Liar's Poker

Dec 10, 2012 Petra X rated it 4 of 5 stars · review of another edition

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, guilt and a change in career, or 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...more

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Mar 25, 2007 Steven rated it 4 of 5 stars · review of another edition

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 lexico...more

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Jun 25, 2008 Ruben rated it 4 of 5 stars · review of another edition

Shelves: economics-finance

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. So...more

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May 18, 2013 JP rated it 4 of 5 stars · review of another edition

This was published in1989, but the story seems so relevant to 2009 that I wonder if we've learned anything. Lewis was at Salomon Brothers during the mid-80's, a time when the firm's astute traders created opportunities with clients and found even bigger opportunities through the federal subsidization of mortgage bond risk. Starting as a very atypical trainee, he succeeded and within a few years became the top performer of his class. Along the way, he observed the breakdown in corporate character...more

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Dec 04, 2008 Matt rated it 5 of 5 stars · review of another edition

This was a fascinating book to be reading in the midst of the biggest financial crisis of the past 75 years. Liar's Poker records the author's experience as a bonds trader for Solomon Brothers, at the height of the 80's trading explosion - an accurate, and frightening, account of the ludicrous nature of the whole industry. Perhaps the most shocking aspect of the book is the attitude of the traders: to make money at any cost, regardless of the consequences. In this world, it was perfectly accepta...more

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May 18, 2013 Meera rated it 4 of 5 stars · review of another edition

4.5 stars.

Liar's Poker by Michael Lewis is a non fiction story about his experiences as a bond salesman in New York and London during the 1980s.

Liar's Poker is a high stakes game played during the afternoon by executives, traders, and salesmen. It is also a clever metaphor for the piranha culture within Solomon Brothers and other big banks where there are huge risk taking opportunities which brings immediate payoffs and a clear distinction between the winners and the losers.

The story follows two...more

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May 14, 2013 Ankur Rastogi rated it 4 of 5 stars · review of another edition

Liar's Poker by Michael Lewis is one the most brutal and honest book I have read about the greed in the investment banking industry. Its no surprise that there always has been tremendous amount of money at play in equities and bond trading. What this book opens up is the sheer reecklessness and the callous attitude adopted by everyone involved. It from the bottom traders all the way to the top in the management. Each one trying to make as much money as possible which none of them would have poss...more Liar's Poker by Michael Lewis is one the most brutal and honest book I have read about the greed in the investment banking industry. Its no surprise that there always has been tremendous amount of money at play in equities and bond trading. What this book opens up is the sheer reecklessness and the callous attitude adopted by everyone involved. It from the bottom traders all the way to the top in the management. Each one trying to make as much money as possible which none of them would have possibly imagined just a few years back when they might have joined the investment banks.

The novel also exposes how normally the investor (in this case the bank's customer) is taken for a ride for personal gain.

The financial advisors in the investment banks have been questioned from time to time for their biased reviews and advise regarding their top picks as each advisory firm is an offshoot of the trading arm or corporate finance arm. And in such cases giving an impartial advise is nearly impossible.

The book is an autobiographical account of one of these traders who soon joined the "Big Swinging Dick" club at Salomon Brothers. He writes about his experience of being recruited and then the fast pace of growth (in this case read personal wealth accumulated) in just 3 years at the bank.

In parallel, the novel runs the rise and fall of Salomon Brothers. How by sheer accident, some political connections and lots of luck, Salomon Brothers becomes a force to reckon with in Bond Trading. How due to its monopoly in the market, they amass huge personal wealth (the firm's profitability in totality was always a question mark and the author prefers to keep it that way). How the bond market transforms from corporate bonds to mortgage bonds (another risky product that was also the genesis of the recent financial crisis). And how soon the competitors catch up with the likes of First Boston, Morgan Stanley, and so on.

