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Liar's Poker
The time was the 1980s. The place was Wall Street. The game was called Liar’s Poker.
Michael Lewis was fresh out of Princeton and the London School of Economics when he landed a job at Salomon Brothers, one of Wall Street’s premier investment firms. During the next three years, Lewis rose from callow trainee to bond salesman, raking in millions for the firm and cashing in on a modern-day gold rush. Liar’s Poker is the culmination of those heady, frenzied years—a behind-the-scenes look at a unique and turbulent time in American business. From the frat-boy camaraderie of the forty-first-floor trading room to the killer instinct that made ambitious young men gamble everything on a high-stakes game of bluffing and deception, here is Michael Lewis’s knowing and hilarious insider’s account of an unprecedented era of greed, gluttony, and outrageous fortune. .
Michael Lewis was fresh out of Princeton and the London School of Economics when he landed a job at Salomon Brothers, one of Wall Street’s premier investment firms. During the next three years, Lewis rose from callow trainee to bond salesman, raking in millions for the firm and cashing in on a modern-day gold rush. Liar’s Poker is the culmination of those heady, frenzied years—a behind-the-scenes look at a unique and turbulent time in American business. From the frat-boy camaraderie of the forty-first-floor trading room to the killer instinct that made ambitious young men gamble everything on a high-stakes game of bluffing and deception, here is Michael Lewis’s knowing and hilarious insider’s account of an unprecedented era of greed, gluttony, and outrageous fortune. .
310 pages, Paperback
First published October 17, 1989
About the author
Michael Lewis
40 books13.5k followersMichael Monroe Lewis is an American author and financial journalist. He has also been a contributing editor to Vanity Fair since 2009, writing mostly on business, finance, and economics. He is known for his nonfiction work, particularly his coverage of financial crises and behavioral finance.
Lewis was born in New Orleans and attended Princeton University, from which he graduated with a degree in art history. After attending the London School of Economics, he began a career on Wall Street during the 1980s as a bond salesman at Salomon Brothers. The experience prompted him to write his first book, Liar's Poker (1989). Fourteen years later, Lewis wrote Moneyball: The Art of Winning an Unfair Game (2003), in which he investigated the success of Billy Beane and the Oakland Athletics. His 2006 book The Blind Side: Evolution of a Game was his first to be adapted into a film, The Blind Side (2009). In 2010, he released The Big Short: Inside the Doomsday Machine. The film adaptation of Moneyball was released in 2011, followed by The Big Short in 2015.
Lewis's books have won two Los Angeles Times Book Prizes and several have reached number one on the New York Times Bestsellers Lists, including his most recent book, Going Infinite (2023).
Lewis was born in New Orleans and attended Princeton University, from which he graduated with a degree in art history. After attending the London School of Economics, he began a career on Wall Street during the 1980s as a bond salesman at Salomon Brothers. The experience prompted him to write his first book, Liar's Poker (1989). Fourteen years later, Lewis wrote Moneyball: The Art of Winning an Unfair Game (2003), in which he investigated the success of Billy Beane and the Oakland Athletics. His 2006 book The Blind Side: Evolution of a Game was his first to be adapted into a film, The Blind Side (2009). In 2010, he released The Big Short: Inside the Doomsday Machine. The film adaptation of Moneyball was released in 2011, followed by The Big Short in 2015.
Lewis's books have won two Los Angeles Times Book Prizes and several have reached number one on the New York Times Bestsellers Lists, including his most recent book, Going Infinite (2023).
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Displaying 1 - 30 of 3,036 reviews
March 4, 2016
Update On Tuesday, March 1, 2016, I got a call, my banker resigned from Morgan Stanley. He said they wanted to put the commission and charges clients pay up too much and that it has become Corruption Central. He says he'll phone me when he finds a new company. Does anything change?
My son who is in his last year at law school has a job already with Goldman Sachs. Is he going to become very rich and very corrupt? Will I care as much when it is my son and not my money?
_____
Liar's Poker is the ultra high-stakes game played in Wall Street companies by the brokers with the obscenely high commissions they get from trading in the investment market.
What results is either extreme wealth and satisfaction - probably quite a few of these people are psychopaths or guilt and a change in career, or they become just like the American Psycho, a rather fun fictional book on the ultimate psycho on Wall Street.
The book is highly recommended for lots of open-mouthed, "geez, people act like that", say things like that moments and because Michael Lewis, as always, knows his subject well and writes about it in a very entertaining and non-dry way. Great read.
The author quite obviously dislikes and has nothing but contempt for the banking industry - he resigned from Salomon Brothers to write this book but at the time was still married to Diana de Cordova, an investment banker with Morgan Stanley. I wonder if his book had anything to do with the marriage breaking down? He married twice more, both tv journalists, but got out of banking completely and into writing best-selling books. At least his time was his own.
_____
I've been reading other reviews of this book and I hadn't realised that it was over 20 years old. It reads like it could have been written about the overblown corruption of the Finance market right now that explodes into the press every few years. Plus ça change, plus c'est la même chose, at least with Wall Street.
My son who is in his last year at law school has a job already with Goldman Sachs. Is he going to become very rich and very corrupt? Will I care as much when it is my son and not my money?
_____
Liar's Poker is the ultra high-stakes game played in Wall Street companies by the brokers with the obscenely high commissions they get from trading in the investment market.
What results is either extreme wealth and satisfaction - probably quite a few of these people are psychopaths or guilt and a change in career, or they become just like the American Psycho, a rather fun fictional book on the ultimate psycho on Wall Street.
The book is highly recommended for lots of open-mouthed, "geez, people act like that", say things like that moments and because Michael Lewis, as always, knows his subject well and writes about it in a very entertaining and non-dry way. Great read.
The author quite obviously dislikes and has nothing but contempt for the banking industry - he resigned from Salomon Brothers to write this book but at the time was still married to Diana de Cordova, an investment banker with Morgan Stanley. I wonder if his book had anything to do with the marriage breaking down? He married twice more, both tv journalists, but got out of banking completely and into writing best-selling books. At least his time was his own.
_____
I've been reading other reviews of this book and I hadn't realised that it was over 20 years old. It reads like it could have been written about the overblown corruption of the Finance market right now that explodes into the press every few years. Plus ça change, plus c'est la même chose, at least with Wall Street.
July 11, 2010
21 years after publication, Liar's Poker feels both relevant and ancient. Relevant because it seems the Big Swinging Dicks of Wall Street are ever with us; ancient because of references to things like WATS lines and the lionizing of Salomon Brothers trader John Meriwether, whose Long-Term Capital Management would spectacularly implode in 1998, and Michael Milken, who apparently had not yet been indicted when the book went to press but got a 10-year prison sentence for securities violations.
Lewis is a raconteur more than a documentarian, which is both pleasing and irritating. Certainly raconteurs can sell more books. Most people don't want to read dry scholarly accounts of Wall Street. But there are times in the book (most of chapters 1-4) where his writerly persona is so big that it crowds out everything else. His tone is so arch, snarky, exaggerated, so swimming in eddies of simile and metaphor, that I don't completely believe him (though I'm sure the vague outlines of his story are true). He pairs bravado with disarming self-deprecation, telling us repeatedly how he was utterly green, knew nothing, stumbled his way through everything, yet brought a trader who had wronged him to his knees, and by the time he left Salomon was earning the largest bonus of his class (undeserved, he insists). He steps away from the tales of towel-slapping long enough to give a detailed history of the rise of mortgage trading at Salomon Brothers and how Salomon management allowed hegemony to slip through their fingers. (Raising the question, how did such a junior employee know so much about a) the mortgage market, and b) the internecine battles among Salomon bigwigs?) The portrait he paints of Salomon's chairman John Gutfreund is fairly devastating (though ancient history; Gutfreund would be forced out by Warren Buffett in 1991 after a Treasury bond scandal).
Some examples of his raconteurship:
Ranieri welded a coherent departmental personality out of two separate but equally gamy ethnic groups. (Italians and Jews, if you care.)
Buying whole loans (that is what the traders called home loans, to distinguish them from mortgage bonds) was an act of faith, like eating bologna.
For each step forward in market technology they [the traders:] took a step backward in human evolution...they became louder, ruder, fatter...
