he is generous with his advice and his help--if he believes they will be used in a good cause.