I would strongly recommend this book to anyone who has even the slightest interest in the big bad world of investment banking.
The book is also a good financial glossary of some of the most common and misused products in the industry.(less)

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Apr 30, 2013 Jacqueline Tao rated it 4 of 5 stars · review of another edition

“There was a phenomenon known at Salomon as a priority. A priority was a huge number of bonds or stocks that had to be sold, either because selling them would make us rich or because not selling them would make us poor. […] Unless sold to customers, they could cost Salomon a great deal of money. Sold to customers, of course, they would cost the customers a great deal of money.”

The concept of priority, of putting the firm before your customers, characterized investment banking in the 1980s. As po...more “There was a phenomenon known at Salomon as a priority. A priority was a huge number of bonds or stocks that had to be sold, either because selling them would make us rich or because not selling them would make us poor. […] Unless sold to customers, they could cost Salomon a great deal of money. Sold to customers, of course, they would cost the customers a great deal of money.”

The concept of priority, of putting the firm before your customers, characterized investment banking in the 1980s. As portrayed in “Liar’s Poker”; it’s a jungle out there and the only person that’s going to make you rich is your firm. Not that this idea is a shock when considering the investment banking industry, after all, it is all about the money.

“Liar’s Poker” takes you back to the 1980s when junk bonds and mortgage backed bonds were the new, hot item that everyone wanted to trade. However, due to the esotericism of the new product, many were did not understand how the new bonds worked and rushed into buying them without thinking, including senior management. Those few that did understand the new bonds made millions and those that did not lost millions. “Liar’s Poker” takes you into the lives of those who made millions and how they got to where they were.

One interesting success story of a man who made millions on mortgage backed bonds was a man named Lewis Ranieri (recently named by TIME as one of the 25 People to Blame for the Financial Crisis). An unusual rags-to-riches story, Ranieri started off working part-time in the Salomon Brothers’ mailroom while studying for his college degree. But a fortunate chance encounter with a selfless trader turned Ranieri’s life around. Hard on his luck, flat broke, with $10,000 of his wife’s hospital bills to pay, Ranieri asked a Salomon Brothers’ partner for a loan. Much to Ranieri’s disbelief the Salomon Brothers’ partner did not give him a loan but paid for the entire hospital bill telling Ranieri, “It is more important to be a good man than a good manager”.

This unselfish act by a Salomon trader was forever ingrained into Lewis Ranieri’s mind and lent itself to his undying loyalty to the firm. It showed Ranieri that with the Solomon Brothers’ they take care of their own. After paying off his wife’s hospital bill, Ranieri quit school and began to work fulltime with Salomon Brothers, moving up to manager of the mailroom and quickly onto the trading floor. His unconventional education led Ranieri to do unusual, but successful trades and soon headed the new mortgage bond department.

These stories are just one of the many personal success stories of those in the bond industry in the 1980s. One may think that “Liar’s Poker” is a novel for investment bankers, but that is not true (though it does make the jargon a less bit tedious) it is also a novel about people. And about how money changes people, as it often does. Some may read the novel as a story of how many lost themselves to greed while others may read it as how to be successful in investment banking. In the end it’s all about choices, and one can choose to become a morally depraved individual with dollar signs for eyes or not.

Overall, “Liar’s Poker” tells the story of how and why people are successful in the bond industry of the 1980s. Though there are despicable moments of human behavior in the pursuit of money, there are also a few (very few) moments of morality. Despite it all, the stories of the rise and fall of these are very exciting. Imagine a 23 year old making over $100,000 a year! That’s enough to make anyone green with envy. (less)

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Jan 27, 2013 Steve Thomas rated it 4 of 5 stars · review of another edition

In the first half of the book, Lewis writes about the proceedings at Solomon Brothers over the course of about a decade, going into great detail about characters such as Lewis Ranieri and John Gutfreund and most specifically the culture of bond traders on the 41st floor. The second half of the book is detail of his employment as an equity salesman with SB as well as the junk bond sales and ultimately the start of the demise of the firm.