Their days began at 8 a.m. with a round of onion cheeseburgers. "We'd order four hundred dollars of Mexican food," says a former trader. "You can't buy four hundred dollars of Mexican food. But we'd try - guacamole in five-gallon drums, for a start. A customer would call in and ask us to bid or offer bonds, and you'd have to say, 'I'm sorry, but we're in the middle of the feeding frenzy. I'll have to call you back.'"
Lewis is a raconteur more than a documentarian, which is both pleasing and irritating. Certainly raconteurs can sell more books. Most people don't want to read dry scholarly accounts of Wall Street. But there are times in the book (most of chapters 1-4) where his writerly persona is so big that it crowds out everything else. His tone is so arch, snarky, exaggerated, so swimming in eddies of simile and metaphor, that I don't completely believe him (though I'm sure the vague outlines of his story are true). He pairs bravado with disarming self-deprecation, telling us repeatedly how he was utterly green, knew nothing, stumbled his way through everything, yet brought a trader who had wronged him to his knees, and by the time he left Salomon was earning the largest bonus of his class (undeserved, he insists). He steps away from the tales of towel-slapping long enough to give a detailed history of the rise of mortgage trading at Salomon Brothers and how Salomon management allowed hegemony to slip through their fingers. (Raising the question, how did such a junior employee know so much about a) the mortgage market, and b) the internecine battles among Salomon bigwigs?) The portrait he paints of Salomon's chairman John Gutfreund is fairly devastating (though ancient history; Gutfreund would be forced out by Warren Buffett in 1991 after a Treasury bond scandal).
Some examples of his raconteurship:
Ranieri welded a coherent departmental personality out of two separate but equally gamy ethnic groups. (Italians and Jews, if you care.)
Buying whole loans (that is what the traders called home loans, to distinguish them from mortgage bonds) was an act of faith, like eating bologna.
For each step forward in market technology they [the traders:] took a step backward in human evolution...they became louder, ruder, fatter...
Their days began at 8 a.m. with a round of onion cheeseburgers. "We'd order four hundred dollars of Mexican food," says a former trader. "You can't buy four hundred dollars of Mexican food. But we'd try - guacamole in five-gallon drums, for a start. A customer would call in and ask us to bid or offer bonds, and you'd have to say, 'I'm sorry, but we're in the middle of the feeding frenzy. I'll have to call you back.'"
October 31, 2012
Atlas Shrugged for the philistine. It's subtle glorification of the greedy, underneath a veneer of hilarious sarcasm and grudging respect is the stuff financial Bibles are made of.
An interesting slice of financial history is captured succinctly, more precisely the development of Collaterized Mortgage Obligations in the 80's which also has direct relevance to the recent U.S housing crisis.
If you wish to get everything you can out of this book, get your Finance 101 straight. It'll be a lot more fun.
An interesting slice of financial history is captured succinctly, more precisely the development of Collaterized Mortgage Obligations in the 80's which also has direct relevance to the recent U.S housing crisis.
If you wish to get everything you can out of this book, get your Finance 101 straight. It'll be a lot more fun.
May 30, 2016
In 2007, super investor Warren Buffett of Berkshire Hathaway made a bet with some of the people over at the Protege Partners hedge fund. He wagered that over a period of ten years the S&P 500 (a passive index) would outperform a group of five hedge funds* handpicked by Protege, with the loser donating one million dollars to the charity of the winner's choice.
(*Hedge Fund: A limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains.)
With one more year to go (as of this writing), here are the results thus far: The hedge funds are up a cumulative 22 percent. The S&P? Up close to 66 percent.
So what does this have to do with Liar's Poker?
First, the prospective reader should understand what Liar's Poker is. It is a memoir by best-selling author Michael Lewis about his brief stint working for the investment firm Salomon Brothers during the mid-eighties.
So, you may well ask, what does this have to do with Warren Buffett?
Well, there are two connections. First connection: In 1987, Buffett was approached by Salomon Brothers (which was struggling against a hostile takeover attempt) and offered a deal. If Buffett would lend Salomon 700 million dollars in the form of a special bond—which Salomon would then use to buy back their own shares to fight the takeover attempt—then Buffett would have two options. Either (A) he could hold the bond in exchange for an interest rate of nine percent (a good return) or (B) he could, at any time before 1996, trade the bond in for Salomon common stock at $38 a share, only losing money if the company somehow went bankrupt.
The second connection, more poignant than the first, is this Buffett quote:
"There's been far, far, far more money made by people in Wall Street through salesmanship abilities than through investment abilities."
Which brings us back to Salomon Brothers.
Because Liar's Poker is their tale, the story of a group of traders and salesmen who at times not only did not make their customers money, but who on occasion used their customers as patsies in order to minimize their own losses (at their customers' expense) by selling said customers investment products that Salomon Brothers owned, and which Salomon knew were crap when they were sold, in order to get them off Salomon's books. It tells the tale of Michael Lewis, fresh out of Princeton and the London School of Economics, and his three year sojourn with what was (at that time) one of Wall Street's premiere investment firms, and how a combination of greed, stupidity and internal corruption almost destroyed the company.
Highly recommended reading for those folks curious about the goings on of a prominent Wall Street firm during the eighties, and who don't mind a behind-the-scenes look (metaphorically speaking) at how the sausage gets made.
(*Hedge Fund: A limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains.)
With one more year to go (as of this writing), here are the results thus far: The hedge funds are up a cumulative 22 percent. The S&P? Up close to 66 percent.
So what does this have to do with Liar's Poker?
First, the prospective reader should understand what Liar's Poker is. It is a memoir by best-selling author Michael Lewis about his brief stint working for the investment firm Salomon Brothers during the mid-eighties.
So, you may well ask, what does this have to do with Warren Buffett?
Well, there are two connections. First connection: In 1987, Buffett was approached by Salomon Brothers (which was struggling against a hostile takeover attempt) and offered a deal. If Buffett would lend Salomon 700 million dollars in the form of a special bond—which Salomon would then use to buy back their own shares to fight the takeover attempt—then Buffett would have two options. Either (A) he could hold the bond in exchange for an interest rate of nine percent (a good return) or (B) he could, at any time before 1996, trade the bond in for Salomon common stock at $38 a share, only losing money if the company somehow went bankrupt.
The second connection, more poignant than the first, is this Buffett quote:
"There's been far, far, far more money made by people in Wall Street through salesmanship abilities than through investment abilities."
Which brings us back to Salomon Brothers.
Because Liar's Poker is their tale, the story of a group of traders and salesmen who at times not only did not make their customers money, but who on occasion used their customers as patsies in order to minimize their own losses (at their customers' expense) by selling said customers investment products that Salomon Brothers owned, and which Salomon knew were crap when they were sold, in order to get them off Salomon's books. It tells the tale of Michael Lewis, fresh out of Princeton and the London School of Economics, and his three year sojourn with what was (at that time) one of Wall Street's premiere investment firms, and how a combination of greed, stupidity and internal corruption almost destroyed the company.
Highly recommended reading for those folks curious about the goings on of a prominent Wall Street firm during the eighties, and who don't mind a behind-the-scenes look (metaphorically speaking) at how the sausage gets made.
July 26, 2014
This book surprised me. I read and enjoyed Lewis' Moneyball a while back, and thought I was getting another journalistic account, this time of a crazy moment in corporate culture. Instead, it's very much a memoir of that world. And I didn't care for it at first, since the group of people he writes about are so spectacularly awful. He brings a certain world of investment banking trainees home to you, and I wanted nothing to do with it. If that was the whole book, I don't think I could take it. Something like the way some people don't like The Office (esp. the BBC version); it's too painful to see such human lowness.
But I'm glad I stuck around, because he can really tell a story. The sense of battle, politicking, and putting up fronts. Wry observations. Big picture, little picture. He comes off as a whistle blower with no sense that he's betraying his world; just an inside man dissecting a world he finds amusing, deranged, and perversely fun.
But I'm glad I stuck around, because he can really tell a story. The sense of battle, politicking, and putting up fronts. Wry observations. Big picture, little picture. He comes off as a whistle blower with no sense that he's betraying his world; just an inside man dissecting a world he finds amusing, deranged, and perversely fun.
March 25, 2007
pp 83 is a discussion of S&L's failure in the US.
pp 136 is the best explanation of CMO's I've ever read.
Great read. Initially loaned to me by a coworker. I went out and bought it shortly thereafter.
