He was the Pied Piper, playing a tune too good to be true. Michael Milken led corporate raiders, companies, investment houses, mutual fund firms, savings and loans and investors down a fanciful late-1980s road to near ruin.

If you invested in a junk bond mutual fund the past couple of years, you know that 1990 has been a disaster for your money. If you worked at a company that was ripped apart through a junk bond takeover or restructuring, you know what it's like to fear for your job. If you're nervous about recession, you can be sure that it will be deeper due to the junk bond fallout. If you're looking to buy a home, you may experience a harder time finding a mortgage because so many S&Ls unsuccessfully tested financial fate in the junk bond market and are no longer in business.Milken, banned from the securities industry for life and sentenced to 10 years in prison to be followed by three years of community service, enticed millions of people with his philosophy that "junk is good." Only those who resisted the temptation to march along can smile now.

I recently asked Mongtomery Ward top man Bernard Brennan what he felt best about regarding his group's buyout of the company several years ago. "We didn't use any junk bond financing to put it together," Brennan replied quickly with a smile.

Society in the 1990s is paying a high price for the activity of the late 1980s. Milken didn't invent low-grade bonds, but he legitimized ownership of them by pointing out that they had performed well historically compared with regular bonds. Unfortunately, he didn't point out that his data didn't include periods of economic downturn.

He encouraged use of junk bonds for takeovers, a new and exciting idea at the time. He also created the aura of a solid aftermarket for junk bonds, first through his own Drexel Burn-ham Lambert firm and then a myriad of investment houses lured into the market by potential profits.

"Compared to Milken, convicted inside trader Ivan Boesky was a nickel-and-dime scalper who used information to profit from a few deals," said Marshall Front, executive vice president with the SteinRoe & Farnham investment firm. "Milken, who orchestrated a financial structure and whipped society into following, had a truly unique position in that he reported to no one."

Milken flouted securities laws because he felt that he and his junk bond movement were "larger" than the securities business and that the rest of the world would eventually follow their tune. That is not unlike the private arguments offered by some in the commodities industry, now on trial for alleged widespread trading infractions. They maintain that government regulation is outmoded because their industry is blazing new trails in a modern world.

Even now, devotees of Milken's philosophy believe he was snared by mere "technical violations" and that his sentence, the toughest yet in the Wall Street scandal, is harsh. They say the junk market would still be booming if Milken hadn't been dethroned and Drexel Burnham Lambert plunged into bankruptcy. They keep hearing the tune of the Pied Piper, a man who had a negative impact on millions.

The junk market collapsed of its own weight and would have done so with or without Milken. No matter what is done to Milken, there will one day be another Pied Piper who presents a different but similarly enticing tune to those who desperately want to believe.

As far as the junk bond market itself, it is not dead. It will continue on a smaller scale but with investors and companies far more aware of the risks tied to its potential high yields. Junk bonds shouldn't be more than a portion of a personal portfolio.

There will be greater research of the issues in this market, Front believes. The junk bond market will break into three tiers: "high-grade" junk paying 12 percent to 14 percent; "medium-grade" junk offering 14 percent to 16 percent; and "junk" junk offering even higher yields with greater risk.

Perhaps the Pied Piper will come out of jail a rich man, as many speculate he will. But keep in mind that a large portion of his holdings were the same ones that he foisted on others. So, their value is declining daily in the junk heap.