Lewis manages to tell the story of the culture of SB in grea...more In the first half of the book, Lewis writes about the proceedings at Solomon Brothers over the course of about a decade, going into great detail about characters such as Lewis Ranieri and John Gutfreund and most specifically the culture of bond traders on the 41st floor. The second half of the book is detail of his employment as an equity salesman with SB as well as the junk bond sales and ultimately the start of the demise of the firm.

Lewis manages to tell the story of the culture of SB in great detail, from Ranieri, a former chef and loyal common man who worked his way up through head up the mortgage bond department in the early 80s, to Gutfreund; a man obsessed with material wealth who made questionable decisions that probably led to the demise of SB. Then there is the tales of the 41st floor; bond traders who were so deep in the game that their single focus was to make a quick profit flipping products no matter what the consequences. The culture of the mortgage department is described as a mainly white Anglo-Saxon Protestants, with strong appetites for both food and making a quick buck. Most were lacking in any real moral or ethical judgment and willing to screw their customers without hesitation at the smell of any profit. Ultimately, the mortgage department of SB was very lucky in being at the right place at the right time when the mortgage securitization market took off. They were able to profit by being well positioned since they were really the only firm that understood the market well enough early on, and were able to reap huge profits as a result. Ultimately, the widespread dispersion of information and poor management caught up to SB and lead to the demise of the firm as a whole, but not before almost a whole decade of huge profits in the 80s.

Michael then proceeds to narrate the tale of his own period of employment with Solomon Brothers. He is a equity salesman in the London office which he explains is drastically different from the more chaotic mortgage bond trading on the 41st floor in NYC. Nevertheless, he explains that as a “geek” or a newbie within the company, he is thrown out there to sell equities despite the fact that he has no knowledge of what he should be selling. Ultimately he is told to sell equities by traders who do not have customers’ interest at heart and is forced to screw his customers at various times. Only through a select two close friends whom are knowledgeable does Lewis eventually get to understand the markets, and Lewis acknowledges that he is very grateful for having those people teach him things that they did not need to. Lewis actually proceeds to become a valuable entity as a salesman and continues to move up the ladder at SB until he left the company in the late 80s. He acknowledges that it was the poorest financial decision that he had ever made (he made around a quarter million the year he left), but he came to the understanding that his concepts about what money does to you had changed. He no longer felt that the more money you had the better your life was, ultimately leading to his resignation.

Liar’s Poker is very valuable in that it gives a very good historical timeline of information for the reader whom is not familiar with the proceedings of the financial markets throughout the late 70s, and 80s. It goes through the expansion of the mortgage markets, Volcker’s changes that allowed for the boom and how investment banks proceeded to make tons of money through the process of securitization. It goes into detail about the junk bond era, and how Milken managed to sell billions in junk bonds, and ultimately went as far as too completely change the corporate landscape and lead to the thousands of M&A’s that happened during the period. Lewis does all of this in a manner that is entertaining, humorous and fun to read. If for no other reason than getting a historical understanding of a period, reading this book is a great way to achieve that.

One of the parts of Lewis’ narratives that I find to be shocking is the culture that he depicts within the organization. In terms of the management especially, which is depicted as being fairly incompetent for the most part. Lewis writes – “Salomon Brothers was the only major firm on Wall Street in the early 1980s with no system for allocating cots. As unbelievable as it seems, no measure was taken of the bottom line; people were judged by the sum total of the revenues on their trading books irrespective of what these cost to generate.” (Liar’s Poker 136). This does seem quite unbelievable that such practices were occurring not too long ago. Also detailed is John Gutfreund’s selling of $700 million dollars worth of convertible bonds to Buffett, a move that cost the shareholders millions just so Gutfreund could avoid takeover and keep his position in the company.

Overall an excellent read, Lewis has a knack for informing while keeping his topic material interesting.
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Sep 25, 2012 Adam rated it 3 of 5 stars · review of another edition

Liar's Poker

It's hard not to compare this book to the Big Short. For one thing that book was my introduction to Michael Lewis, and my introduction to reading popular nonfiction about the financial industry. Unfortunately, the book doesn't stand up to the comparison well.