A former art student winds up becoming a bond salesman for Salomon Brothers in the mid 1980's. He sees a lot, and describes it vividly. Chernobyl. The October Crash of 1987. Gutfreund and Meriwether quibbling over how much to bet in one hand of the title game.
He introduces some terms to the lexicon that persist to this day: BSD- as used in the movie Boiler Room. Good deal of relevant information for both the average investor as well as the seasoned professional. When the news about Chernobyl breaks Mike's good friend has some advice for him, "Buy potatoes." This is a powerful illustration of how traders, not investors, think.
A spread, any spread...
pp 136 is the best explanation of CMO's I've ever read.
Great read. Initially loaned to me by a coworker. I went out and bought it shortly thereafter.
A former art student winds up becoming a bond salesman for Salomon Brothers in the mid 1980's. He sees a lot, and describes it vividly. Chernobyl. The October Crash of 1987. Gutfreund and Meriwether quibbling over how much to bet in one hand of the title game.
He introduces some terms to the lexicon that persist to this day: BSD- as used in the movie Boiler Room. Good deal of relevant information for both the average investor as well as the seasoned professional. When the news about Chernobyl breaks Mike's good friend has some advice for him, "Buy potatoes." This is a powerful illustration of how traders, not investors, think.
A spread, any spread...
August 5, 2011
Why am I languishing here, making approximately $0 dollars as a librarian? Why was I not a Wall Street investment banker?! These guys were having all the fun. In his introduction to the Big Short, Lewis writes that he was dismayed people took Liar's Poker not as a cautionary tale, but as a how-to manual for their careers. But I can totally understand why! He makes the trading floor sound like the place to be, the absolute center of the universe.
He's also got a real knack for explaining something in one or two sentences, and then providing a brief anecdote or lively quote to illustrate the thing described. It's literally never boring. I've heard people say that his writing is successful because it makes readers feel smart, and I get that. Although sometimes, when you have failed to understand something so colorfully and breezily explained, it can actually make you feel...less smart. I read one particular page about the rise of junk bonds three times, and then just gave up.
He's also got a real knack for explaining something in one or two sentences, and then providing a brief anecdote or lively quote to illustrate the thing described. It's literally never boring. I've heard people say that his writing is successful because it makes readers feel smart, and I get that. Although sometimes, when you have failed to understand something so colorfully and breezily explained, it can actually make you feel...less smart. I read one particular page about the rise of junk bonds three times, and then just gave up.
August 18, 2014
Probably the least interesting thing by Michael Lewis that I've read. Billed as an expose of Wall Street greed, I found it more to be a story of incompetent management and political infighting by conceited executives who found themselves successful by being in the right place at the right time, but think themselves as geniuses.
Some of this reminded me a lot of my father's stories of the politics at his former law practice. Why anyone would want to work in a place with so much backstabbing and viscousness is beyond me. Shows the value of company culture.
It's funny to see Lewis wishing the company had been bought out by private equity firms just so they would fire the management. To me this book is another example that companies can sometimes be successful in spite of their leaders if they have a decent product and some luck.
Some of this reminded me a lot of my father's stories of the politics at his former law practice. Why anyone would want to work in a place with so much backstabbing and viscousness is beyond me. Shows the value of company culture.
It's funny to see Lewis wishing the company had been bought out by private equity firms just so they would fire the management. To me this book is another example that companies can sometimes be successful in spite of their leaders if they have a decent product and some luck.
September 1, 2011
First book of this type I truly enjoyed. Thank you Lewis for opening up a new field of book to explore.
September 16, 2019
While this is probably Michael Lewis's most famous book, it is not my favorite. Lewis is always an engaging writer, but maybe because this is a recounting of a period of his life, and not an investigation into an exciting mystery or a study of a socialogical phenomenon, it's just not as fascinating as his other works.
The book is interesting, as it follows Lewis's journey from college interviews to working at top investment firm Salomon Brothers. The whole investment banking world is incredibly cutthroat, not surprisingly. The money to be made was incredible, and unfortunately the “snakes” of the world benefited from this. People who could sell worthless stuff for large sums of money were the heroes. People who had the best interests of their customers at heart were the losers.
A problem with this book is that it is somewhat dated—again, because it is a “diary” of time in Lewis's life and not just about an event that exists on its own. Honestly, I probably would have scored this higher and enjoyed it more if Lewis's other books weren't so absolutely fantastic!! Moneyball in particular is one of my favorite books and has been reread until it's somewhat tattered. I've loved every other book by Lewis, so this one suffers in comparison. Still a good read, if you are interested in the “good ol' days” of finance!
The book is interesting, as it follows Lewis's journey from college interviews to working at top investment firm Salomon Brothers. The whole investment banking world is incredibly cutthroat, not surprisingly. The money to be made was incredible, and unfortunately the “snakes” of the world benefited from this. People who could sell worthless stuff for large sums of money were the heroes. People who had the best interests of their customers at heart were the losers.
A problem with this book is that it is somewhat dated—again, because it is a “diary” of time in Lewis's life and not just about an event that exists on its own. Honestly, I probably would have scored this higher and enjoyed it more if Lewis's other books weren't so absolutely fantastic!! Moneyball in particular is one of my favorite books and has been reread until it's somewhat tattered. I've loved every other book by Lewis, so this one suffers in comparison. Still a good read, if you are interested in the “good ol' days” of finance!
May 22, 2020
When a single game of Liar's Poker is played with a million dollars at stake at a workplace, just what, or whom, in the world are you dealing with? The most money-hungry industry, probably. Wall Street, ding, ding!
Money is a nebulous thing, and when you start dealing in the millions, perhaps billions, over a telephone, what happens to you and your soul? When Savings & Loans managers sell out for a chance to play in the big leagues, the world slides into Pottersville. Liar's Poker makes you feel like there are no more George Baileys left, and that's a tragic and cynical view indeed. Aspects of bond trading are like the rest of Wall Street finance—one of those deliberately arcane subjects, meant to prevaricate and hoodwink. Michael Lewis gives you a true insider look at what goes on, uniquely positioned with his experience as a bond trader at Salomon Brothers when the firm was the king of trading back in the mid to late 80s. He reveals his serendipitous start and the series of playground-like rituals that governed a new class of "geeks" hell-bent on climbing the ladder to become one of those classic "corporate finance" people. It's a wacky combination of luck, self-aggrandizement, connections, and risk-taking. This story is not meant to be triumphant, yet nor does it fully succeed as a take-down.
In the aftermath of his time at Salomon Brothers, Lewis has enough self-awareness to remark: "Christ, if social contribution had been the measure, I should have been billed rather than paid at the end of the year." He has plenty of ascerbic commentary to go around, yet Liar's Poker simultaneously revels in the posturing and the culture of being on a trading floor: the desire of every trainee to become a BSD (aka Big Swinging Dick (classy, I know)); to ruthlessly demand a bigger bonus in the second or third year of working or threaten to leave the firm (which hordes of Salomon Brothers' employees did); to get away with screwing over as many customers as possible (pat on the back and a fatter paycheck if you exploit their weaknesses!). When Lewis was in the game of bond trading, he very much embodied the things that can seem so awful about investment firms. Much of them twenty-something-year-olds, poised as if on top of the world with a humanitarian streak nowhere to be found. Instead, thestreak torrent of self-interest and entitlement harbored by all these individuals left an acrid taste in my mouth, only made less pungent by Lewis's natural humor, sarcasm, and self-deprecation.
This book will work for some people. I much preferred Lewis's The Big Short: Inside the Doomsday Machine to Liar's Poker. This is really a "me, not you" problem. I find economics can be an interesting topic, but I personally don't think I cared enough about bonds in the way that I felt an abiding interest in the 2008 housing crisis. Here, you can see the disaster (the 2008 one, not just the stock market crash in 1987) in the making: absurdly irresponsible and profligate management while opportunistic ignorance and greed remained supreme. If there's a more positive way to describe Wall Street, please enlighten me...
I can only stomach that kind of subject material for so long. I only want to read about selfish and borderline detestable human beings for so long. The saddest realization is that it feels as if so little has changed or even that it has gone downhill, 30 years after this book has been published. 1980s Wall Street and today's Wall Street do not seem so different. There is always a Next Big Thing that rakes in the cash for the finance/investment industry. The entrance of junk bonds then, subprime mortgage loans in the 2008 crisis. When our stock market is careening up and down because of coronavirus right now and the coming year(s) of our economy look bleak, who knows what Wall Street is conjuring up right now? Experience would dictate that it's probably not good.