There are two major problems with this book. First and foremost, the events discussed are coming up on 30 years old. It's hard
to get too excited about financial misdeeds that have been so thoroughly overtaken by events.* Second...more

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Jun 10, 2012 Avadhut added it · review of another edition

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Summary –

What is the probability that a twenty four year old novice with no clue about finance will be paid millions of dollars for dishing out investment advice to grown-ups? 100% according to Michael Lewis if you can bet other peoples’ money or persuade them to bet it thereby making a killing for your firm. Liar’s Poker reveals the dark underbelly of the high priests of capitalism where fortunes are made and broken on the trading floor with every passing...more http://avadhutrecommends.wordpress.com/

Summary –

What is the probability that a twenty four year old novice with no clue about finance will be paid millions of dollars for dishing out investment advice to grown-ups? 100% according to Michael Lewis if you can bet other peoples’ money or persuade them to bet it thereby making a killing for your firm. Liar’s Poker reveals the dark underbelly of the high priests of capitalism where fortunes are made and broken on the trading floor with every passing second.

Review –

I read Liar’s Poker for the first time on the heels of Lehman fiasco and my immediate reaction was “Holy $#^* !! If this book was published in 1990 and was such a success, why Lewis’s warning signals of a heating mortgage and junk bond market were so completely ignored? Did no one among the powers that be ever read it to realise where the profligacy and arrogance would lead us? Why the keeper of the keys were caught napping behind the wheel?”

Liar’s Poker is a mini autobiography by Michael Lewis that portrays the 80’s world of bond trading at Salomon Brothers. Lewis enumerates his own experience on the Wall Street as well as describes the creation, growth and exploitation of the bond market at the hands of shrewd bond traders. After trying desperately to land a finance job and being rejected by all for being an art graduate, Lewis entered London School of Economics and then managed to get into Salomon Brothers’ training program and from there graduated to become one of the highly successful bond salesman in its London office. He saw the building and bursting of a massive bubble in the mortgage and junk bonds.

Reading the book at a time when the world was experiencing the horrors of 2008 meltdown, I could trace the roots of current crisis. What started with Salomon Brothers’ grip over mortgage bond market lead to Michael Milken’s junk bonds that facilitated many leverage buyouts (Read Barbarians at the Gate by Bryan Burrough and John Helyar). The era of easy credit and complicated financial instruments had begun and despite Enron, Worldcom and Long Term Capital Management continued to thrive.

In the murky and highly egoistic world of bond traders who vie for the tag of ‘Big Swinging Dick’, – moniker for the smartest and the richest, you quickly learn how regulatory over lapse were exploited by Wall Street. With its “Eat or Be Eaten” culture, minimum supervision of the traders and the ‘Winner takes all’ attitude, the trading floors became hunting grounds of the nifty, malevolent traders. Enormous risks were being taken with the proprietary trading desks – resembling the game that traders loved to play most – Liar’s Poker. And if you are wondering what happened to poor clients, well, they were mainly there to be ripped off, an instrument to propel the giant egos and bank balances of the traders into next orbit. This trend continues even today as shown by Greg Smith’s now infamous New York Times op-ed in which he accused Managing Directors at Goldman Sachs referring to their clients as ‘Muppets’.

Lewis is a master storyteller. He explains financial minutiae in a simple language, something he is skilled at as demonstrated by his books like The Big Short and Moneyball. Read this book to learn what transpires behind the Chinese Walls of the mighty Wall Street firms. If you are a ‘Muppet’ like me, then Liar’s Poker will serve as a grim reminder to look at risks closely while dealing in financial instruments.(less)

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Apr 18, 2012 Remo rated it 4 of 5 stars · review of another edition

Shelves: 2006, biografia, finanzas, historia-reciente

Un nuevo libro sobre la serie de cataclismos financieros que tuvieron lugar en Wall Street a finales de los 80. El autor, Michael Lewis, era vendedor de bonos en la poderosa Salomon Brothers. La historia cuenta los comienzos de una época dorada para esta firma, que acaban con su decadencia y el auge de otra, el banco de inversión Drexel Burnham, que había creado un imperio de bonos basura (junk bonds), o bonos de alto riesgo. El libro está muy bien escrito. De nuevo, como me pasa siempre, siento

...more

Un nuevo libro sobre la serie de cataclismos financieros que tuvieron lugar en Wall Street a finales de los 80. El autor, Michael Lewis, era vendedor de bonos en la poderosa Salomon Brothers. La historia cuenta los comienzos de una época dorada para esta firma, que acaban con su decadencia y el auge de otra, el banco de inversión Drexel Burnham, que había creado un imperio de bonos basura (junk bonds), o bonos de alto riesgo. El libro está muy bien escrito. De nuevo, como me pasa siempre, siento una especial simpatía por el protagonista. A pesar de que era un tipo que ganó 90.000 dólares en su primer año y 225.000 en el segundo, le da a uno una especie de penita el ver cómo sufre los vaivenes que ocasionan las luchas intestinas de poder que toda empresa importante sufre.

El autor comienza contando el increíble proceso de casualidades que le llevaron a él, un licenciado en Historia del Arte, a entrar en los cursos de formación del banco Salomon Brothers, poseedor de un cuasimonopolio en el mercado de bonos norteamericano por aquellas fechas. Tras los avatares del curso de formación, nuestro protagonista es lanzado al mundo. Nos narra entonces cómo Salomon Brothers había llegado a ser lo que era, creando negocio donde no lo había. Especialmente interesante es la compleja historia de cómo un sólo hombre, Louie Ranieri, consiguió fabricar un bono sobre hipotecas que permitió transacciones de billones de dólares en varios años. Impresionante ejemplo de ingeniería financiera.

La parte final del libro narra los ocho días del crash financiero del 1987, y cómo afectaron a un banco que en aquél momento poseía el 31% de las acciones de British Petroleum, que se desplomó en bolsa. Cuenta también como Salomon Brothers dejó paso a Drexel Burnham, que había creado una rama de negocio llamada junk bonds, o bonos de alto riesgo, que era lo que estaba dando mucho dienero en aquel momento. Así, Salomon Brothers dejó su puesto a la cabeza de los bancos de inversión de Wall Street. Nuestro protagonista y narrador abandona la empresa en esos días, no porque le despidieran (hubo más de mil despidos sobre una fuerza laboral de 3500 personas) sino porque consideró que ya había visto lo suficiente.

Mi nota: Muy entretenido e interesante.

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Feb 04, 2012 Steve rated it 5 of 5 stars · review of another edition

Very engaging read. Michael Lewis is an excellent storyteller who gives readers an entertaining inside look at whatever is his topic. Liar's Poker follows his own two to three year (successful) career as a bond salesman at Salomon Brothers in the mid-late 1980s. He describes from the inside the pseudo-macho, hyperactive life of bond traders and salesmen at one of the biggest Wall Street investment firms. The greed, gluttony, and appalling pursuit of money at all costs (including clients' and sto...more

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Jan 08, 2012 Mike rated it 3 of 5 stars · review of another edition

Shelves: economics

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 s...more

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Dec 24, 2011 Flavio rated it 4 of 5 stars · review of another edition

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...more 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.(less)

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Flavio 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 t...more 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.(less)
updated Dec 24, 2011 08:40am

Dec 03, 2011 Jake Losh rated it 4 of 5 stars · review of another edition

Shelves: finance, memoir, non-fiction

Liar's Poker is my first exposure to Michael Lewis and also my first exposure to memoir books about finance, the career path that, by revealed preference, I seem to have chosen to follow. As Lewis tells it, unlike most financial memoirs, this is one of the only ones to talk about the bond market, rather than the stock market, which also happens to be the area in which I have the most experience, so it was only natural that I was enthralled reading this book.