By the end of this book, I felt enormously wearied and disillusioned, much the way that Lewis felt when he quit his job. Would that he stayed, he could be much richer and the world would be much poorer. All the respect to him for leaving, but this book has also left me, inevitably, too cynical. I don't care if it's not Christmas right now; I need to go watch It's a Wonderful Life again.
Money is a nebulous thing, and when you start dealing in the millions, perhaps billions, over a telephone, what happens to you and your soul? When Savings & Loans managers sell out for a chance to play in the big leagues, the world slides into Pottersville. Liar's Poker makes you feel like there are no more George Baileys left, and that's a tragic and cynical view indeed. Aspects of bond trading are like the rest of Wall Street finance—one of those deliberately arcane subjects, meant to prevaricate and hoodwink. Michael Lewis gives you a true insider look at what goes on, uniquely positioned with his experience as a bond trader at Salomon Brothers when the firm was the king of trading back in the mid to late 80s. He reveals his serendipitous start and the series of playground-like rituals that governed a new class of "geeks" hell-bent on climbing the ladder to become one of those classic "corporate finance" people. It's a wacky combination of luck, self-aggrandizement, connections, and risk-taking. This story is not meant to be triumphant, yet nor does it fully succeed as a take-down.
In the aftermath of his time at Salomon Brothers, Lewis has enough self-awareness to remark: "Christ, if social contribution had been the measure, I should have been billed rather than paid at the end of the year." He has plenty of ascerbic commentary to go around, yet Liar's Poker simultaneously revels in the posturing and the culture of being on a trading floor: the desire of every trainee to become a BSD (aka Big Swinging Dick (classy, I know)); to ruthlessly demand a bigger bonus in the second or third year of working or threaten to leave the firm (which hordes of Salomon Brothers' employees did); to get away with screwing over as many customers as possible (pat on the back and a fatter paycheck if you exploit their weaknesses!). When Lewis was in the game of bond trading, he very much embodied the things that can seem so awful about investment firms. Much of them twenty-something-year-olds, poised as if on top of the world with a humanitarian streak nowhere to be found. Instead, the
This book will work for some people. I much preferred Lewis's The Big Short: Inside the Doomsday Machine to Liar's Poker. This is really a "me, not you" problem. I find economics can be an interesting topic, but I personally don't think I cared enough about bonds in the way that I felt an abiding interest in the 2008 housing crisis. Here, you can see the disaster (the 2008 one, not just the stock market crash in 1987) in the making: absurdly irresponsible and profligate management while opportunistic ignorance and greed remained supreme. If there's a more positive way to describe Wall Street, please enlighten me...
I can only stomach that kind of subject material for so long. I only want to read about selfish and borderline detestable human beings for so long. The saddest realization is that it feels as if so little has changed or even that it has gone downhill, 30 years after this book has been published. 1980s Wall Street and today's Wall Street do not seem so different. There is always a Next Big Thing that rakes in the cash for the finance/investment industry. The entrance of junk bonds then, subprime mortgage loans in the 2008 crisis. When our stock market is careening up and down because of coronavirus right now and the coming year(s) of our economy look bleak, who knows what Wall Street is conjuring up right now? Experience would dictate that it's probably not good.
By the end of this book, I felt enormously wearied and disillusioned, much the way that Lewis felt when he quit his job. Would that he stayed, he could be much richer and the world would be much poorer. All the respect to him for leaving, but this book has also left me, inevitably, too cynical. I don't care if it's not Christmas right now; I need to go watch It's a Wonderful Life again.
January 8, 2012
I'm a little torn by this book. It's well written, it's funny in places, some of Michael Lewis' observations are very astute and I'm sure that on some level this is an excellent commentary on the downfall of a once great company. Lewis was a trainee bond trader at Salomon Brothers when that firm was the most profitable on Wall St. He did very well out of his time there, and his analysis both here and in another of his works, The Big Short, pinpoints several of the problems that society has, or should have, with how the financial system works.
Yet, having read The Blind Side, Lewis' views on how one position, and in particular one person playing in that position, changed American football, before both The Big Short and then Liar's Poker, I can't help disliking the author. Intensely. His previous two books had given me no reason for this at all, with the possible exception of a little smugness in 'Short'. However, Liar's Poker drips with 'I could see it coming from the second it began', 'I hated screwing clients but it was what I had to do' (every uniformed low-level goon in a dictatorship's first excuse) and 'all these people [bankers] are so horrible'. The venom he has for banking and bankers made me laugh out loud when the final line of the book informed the reader that Lewis lives in London with his wife, an investment banker. When you factor in that Lewis made vast sums of money from the profession, it's easy to see all this as disingenuous, and that's my conclusion. Once it was popular to want to be a banker, so Michael Lewis became a banker, now it's popular to hate them, so he hates them. I can't help but think that if everyone said tomorrow that they'd made a huge mistake and bankers were not to blame and that they are in fact wonderful, that Lewis would call a few contacts and be back at his trading post in minutes.
Yet, having read The Blind Side, Lewis' views on how one position, and in particular one person playing in that position, changed American football, before both The Big Short and then Liar's Poker, I can't help disliking the author. Intensely. His previous two books had given me no reason for this at all, with the possible exception of a little smugness in 'Short'. However, Liar's Poker drips with 'I could see it coming from the second it began', 'I hated screwing clients but it was what I had to do' (every uniformed low-level goon in a dictatorship's first excuse) and 'all these people [bankers] are so horrible'. The venom he has for banking and bankers made me laugh out loud when the final line of the book informed the reader that Lewis lives in London with his wife, an investment banker. When you factor in that Lewis made vast sums of money from the profession, it's easy to see all this as disingenuous, and that's my conclusion. Once it was popular to want to be a banker, so Michael Lewis became a banker, now it's popular to hate them, so he hates them. I can't help but think that if everyone said tomorrow that they'd made a huge mistake and bankers were not to blame and that they are in fact wonderful, that Lewis would call a few contacts and be back at his trading post in minutes.
September 2, 2019
This is the author's narrative of his experience working at Salomon Brothers, at one time the biggest investment bank on Wall Street and probably the world. The book is a sarcastic look into the world of high finance with wit and humor laced in the narrative. Investment banks are generally known as the hotbed of high net worth employees who sell products (equities, debt, bonds and mortgages here) to gullible, often clueless, investors at huge profits to satisfy their ever-increasing appetite for humongous profits. Corporate greed is the underlying message of the book and the cast of characters are the unscrupulous traders dotting the landscape.
The author is actually an art history student who somehow stumbles onto to the investment banking job, mainly just because every smart ivy League graduate seemed to be joining one. Somewhere down the years he is somewhat disillusioned by the profession and quits. The book is definitely insightful and educative. Some terms like CMOs, junk bonds etc are so lucidly explained that even a layman will be able to understand. Reading this book 30 years after it was first published. So many changes have taken place and so many firms have ceased to exist since. The book is funny at places but monotony of the narrative gets to you after a point of time.
The author is actually an art history student who somehow stumbles onto to the investment banking job, mainly just because every smart ivy League graduate seemed to be joining one. Somewhere down the years he is somewhat disillusioned by the profession and quits. The book is definitely insightful and educative. Some terms like CMOs, junk bonds etc are so lucidly explained that even a layman will be able to understand. Reading this book 30 years after it was first published. So many changes have taken place and so many firms have ceased to exist since. The book is funny at places but monotony of the narrative gets to you after a point of time.
December 17, 2019
In a previous review, I talked about The Bonfire of the Vanities and about the mastery of Tom Wolfe in crafting his characters, the story line and the various social types he described there. There was one aspect of that book that I did not talk much about and yet which was prevalent in my attraction to the story: not only it is one of the iconic stories that symbolizes Wall Street in the 1980s but it is also taking place at a very specific time when Wall Street was actually part of History. Indeed, Wall Street was at that juncture the mighty knight that was spearheading the victory of capitalism over communist. It was backed by the arrogant success of the money business of these days, that Ronald Reagan and Maggy Thatcher overpowered their arch enemy and delivered the final blow to the crumbling Soviet Union. No moral judgement of good or bad here, just an observation of a given point in history.
I love history and I work in New York, at the core of the world’s financial center. Therefore when Finance becomes part of history, I feel as if I can touch history up close. This is why I was looking for another story in that vein and I found it with the Liar’s Poker.
Like myself, Michael Lewis was writing as an insider and therefore what he writes feels very real. I prefer fiction and therefore I would have liked it more if he had turned the book into a novel but it is nevertheless very good. Lewis describes his experience as bond salesman on Wall Street during the late 1980s. This book too is considered iconic of the Wall Street of these days with all the excesses of greed, the ruthless race among competitors to be the first to rip the shirt off each client:
P22 “To succeed on Salomon Brothers trading floor a person had to wake up each morning ‘ready to bite the ass off a bear.’”
Once the wolves were let loose there was no mercy to expect:
P200 “like all of us, he lived by the law of the jungle and the law of the jungle said Geek salesmen are red meat for traders. No exception.”
P208 “the best thing was to pretend to others at Salomon that I had meant to screw the customer. People would respect that. That was called jamming.”
P274 “’Every company has got people sitting around who do nothing for what they get paid’ says Joe Perella. ‘If they take a lot of debt, it forces them to cut fat.’ The takeover specialists did for debt what Ivan Boesky did for greed. Debt is good they said. Debt works.”
In these days, Salomon Brothers’ mortgage department made history because it was successful, obnoxiously, filthily successful at taking advantage of the deregulation by selling big chunks of mortgages like bonds. As a result, individuals that were not particularly polished in the first place to say the least turned into a crowd of grotesque Jabba the Hut who suddenly could leave their shady pubs and have their moment of glory at the top of the world:
P89 “If you fuckin buy this bond in a fucking trade, you’re fucking fucked. And if you don’t pay fuckin attention to the fuckin two-year you get your fuckin face ripped off.”
P214 “The only thing that saved me in meeting after meeting in the early days at Salomon was that the people I dealt with knew even less. London was or is a great refuge for hacks.”
So why would there be an interest for the average reader to dive in this world of slobs and frat boys? Well, why would an honest Roman citizen be interested in a detailed description of a barbarian tribe living somewhere off in the forests of Germany? He wouldn’t except at the very moment of the barbarian invasion when those slobs are about to take over the whole world and impose a new world order and this is exactly what had happened back in the eighties.
These “big swinging dicks” as they called themselves triggered the first business revolution of the post cold war world. They would have a massive impact on the economy. There would be other such revolutions in the new globalized jungle created by ruthless capitalism of course such as the dot-com bubble that I witnessed up close and that I described in my novel “Bubble Boys” and of course the leverage revolution and its subsequent liquidity crisis of 2008.
Each time, the world shook harder, a little like these barbarians who, from invasion to invasion, come every time a little closer to Rome. So what will be the next financial crisis about and what impact will it have on history? Some of the clues are right there, in Michael Lewis’ book. A must read.
I love history and I work in New York, at the core of the world’s financial center. Therefore when Finance becomes part of history, I feel as if I can touch history up close. This is why I was looking for another story in that vein and I found it with the Liar’s Poker.
Like myself, Michael Lewis was writing as an insider and therefore what he writes feels very real. I prefer fiction and therefore I would have liked it more if he had turned the book into a novel but it is nevertheless very good. Lewis describes his experience as bond salesman on Wall Street during the late 1980s. This book too is considered iconic of the Wall Street of these days with all the excesses of greed, the ruthless race among competitors to be the first to rip the shirt off each client:
P22 “To succeed on Salomon Brothers trading floor a person had to wake up each morning ‘ready to bite the ass off a bear.’”
Once the wolves were let loose there was no mercy to expect:
P200 “like all of us, he lived by the law of the jungle and the law of the jungle said Geek salesmen are red meat for traders. No exception.”
P208 “the best thing was to pretend to others at Salomon that I had meant to screw the customer. People would respect that. That was called jamming.”
P274 “’Every company has got people sitting around who do nothing for what they get paid’ says Joe Perella. ‘If they take a lot of debt, it forces them to cut fat.’ The takeover specialists did for debt what Ivan Boesky did for greed. Debt is good they said. Debt works.”
In these days, Salomon Brothers’ mortgage department made history because it was successful, obnoxiously, filthily successful at taking advantage of the deregulation by selling big chunks of mortgages like bonds. As a result, individuals that were not particularly polished in the first place to say the least turned into a crowd of grotesque Jabba the Hut who suddenly could leave their shady pubs and have their moment of glory at the top of the world:
P89 “If you fuckin buy this bond in a fucking trade, you’re fucking fucked. And if you don’t pay fuckin attention to the fuckin two-year you get your fuckin face ripped off.”
P214 “The only thing that saved me in meeting after meeting in the early days at Salomon was that the people I dealt with knew even less. London was or is a great refuge for hacks.”
So why would there be an interest for the average reader to dive in this world of slobs and frat boys? Well, why would an honest Roman citizen be interested in a detailed description of a barbarian tribe living somewhere off in the forests of Germany? He wouldn’t except at the very moment of the barbarian invasion when those slobs are about to take over the whole world and impose a new world order and this is exactly what had happened back in the eighties.
These “big swinging dicks” as they called themselves triggered the first business revolution of the post cold war world. They would have a massive impact on the economy. There would be other such revolutions in the new globalized jungle created by ruthless capitalism of course such as the dot-com bubble that I witnessed up close and that I described in my novel “Bubble Boys” and of course the leverage revolution and its subsequent liquidity crisis of 2008.
Each time, the world shook harder, a little like these barbarians who, from invasion to invasion, come every time a little closer to Rome. So what will be the next financial crisis about and what impact will it have on history? Some of the clues are right there, in Michael Lewis’ book. A must read.
August 12, 2012
To write a non-fictional portrayal of your life during your 20s is not an easy task. To do this while still in your 20s, to have it be your first book, and to have the story revolve around bond trading / Wall Street - and not have the book be as dry as it sounds - seems an almost cruel undertaking. But Lewis managed to do this. Despite what would seem to be the worst idea for a first book, Lewis keeps the reader interested and turning pages, even with a cast of execrable people that are only made more loathsome by the fact that they do, indeed, exist.
With unwitting prescience, Lewis writes about the creation of the mortgage bond business in the early/mid '80s that would take center stage in 2008 during the global economic meltdown. The unadulterated, unchecked greed with which the bond traders knowingly fleeced "suckers" in the market is staggering not by the reaches of their malfeasance, but rather that those unsavory characters continue to exist, in increasingly more dastardly versions as the years go by, and in all areas of Wall Street, banking and government. I'm happy I read this book after The Big Short: Inside the Doomsday Machine because it makes that more recent book much more poignant in retrospect. I can almost see Lewis' head shaking as he was penning "Big Short" realizing he had seen all of this first hand 20 years before, knowing that nothing would really be done to make meaningful changes to avert a future disaster, and that as this event plays out again and again into the future the reality is that there is going to be a time when the wheels come off for good - and no amount of government intervention or "market self correction" is going to fix the problem. Doomsday Machine, indeed.
With unwitting prescience, Lewis writes about the creation of the mortgage bond business in the early/mid '80s that would take center stage in 2008 during the global economic meltdown. The unadulterated, unchecked greed with which the bond traders knowingly fleeced "suckers" in the market is staggering not by the reaches of their malfeasance, but rather that those unsavory characters continue to exist, in increasingly more dastardly versions as the years go by, and in all areas of Wall Street, banking and government. I'm happy I read this book after The Big Short: Inside the Doomsday Machine because it makes that more recent book much more poignant in retrospect. I can almost see Lewis' head shaking as he was penning "Big Short" realizing he had seen all of this first hand 20 years before, knowing that nothing would really be done to make meaningful changes to avert a future disaster, and that as this event plays out again and again into the future the reality is that there is going to be a time when the wheels come off for good - and no amount of government intervention or "market self correction" is going to fix the problem. Doomsday Machine, indeed.
February 22, 2018
This was my 7th book by the author and I have loved all his earlier books. Even I was surprised how much I disliked this one.
Unlike the other books, this was a memoir of the author's days from investment banking. Remember U.S. Investment bankers ? The guys who paid themselves fat bonuses after the govt bailout in 2008. The guys who broke every barrier of greed in their insane lust for profits. This is about how one of the biggest investment banking firms "Salomon Brothers" worked in the 1980s.