The book follows Lewis' experiences wo...more

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Sep 27, 2011 Patrick McCoy rated it 3 of 5 stars · review of another edition

Shelves: non-fiction

After reading Moneyball, I thought Liar's Poker must be a worthwhile read. But, I have to say, the middle chapters about the intricacies of the market, the history of Salomon Brothers, and other specialized discussions tried my patience. I was much more interested in Lewis’ personal story and his somewhat “outsider” perspective. He has a gift for capturing the essence of people with all their quirks and why they are successful, or not, at what they do. I guess it is somewhat fascinating how so...more After reading Moneyball, I thought Liar's Poker must be a worthwhile read. But, I have to say, the middle chapters about the intricacies of the market, the history of Salomon Brothers, and other specialized discussions tried my patience. I was much more interested in Lewis’ personal story and his somewhat “outsider” perspective. He has a gift for capturing the essence of people with all their quirks and why they are successful, or not, at what they do. I guess it is somewhat fascinating how so many alpha males and cavemen made so much money or lost so much money in the markets in the last 25 years, especially since so many of them were quite young as well. I’ve read a couple of other books like Rouge Trader, which was about Nick Leeson who brought down Barclay Bank, and Ugly Americans, which is about traders in Tokyo during the bubble economy. I can’t say that any of these books have improved my opinion of investment bankers, traders, and anyone in finance. After moving to Tokyo, I have rubbed shoulders with these people much more than I had in Seattle-probably due to Tokyo being one of the major world financial centers. Perhaps had I been in Seattle during Internet boom, I could have compared it to that, but I was here. These are people, who feel that the accumulation of money and job status are the only important factors in life. These are people who feel that bonuses, expense accounts, and flying first class are entitlements, rather than perks or rewards. The same people, who never reflect on the havoc that their market trades have caused. Then again the institutions used the traders and money managers and then discarded them when fished-the 80s parables of greed that continues today. However, I don’t think any lesson were really learned by anyone then. Lewis was able to be outside it since he never considered being a lifer in the industry-he was able to walk away. I believe him when he writes: “I’m now convinced that the worst thing a man can do with a telephone, without breaking the law is to call someone he doesn’t know and try to sell that person something he doesn’t want.” It is something that I have spent most of my adult life trying to avoid learning about first hand, so far so good.(less)

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Jul 10, 2011 Kristine rated it 4 of 5 stars · review of another edition

Shelves: non-fiction

I didn't expect to be so entertained, even to the point of chuckling out loud, while reading this book: Liar's Poker:Rising Through the Wreckage of Wall Street.

The topic is hardly humorous, but Michael Lewis displays a flair for character description, clear communication, and generally all-round good writing in this memoir-style inside view into the culture and goings on of Salomon Brothers during the 1980s.

Author Lewis tells the larger story of a firm and an era using his own experiences and...more

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Dec 20, 2010 Scott rated it 5 of 5 stars · review of another edition

Excellent book. I was almost scared off by the copyright date (1989. And indeed I probably wouldn't have bought this if I didn't already like the author and it hadn't been on sale) since I was expecting it to be at least a little dated with lots of sections like "computer?! woah!", but I'm glad I gave this a shot. It's great, and in terms of being dated, this could have been written yesterday since it focuses on the culture/rise & fall of bond trading and not on the actual process at the tim...more

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Jun 19, 2010 Craig rated it 4 of 5 stars · review of another edition