Somehow, it failed to interest me.
Unlike the other books, this was a memoir of the author's days from investment banking. Remember U.S. Investment bankers ? The guys who paid themselves fat bonuses after the govt bailout in 2008. The guys who broke every barrier of greed in their insane lust for profits. This is about how one of the biggest investment banking firms "Salomon Brothers" worked in the 1980s.
Somehow, it failed to interest me.
September 23, 2015
As always, a compulsively readable book from Michael Lewis. I knew that this would further indulge my distrust and resentment of Wall St. and it did just that. Also this was eerily prophetic with its explanation of the inception of mortgage backed securities and judgement of unsustainable finance strategies. Probably one a very few finance books that will make you laugh.
March 28, 2012
Thank Jeebus and Gutfreund this early book was successful because it is hard to imagine experiencing this last bear market without the funny, clear narrative genius that is Michael Lewis.
February 26, 2021
4.5 Stars
A thrilling account of investment banking. The bottom line is don't do it lmao.
A thrilling account of investment banking. The bottom line is don't do it lmao.
November 8, 2009
Liar's Poker tells the story of Michael Lewis and his career on Wall Street during the eighties. In those days, it was almost like the wild west with people throwing money around. Then, the loss of massive sums of money (one hundred million and over) was something that was laughable and easily disregarded. Now, losing that amount of money would yield either a huge embarassment or an instantaeneous firing. Througout the book, Michael Lewis describes to macho-nature of the financial world by using slang terms, such as a human pirahana (someone who curses in every single sentence) and a big swinging dick (the head honcho in the room).
I liked this book a lot because Lewis blends his unique brand of deadpan humor with actual facts about his time on Wall Street. I find that is something that is really hard to do in a book because finding that perfect balance between truth and humor is near impossible. I also like it because the book had a lot of ramifications in the financial world. The book practically ended a few careers as it exposed many brokers for being loose with their money and becuase many people had just been pulled right out of high school. I just found that so interesting because it is very, very rare that you find a book that can do that.
I would reccomend this to anyone that enjoys book based on the financial world and anyone who enjoys books that mesh humor with real facts.
I liked this book a lot because Lewis blends his unique brand of deadpan humor with actual facts about his time on Wall Street. I find that is something that is really hard to do in a book because finding that perfect balance between truth and humor is near impossible. I also like it because the book had a lot of ramifications in the financial world. The book practically ended a few careers as it exposed many brokers for being loose with their money and becuase many people had just been pulled right out of high school. I just found that so interesting because it is very, very rare that you find a book that can do that.
I would reccomend this to anyone that enjoys book based on the financial world and anyone who enjoys books that mesh humor with real facts.
August 11, 2015
I found this worn down bestseller in the investing for dummies section at the library. I read it in a few days and I have a short attention span so it's a good read. This could be easily made into a movie and the author has written books such as Blind Side and Moneyball which were turned into movies.
This is all about the life of a Wall Street bond salesman in a big firm called Salomon Brothers, the firm basically, in the 1980s. It mixes biography with the rise and fall of a company. The company still exists, so maybe not fall, but it's decline as being the top dog. A lot of ruthless horrible people just trying to make money basically.
If you are new to investing, it's a good read since it talks about some concepts that you may not have heard of such as junk bonds and selling mortgage bonds. I had to look up some of the terms.
All the short quick stories of where the term big swinging dick came from and him talking to his trader friend like two old Jewish grandmothers is entertaining. Just a lot of entertaining crazy day in the life of a big shot type of thing.
This is all about the life of a Wall Street bond salesman in a big firm called Salomon Brothers, the firm basically, in the 1980s. It mixes biography with the rise and fall of a company. The company still exists, so maybe not fall, but it's decline as being the top dog. A lot of ruthless horrible people just trying to make money basically.
If you are new to investing, it's a good read since it talks about some concepts that you may not have heard of such as junk bonds and selling mortgage bonds. I had to look up some of the terms.
All the short quick stories of where the term big swinging dick came from and him talking to his trader friend like two old Jewish grandmothers is entertaining. Just a lot of entertaining crazy day in the life of a big shot type of thing.
February 21, 2021
Good storyteller.
Slow beginning with many chapters to give historical context. Still very interesting, and I found myself shaking my head several times. Sometimes also humorous.
Combines great with "Barbarians at the Gate" to show the craziness of the 80s. Both are highly recommended.
Slow beginning with many chapters to give historical context. Still very interesting, and I found myself shaking my head several times. Sometimes also humorous.
Combines great with "Barbarians at the Gate" to show the craziness of the 80s. Both are highly recommended.
June 10, 2017
For people who want to understand the peculiar failure modes of capitalism that have been illustrated by the bubbles, crashes, and bailouts of the past decade, Liar's Poker is required reading. Not that it provides solutions to the problems (far from it), but it illustrates the problem space perhaps better than any other book I know.
It does this by means of a sympathetic, yet introspective, portrayal of the vicious, base-natured villainy that is Wall Street Corporate culture. There is little room to doubt that the attitudes and practices presented in this book are directly responsible for far reaching problems affecting the world, yet it's easy to see why instead of being received as a warning the book was embraced as a how-to guide by a generation of ambitious would-be finance jockeys.
"Never before have so many unskilled twenty-four-year-olds made so much money in so little time as we did this decade in New York and London. There has never before been such a fantastic exception to the rule of the marketplace that one takes out no more than one puts in."
Consider this: I read this book shortly after Dos Passos' U.S.A. trilogy and concurrent with Kerouac's On The Road. I think in those two counter-cultural touchpoints there may be one or two figures who would not jump at the proposition above with both feet, but for most of them the embrace would be as instinctive as breathing. In a weird way, the Wall Street abuses were part of an unbroken continuum with that counter-culture. Sal Paradise would have done very well for himself here. At the same time, the subversion of the bourgeois ideal of incremental cumulative reward for societal benefits of ones labor is like a victory point scored by capitalism against itself. Imagine the high scoring games that would occur if soccer players could increase their salary by an order of magnitude with an own-goal.
The era Michael Lewis illustrates here didn't die or collapse at the end of the 80s, it has continued and if anything has become more extreme to the present day. However, it's difficult to blame the individuals for being self-interested (in the soulless, paranoid way of empty suits), or the politicians for not solving a problem when no solution is clearly possible. Like the attempts to introduce "balancing" factors to a biological ecosystem, each iteration makes the old problems worse while introducing new ones.
The genius of this book is that it is a highly enjoyable and readable frolic, which only becomes oppressive and dismal when you stand back and think about what it entails. Sadly, many readers never take that last step and flock to become the next generation of piranhas on Wall Street. Given the promise of millions of dollars for people with limited ability to contribute meaningfully to society, it's hard to blame them.
It does this by means of a sympathetic, yet introspective, portrayal of the vicious, base-natured villainy that is Wall Street Corporate culture. There is little room to doubt that the attitudes and practices presented in this book are directly responsible for far reaching problems affecting the world, yet it's easy to see why instead of being received as a warning the book was embraced as a how-to guide by a generation of ambitious would-be finance jockeys.
"Never before have so many unskilled twenty-four-year-olds made so much money in so little time as we did this decade in New York and London. There has never before been such a fantastic exception to the rule of the marketplace that one takes out no more than one puts in."
Consider this: I read this book shortly after Dos Passos' U.S.A. trilogy and concurrent with Kerouac's On The Road. I think in those two counter-cultural touchpoints there may be one or two figures who would not jump at the proposition above with both feet, but for most of them the embrace would be as instinctive as breathing. In a weird way, the Wall Street abuses were part of an unbroken continuum with that counter-culture. Sal Paradise would have done very well for himself here. At the same time, the subversion of the bourgeois ideal of incremental cumulative reward for societal benefits of ones labor is like a victory point scored by capitalism against itself. Imagine the high scoring games that would occur if soccer players could increase their salary by an order of magnitude with an own-goal.
The era Michael Lewis illustrates here didn't die or collapse at the end of the 80s, it has continued and if anything has become more extreme to the present day. However, it's difficult to blame the individuals for being self-interested (in the soulless, paranoid way of empty suits), or the politicians for not solving a problem when no solution is clearly possible. Like the attempts to introduce "balancing" factors to a biological ecosystem, each iteration makes the old problems worse while introducing new ones.
The genius of this book is that it is a highly enjoyable and readable frolic, which only becomes oppressive and dismal when you stand back and think about what it entails. Sadly, many readers never take that last step and flock to become the next generation of piranhas on Wall Street. Given the promise of millions of dollars for people with limited ability to contribute meaningfully to society, it's hard to blame them.
May 13, 2021
A plot is set up, then things happen, and then finally there's a conclusion. That's what makes a story. Right? Wrong.
Michael Lewis is a brilliant writer. He catches the reader's fancy from the get go. But Liar's Poker doesn't really have a plot. It's not based on a singular event -- a market crash, a scam, or whatever. Instead, it's part memoir, part deep look inside the world of investment banking. Or maybe just one investment bank Salomon Brothers, where Lewis worked for ~2 years.
Liar's Poker is a primer into investment banking. He tells it like it is, there's no glorification, and no undue vilification of either the profession or any individual character. He knows how to tell a story, even if there's no plot, and there was not a single page in the book that dragged or felt like it didn't fit.
Most investment bankers, turns out, are just glorified salesmen. Bonds' salesmen, in this particular instance. They call up fund managers and try to feed them shit so that they buy whatever they want to sell. I mean, at least some salesmen do that. Or did that, this book was published decades ago.
Now why would a fund manager buy a bond or some other complex financial instrument out of nowhere 'cause some guy called him to sell it to whom? I really don't know. It's mostly greed. But fund managers do do that (or did that). And the investment banks where these salesmen work are darn fucking rich, so they have darn fucking good images (dapper suits and fancy restaurants help for sure). But the investment banks aren't the fund manager's friends. They're just middlemen with conflicts of interest at every point and you can never be sure of which interest they're furthering at which point in time.
Essentially, unless you're a big, big fish, dealing with investment banks is a massive gamble. They're not out there looking for your interests. As with any agent/broker/middleman.
Lewis intersperses his writing on how investment banks operate with his own moral dilemmas. Bankers love to think that they "deserve" all the money they end up making (hundreds of thousands of dollars, sometimes millions, back in the '80s!). Lewis is unambiguous in his thoughts that he didn't deserve it. He gives us a brief insight into his dilemma in the epilogue and I love the measured, reflective individual I see there.
Undoubtedly a classic for the ages. If you know nothing about finance, read this book, google a little, and you'll come out with both knowledge and emotions (and dazzled by the humour).
Michael Lewis is a brilliant writer. He catches the reader's fancy from the get go. But Liar's Poker doesn't really have a plot. It's not based on a singular event -- a market crash, a scam, or whatever. Instead, it's part memoir, part deep look inside the world of investment banking. Or maybe just one investment bank Salomon Brothers, where Lewis worked for ~2 years.
Liar's Poker is a primer into investment banking. He tells it like it is, there's no glorification, and no undue vilification of either the profession or any individual character. He knows how to tell a story, even if there's no plot, and there was not a single page in the book that dragged or felt like it didn't fit.
Most investment bankers, turns out, are just glorified salesmen. Bonds' salesmen, in this particular instance. They call up fund managers and try to feed them shit so that they buy whatever they want to sell. I mean, at least some salesmen do that. Or did that, this book was published decades ago.
Now why would a fund manager buy a bond or some other complex financial instrument out of nowhere 'cause some guy called him to sell it to whom? I really don't know. It's mostly greed. But fund managers do do that (or did that). And the investment banks where these salesmen work are darn fucking rich, so they have darn fucking good images (dapper suits and fancy restaurants help for sure). But the investment banks aren't the fund manager's friends. They're just middlemen with conflicts of interest at every point and you can never be sure of which interest they're furthering at which point in time.
Essentially, unless you're a big, big fish, dealing with investment banks is a massive gamble. They're not out there looking for your interests. As with any agent/broker/middleman.
Lewis intersperses his writing on how investment banks operate with his own moral dilemmas. Bankers love to think that they "deserve" all the money they end up making (hundreds of thousands of dollars, sometimes millions, back in the '80s!). Lewis is unambiguous in his thoughts that he didn't deserve it. He gives us a brief insight into his dilemma in the epilogue and I love the measured, reflective individual I see there.
Undoubtedly a classic for the ages. If you know nothing about finance, read this book, google a little, and you'll come out with both knowledge and emotions (and dazzled by the humour).
December 24, 2011
Liar's Poker is a book about the days that Michael Lewis spent at Solomon Brothers as a Bond broker during the bond boom that took place starting in the 80's. The book is really entertaining and at the same time very informative. The book can be grouped into a few sections, that have very distinct focuses. The first is about the rise to prominence of Louie Ranieri to the head of the mortgage bond trading desk and his subsequent fall. The second is about Lewis' own experience in the London office of Solomon Brothers as a trader in the corporate bond department. The third section talks about Michael Milken , the junk bond czar, and his rise to power. I was amazed by the extent to which this whole industry is driven by Ego, cunning, opportunism, speculation, deceit, and street smarts. It is clear that the customer is a victim to be exploited by this industry.It is amazing to realize that institutional investors like pension funds and trusts make multi-billion dollar investments in some of these bonds which turn out to be little more than a speculative gambles of varying levels of risk. Some people become very rich some loose their shirts, and all the while the investment banks make huge profits. It is also thought provoking how laws enacted by the government can drive a whole industry. An example of this is home mortgages as a bond instrument.There is one characteristic of mortgages that make them uninteresting to the bond industry and that is the fact that they can be repaid at any time. Bonds are generally held to a maturity date. Who wants to hold a bond that can be repaid at any time ? The financial lobby tried like crazy to get congress to enact legislation to force a holder of a mortgage to hold it for full term or pay a penalty. This would make it more interesting as a debt instrument, to the detriment of the mortgage holder. This lead to a whole industry which is the CMO industry. Abuses in this industry ultimately lead to the housing bubble and the finanacial crisis 0f 2008. You can read Lewis' other book, The Big Short, for more details about this. In any case, if you want to read a first hand account of the inner workings of the wall street bond industry from an insider, this is a very good read.
March 12, 2017
Đọc Lewis thì khỏi phải nói rồi, rất thỏa mãn ở khía cạnh giải trí. Đây có lẽ là một trong những quyển thú vị ngôn ngữ nhất về phố Wall (đọc là: buồn cười) mà tôi đọc được. Nếu Flash Boys hơi nặng tính kỹ thuật và chỉ trích, The Undoing Project thiên về tính lịch sử và thán phục thì Liar’s Poker, đúng như cái tên, nghiêng về những trò mánh khóe và lừa bịp (The Big Short và Moneyball thì tôi mới chỉ xem phim, chưa đọc sách).
Với những kinh nghiệm ít ỏi của tôi khi còn “ở bên trong” thị trường chứng khoán thì quả đúng là như vậy. Không phải ngẫu nhiên mà đây là nơi tập trung những kẻ thông minh nhất quả đất vào làm việc và chém giết nhau (nơi thông minh thứ nhì chắc là NASA).
Tóm lại là thống khoái.
Với những kinh nghiệm ít ỏi của tôi khi còn “ở bên trong” thị trường chứng khoán thì quả đúng là như vậy. Không phải ngẫu nhiên mà đây là nơi tập trung những kẻ thông minh nhất quả đất vào làm việc và chém giết nhau (nơi thông minh thứ nhì chắc là NASA).
Tóm lại là thống khoái.
June 10, 2014
I think that Michael Lewis is a superb writer. He takes a complex topic, such as mortgage-backed securities, and explains them so that your every(wo)man can understand them. He is also a great observer of human character, and he writes about people with great aplomb. I feel as if I personally know his characters. While the subject matter of investment banking in the 1980s is filled with blind greed, leaving the reader disgusted, Lewis manages to make this book a fabulous read.
August 22, 2023
Reading this book was like attending a reunion for the 1980s. Many attending look familiar but you can't quite remember them, others leap out as OMG there's Milken! And MCI! Others you don't recognize at all until somone reminds you. Just like any reunion, there are good, bad and indifferent memories and interactions.