Although it's a gripping narrative that seems to nail the sentiment of the 80s on Wall Street, its greatest virtue is its humor. The description of the group of mortgage bond traders at Salomon Brothers in the early 80s is just classic. Led by a stereotypical fat Italian (employing other fat Italians) who rose from working the mail room to managing director, this small group of traders was in the right place at the right time: when Congress granted tax breaks to S&Ls for selling their mortga...more Although it's a gripping narrative that seems to nail the sentiment of the 80s on Wall Street, its greatest virtue is its humor. The description of the group of mortgage bond traders at Salomon Brothers in the early 80s is just classic. Led by a stereotypical fat Italian (employing other fat Italians) who rose from working the mail room to managing director, this small group of traders was in the right place at the right time: when Congress granted tax breaks to S&Ls for selling their mortgages, a huge market for mortgages arose overnight. Because no other investment house was set up to trade mortgage bonds when this golden opportunity arose, these guys became the primary buyer of mortgages, and could buy mortgages for much cheaper than they were worth, and turn around and instantly sell them back to another S&L for an easy markup. They had a clear monopoly for several years on this scheme, until upper management screwed up by refusing to pay the traders what they were worth (and made the market more efficient -- good for us).

The more obviously funny parts were reading about their "unmatched feats of gluttony" on a weekly and sometimes daily basis, but actually the entire description of how Salomon operated was funny in a dark, twisted way.

I suppose the narrative, assuming it's basically correct and doesn't omit key events, simplifies my own view towards what Wall Street has done, and the direction it is moving: its original intent was to allow people to move money around, at the cost of keeping a portion of the pie it moves. Evidently, since the 80s, it has also opened up a casino-like infrastructure that provides money managers with an endless number of games. The casino business has become the source of huge profits in the past 30 years. Regardless of which type of game you like, Wall Street is sure to have something you like to play. The rules are: if you win, you keep a portion of the winnings, and if you lose, you simply walk away. After all, it was other people's money to begin with. The incentive structure for money managers to risky bets. Forget any notion Congress has today of "finreg"; if the incentive structure can't be changed, then we are doomed to repeat an increasingly amplified version of the boom/bust cycle, as we have witnessed for nearly 30 years.(less)

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Apr 02, 2010 Paulkelly05 rated it 4 of 5 stars · review of another edition

This was a really good book. This was written by a Solomon Brothers Trader, who worked in the 80s. He talked about his experience at the firm but the better part was reading about the dynamics of the market and how Solomon Brothers adapted. During his time at the firm, Junk Bonds and Mortgage backed bonds came into vogue. The Mortgage backed bonds were actually developed at Solomon Brothers. And it was interesting to learn about them, seeing as they were a large factor in the most recent crash....more

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Jun 19, 2009 Nicholas rated it 4 of 5 stars · review of another edition

Shelves: biography-memoir, comedy, lifestyle

This review has been hidden because it contains spoilers. To view it, click here. Funny. Showed how crazy all these guys were. Big swinging dicks.

Interestingly Lewis wrote the book to dissuade people from taking this path. After it came out he was inundated with questions about how to best break into the industry.

The best part was the stuff about the interviews. The guys who had only just started were doing them and were totally changed people. These guys had so many different dances you had to do. I guess it goes with how self important you feel when you make that kind of mo...more

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May 22, 2009 Franco Da Costa Gomez rated it 4 of 5 stars · review of another edition

Really, really wished I had read this book about a year and a half ago when I was about to start my job-search in college. The first few chapters describe what I went through perfectly, I was nodding along the whole way. That didn't last too long though as I definitely got lost in all the jargon/technical speak/employee names later on in the book and ended up rushing to finish it. Good read though, and I learned a lot:

I do not want to work in finance and never should have wanted to work in finan...more

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Apr 04, 2009 James rated it 4 of 5 stars · review of another edition

A journalistic peek behind the trading mania of wall street in the late 80's. The game of Liar's poker will never be the same again. I know guys who have kept "special" dollar bills in their pocket just in case they get stuck in one of those games.