This is Lewis' memoir of his years at Salomon Brothers as a bond trader under John Gutfreund. It is also a biography of the rise and first fall of the mortgage backed securities/bond market which was invented by Salomon. It is in a sense a memoir of a world whose edges I glanced past in the 1980s, as a young transactions lawyer who also represented coops and condos as general counsel (which in fact I still do nearly 40 years later). You see, I was involved in closing the residential mortgages that gave rise to the thrifts, and the commercial mortgages that also were all fed into the securitizations sold as bonds. I also was there during the crash of 1987 and the subsequent workouts with banks and government. Banks came and went. Products offered by banks came and went. Still do. I also had as clients many of those bond traders -- either directly as they bought and sold apartments and indirectly as they served on coop and condo boards in the buildings in which they owned apartments. This was such a nostalgia read. But it's also completely relevant to day because it is all still present and infact led to another crash in 2008, and I'm sure will lead to yet another at some future point. It's the nature of the business; it's a blood sport.
For those not on a nostalgia trip - and I did not set out for one - this is an excellent read on two levels: it's an engaging story of one young bond trader's experience before turning to writing full time, and it's incredibly well written in explaining how it all works, i.e. bonds, thrifts, swaps, difference among the investment houses, and so on. Lewis does a great job alternating between personal story, anecdotes, factual information, and explaining tough concepts.
There's one particular bit near the beginning that I intend to share with a client of mine. It talks about interest-rate swaps which were invented around 1980 and still appear now and again. A year ago a client of mine was nearly suckered into an interest rate swap on a commercial loan he was taking out to purchase his office condo. Before signing the commitment, he wisely sent it to me to review. When after several readings of the description of the interest rate swap (which basically is how the interest rate and thus monthly payment was going to be for the 10 year term of the mortgage) and an in depth discussion with the banker 'selling' my client the loan, I could not understand what his payment per month was going to be or how calculated. I called a colleague who is a commercial mortgage broker and asked him what the f--- this was or had I become stupid, he told me that it is all smoke and mirrors and that the rate would adjust constantly, that monthly payments would not be fixed. I called my client and told him to forget it (turned out he didn't understand it at all either) - and he went with a fixed interest rate. Good thing too because a month later rates started skyrocketing and he would have been screwed under the swap set up. But it shows you that all the stratagems and ploys circle back again and again.
This is Lewis' memoir of his years at Salomon Brothers as a bond trader under John Gutfreund. It is also a biography of the rise and first fall of the mortgage backed securities/bond market which was invented by Salomon. It is in a sense a memoir of a world whose edges I glanced past in the 1980s, as a young transactions lawyer who also represented coops and condos as general counsel (which in fact I still do nearly 40 years later). You see, I was involved in closing the residential mortgages that gave rise to the thrifts, and the commercial mortgages that also were all fed into the securitizations sold as bonds. I also was there during the crash of 1987 and the subsequent workouts with banks and government. Banks came and went. Products offered by banks came and went. Still do. I also had as clients many of those bond traders -- either directly as they bought and sold apartments and indirectly as they served on coop and condo boards in the buildings in which they owned apartments. This was such a nostalgia read. But it's also completely relevant to day because it is all still present and infact led to another crash in 2008, and I'm sure will lead to yet another at some future point. It's the nature of the business; it's a blood sport.
For those not on a nostalgia trip - and I did not set out for one - this is an excellent read on two levels: it's an engaging story of one young bond trader's experience before turning to writing full time, and it's incredibly well written in explaining how it all works, i.e. bonds, thrifts, swaps, difference among the investment houses, and so on. Lewis does a great job alternating between personal story, anecdotes, factual information, and explaining tough concepts.
There's one particular bit near the beginning that I intend to share with a client of mine. It talks about interest-rate swaps which were invented around 1980 and still appear now and again. A year ago a client of mine was nearly suckered into an interest rate swap on a commercial loan he was taking out to purchase his office condo. Before signing the commitment, he wisely sent it to me to review. When after several readings of the description of the interest rate swap (which basically is how the interest rate and thus monthly payment was going to be for the 10 year term of the mortgage) and an in depth discussion with the banker 'selling' my client the loan, I could not understand what his payment per month was going to be or how calculated. I called a colleague who is a commercial mortgage broker and asked him what the f--- this was or had I become stupid, he told me that it is all smoke and mirrors and that the rate would adjust constantly, that monthly payments would not be fixed. I called my client and told him to forget it (turned out he didn't understand it at all either) - and he went with a fixed interest rate. Good thing too because a month later rates started skyrocketing and he would have been screwed under the swap set up. But it shows you that all the stratagems and ploys circle back again and again.
December 26, 2023
There are some books about finance and economics that are so well written and fundamental in their arguments that they withstand the weight of time, becoming atemporal sources of market wisdom. Michael Lewis’ Liars Poker, unfortunately, is not one of those books.
Reading it almost 4 decades later makes it hard to buy into the importance of the events being portrayed. The descriptions of traders and salesmen moving millions through phone lines or the mentions of old Wall Street heroes long forgotten are so removed to the point of being useless for any modern student of capital markets.
As a depiction of the Wall Street toxic money-chasing macho culture the book is excellent. But years later several books and movies - some by Michael Lewis himself - would come out as much better portraits of that culture.
The book does contain, to my pleasant surprise, one of the best primers on the creation of the mortgage bond market. It describes with good detail the events and financial rationale that led Lewi Ranieri and his team at Salomon to create a market for mortgage bonds. Said market would eventually grow and mutate into the cacophony of fraud and greed that underpinned the 2008 financial crisis. But, in many ways, the first symptoms of what would later become a systemic problem can be seen in the book (the poor risk-rating process, the financial shenanigans to cater to many investors, etc).
The book is mildly funny, but often Lewis’ personal dialogue and self evaluation during his salesman days become a little annoying. The social dynamics of his training class at Salomon is also a little overplayed. Lewis’ writing style gets much lighter and funnier in some of his later books such a as The Big Short or Flashboys.
The book was a great success after its publication in 89. It was one of the first books tailored to the general public that portrayed with great detail the culture of Wall Street, the market evolution of the 80s, and the shenanigans of some of the biggest names in finance at the time. But today it feels like a relic; made of names long gone, their interactions on a finance stage that now looks very different, and a culture that, in many ways, remains, but is better portrayed in other mediums.
Reading it almost 4 decades later makes it hard to buy into the importance of the events being portrayed. The descriptions of traders and salesmen moving millions through phone lines or the mentions of old Wall Street heroes long forgotten are so removed to the point of being useless for any modern student of capital markets.
As a depiction of the Wall Street toxic money-chasing macho culture the book is excellent. But years later several books and movies - some by Michael Lewis himself - would come out as much better portraits of that culture.
The book does contain, to my pleasant surprise, one of the best primers on the creation of the mortgage bond market. It describes with good detail the events and financial rationale that led Lewi Ranieri and his team at Salomon to create a market for mortgage bonds. Said market would eventually grow and mutate into the cacophony of fraud and greed that underpinned the 2008 financial crisis. But, in many ways, the first symptoms of what would later become a systemic problem can be seen in the book (the poor risk-rating process, the financial shenanigans to cater to many investors, etc).
The book is mildly funny, but often Lewis’ personal dialogue and self evaluation during his salesman days become a little annoying. The social dynamics of his training class at Salomon is also a little overplayed. Lewis’ writing style gets much lighter and funnier in some of his later books such a as The Big Short or Flashboys.
The book was a great success after its publication in 89. It was one of the first books tailored to the general public that portrayed with great detail the culture of Wall Street, the market evolution of the 80s, and the shenanigans of some of the biggest names in finance at the time. But today it feels like a relic; made of names long gone, their interactions on a finance stage that now looks very different, and a culture that, in many ways, remains, but is better portrayed in other mediums.
February 13, 2024
Considering I still don’t understand most of the financial stuff in this book, this is the most engaging intro to investment banking I’ve read (in my almost zilch experience reading about investment banking). I drew a little diagram to understand bonds while reading, and the fact I bothered to get out my pen to understand a complex foreign system written about in a book read for leisure purposes speaks to the attention-grabbing nature of the writing, even when it was also absolutely confusing. Also there were many laugh out loud moments in the first half of the book. People interested in finance will of course find this interesting, as well as those interested in how to make boring complicated things interesting. But surprisingly due to the book tracing the author’s 20s, I find this book is a fun story for navigating work as new grads (in wholly disrespectful immoral self-serving ways) - particularly the dynamics people might encounter and how to deal with them.
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