The book, of course, is about how "investment" has become "casino gambling" like poker on wall street. Especially in the highly technical world of bond trading. The protagonists in this book have come and gone. The relatively sympathetic portraits of M...more

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Jun 11, 2011 Frank Stein rated it 5 of 5 stars

A brilliant and funny memoir of life on Wall Street in the 1980s. Michael Lewis shows exactly how craven and self-serving his firm, Salomon Brothers, had become by the time of his arrival in 1985. Previously a backwater, Jewish-led, bond trading firm, Salomon rode the wave of leverage in the Reagan era to become the most profitable investment bank in the world. Yet part of that success came from keeping good deals on its own books and passing bad bets to its customers. Lewis describes his first...more A brilliant and funny memoir of life on Wall Street in the 1980s. Michael Lewis shows exactly how craven and self-serving his firm, Salomon Brothers, had become by the time of his arrival in 1985. Previously a backwater, Jewish-led, bond trading firm, Salomon rode the wave of leverage in the Reagan era to become the most profitable investment bank in the world. Yet part of that success came from keeping good deals on its own books and passing bad bets to its customers. Lewis describes his first qualms and eventual acceptance of "jamming" bad bond deals down the throats of European investors and the praise from his superiors whenever he had sold a horrible deal. For instance, after selling some crappy AT&T bonds to a German investor he was praised as corporate hero, though he had to endure the "primal Teutonic scream" of his irate customer on an almost daily basis thereafter. As one of the teachers at his training program told him "Some people were born customers," meaning born-suckers. (Not surprisingly, Salomon's irate customers soon stopped taking the abuse and not long after Lewis published this book it was bought up by Traveler's Group and later Citi.)

Perhaps most interesting for those reading the book today, Lewis takes a strange 100-page segue to describe the history of mortgage-backed securities, the first of which was sold by Salomon brothers trader Lewis Ranieri in 1979. He describes the MBS as an only slightly less important financial innovation than junk bonds, which, in light of current events, is an amazing understatement. Lewis, who has a fine eye for business culture, describes how Ranieri self-consciously assembled a group of fat, slovenly, back-office Italian traders (their words) to compete in the then impoverished mortgage market. He strove to create his own oppositional culture inside the increasingly WASPish firm, and, after Congress liberalized Savings and Loans investment rules in 1982, his band of misfits became some of the most profitable traders on planet earth. The rest is history.

Parts of the book move surprisingly slow (he takes almost a 100 pages describing his training program), and I wish there was more focus on his own experience as a salesman, but all of it is engaging and well-written. It's a great inside look at how Wall Street worked, and works.

(less)

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Aug 04, 2011 Kate rated it 5 of 5 stars · review of another edition

Shelves: books-about-work, what-is-this-country-coming-to

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 somethin...more

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May 06, 2010 Ramakrishnan M rated it 4 of 5 stars · review of another edition

Liar’s Poker is a very interesting book. It is a story of the bond trading business in the ‘80s, as narrated by someone working in Salamon Brothers those days. I personally knew very little about the debt markets and bond trading, so it was very educational as well as amusing.
You can learn a lot about traders and salesmen, action on the trading floor, how excruciatingly painful it is to join these firms, and all the more painful to continue your job, et al. There is also lot of information on t...more

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Dec 31, 2011 Dan Hummel rated it 4 of 5 stars · review of another edition

Shelves: nonfiction

This is an informative and entertaining insider's account of the rise and decline of the Salomon Brothers bond trading firm in the 1980s. Lewis's genius is in his vivid character sketches and great anecdotes. One of my favorites is Ch. 8's story about Lewis's revenge on "the opportunist" who took credit for a new way to trade bonds.

More broadly this book gives a sense of the wild west atmosphere in the finance industry and, most troubling, the fundamentally conflicted nature of 1980s bond tradin...more

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Nov 08, 2009 Wesley rated it 4 of 5 stars · review of another edition

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...more

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Dec 28, 2011 Ron rated it 5 of 5 stars · review of another edition

Another great Michael Lewis read. This early title covers his apprenticeship at Solomon Brothers in the 1980's. I never thought "compelling reading" and "bond market" would fit well in the same sentence, but in this case they do. Lewis has a gift for balancing analysis with great first-person reporting, and a style that just bounces along.

One jewel from his description of how Solomon management went bad: "The reward for being a good producer is to be made a manager. The best producers are cutth...more

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