Liar's Poker: Rising Through the Wreckage of Wall Street

Michael Lewis does an excellent job describing the internal history of Salomon Brothers in the 1980s. He writes an easy-to-read narrative that is not only a pleasure to read, but is also a sarcastic and detailed examination of how business is done on Wall Street. While Lewis writes specifically about Salomon Brothers, it is not difficult to apply his various criticisms toward other firms. I felt the book was split implicitly into three parts. First, Lewis describes his first impressions of Salomon Brothers, the training program, and his initial experiences getting the job. Second, he steps back from his autobiographical narrative and explains the bigger picture. He tells the reader of the people who ran and built the firm in New York, the crazy things that happened on the trading floor, and how the mortgage trading department grew from a one-man team to a behemoth that would dominate Wall Street. Finally, he returns to his autobiography and talks of his experiences as a bond salesman in the London office. He outlines the fateful events of late 1987 and finally describes his last day at Salomon in 1988. In the third part, Lewis also gives a brief history of Michael Milken and his rise to power at Drexel Burnham. Lewis gives the reader a lesson on how junk bonds became popular (Milken essentially made the market for junk bonds, just as Lewie Ranieri did the same for mortgage bonds). He describes how the demand for junk bonds greatly exceeded the supply until a new use for junk bonds was found - financing leveraged buy-outs by corporate raiders. This book is a very enjoyable read. It is not as vengeful as Monkey Business (also a great read, but very different), but more descriptive and historical in nature. I was a bit reminded of Barbarians at the Gate when reading it. I felt that I got a great overview of Salomon Brothers in the 80s and of the people who made the firm great, especially Lewie Ranieri. Lewis also does an excellent job describing various finance concepts that he discusses throughout the book. He keeps things simple but he doesn't leave out details that would leave me hanging. That was very thoughtful of him, in my opinion. In conclusion, I highly recommend this book to anyone interested in the corporate culture on Wall Street in the 1980s. It's a quick, easy, and enjoyable read. Pros: + great historical overview of Salomon Brothers in the 80s + sharp, insightful, and satirical - an excellent look at Wall Street corporate culture + lots of interesting detail on people who built markets in the 80s + good definitions and descriptions of several financial concepts + fun to read! Cons: - a relatively small window into the history of the firm - ends in 1988; would be great to see another edition wrapping up Salomon's story

Although originally published in October 1989, Michael Lewis' 'Liar's Poker' is as timely a read today as it was back then. It seems the zero sum game in investment banking hasn't changed. For every money maker, there is a money loser, and usually it's the banks customers who lose. Described as 'wickedly funny,' Michael Lewis has a knack for articulating the absurd, and this is his first, and one of his best books. A true story of how he started his career as a trainee in the investment banking firm, Salomon Brothers, later becoming a bond trader based in the Salomons London office, until he left in 1988. He worked the phones, and on his customers, hard enough to become a 'Big Swinging Dick', or traders code for those who trumped the system, making millions for their company. Michael Lewis, unlike many other traders, did have a conscience, but he also wanted to keep his job. He makes up names for those who helped and inspired him at the firm, like 'Dash Riprock', his constant trader companion, and his 'Rabbis'; a mentor, or manager who took him under their wing. The author is less forgiving and used real names for those who deserve some kind of scorn, like John Gutfruend, who was chairman of Salomon Brothers during Michael Lewis' tenure there. Described as the 'last person a nerve-racked trader wanted to see.' He was the type of chairman who liked to sneak up from behind and surprise his traders. The author learns, soon after leaving his training for the trading desks that 'some of the men... were truly awful human beings... They didn't have customers. They had victims.' Other characters are colorfully portrayed in the book, although not many women are in the bunch, since, at the time, it was a male dominated play pen with not too many Big Swinging Dickettes. There was the 'Human Piranha,' a legendary trader who sprouted out profanities, stunning some trainees into silence and awe. And those 'mean gluttons' who worked as mortgage traders. Lewis wrote, 'nothing angered them more than being without food, unless it was being interrupted while they ate.' Michael Lewis also describes in the book the creation and use of mortgage bonds, but not too technically, so it won't overwhelm a layperson. And this is just one reason why 'Liar's Poker' is a timeless piece. After all, it was the invention of mortgage bonds that ultimately led to the financial crisis in 2008. And of course, the book would be vacant without mention of bonuses. Those fat sums of money handed out around December time to those who scored well enough to earn one. The size of a bonus measured the traders worth, and ego. Lewis adds and subtracts some zeros to give us an idea of how first and second-year traders bonuses were subject to a 'floor and ceiling.' And how the business 'froze' around bonus time. It was all anyone thought about. Michael Lewis explains that watching the faces of people coming out of their bonus meetings 'was worth a thousand lectures on the meaning of money in our small society.' The only difference between 1988 and now is that those excessive trader and executive bonuses are now part of a larger political and public discourse. In 'Liar's Poker,' Lewis describes how large salary bumps and bonuses are used to buy loyalty. But in reality, if an investment house across the street offers a better deal, the trader won't hesitate to go for more zeroes. Michael Lewis, is a respected financial journalist and non-fiction author. All of his books have been best-sellers for good reason. 'Liar's Poker' is an exemplary example of how truth can be stranger than fiction. Lewis describes life at Salomon like being in a 'jungle.' The players must be fiction, but, nope, they are real. The scary thing about this book is how timeless, and prophetic it is. Michael Lewis experienced the Wall Street crash of October 1987, and describes it in the book. And here we are, more than 20 years later. History repeating itself.

A hilarious and grimly realistic look at the world of investment banking - as true today (2011) as it was in the 1980s when originally written. This should be required reading for anyone who has ever thought they could beat Wall Street at its own game - in other words, a cold-blooded reality check for those poisoned by the fumes of the "get-rich-quick" myth. Although an autobiography detailing the author's career with Salomon Brother's in the 1980s, it also serves as an informative study on the turmoil that rocked the markets in the 1980s that resulted in a major change in investor focus from the stock exchange to the bond market - and it is this that set the stage for the infamous crash of 1987 as well as the problems we face today with the mortgage bond market. It all started here. Lewis pulls no punches with frank commentary or his brutal prose: he has no problem ripping aside our comforting illusions of the investment world and is equally ready to turn his dagger against himself as well as against his former colleagues. He puts to rest the myth that 'anyone can get rich doing this' - advice that many former 'day-traders' of the 1980s probably wish they had heard at the time. True, if you know what you are doing you can likely make money - but that requires a twenty-four/seven commitment to keeping an eye on the entire market - not just stocks and bonds but the dynamics driving the industries behind them - which very few can do without quitting their day jobs. He shows the results of the dark side of the market - the consequences of losing triple your original investment - and how hard it is to avoid this. The odds are definitely stacked against the casual investor. Best summary of all this information: don't do it. This book also is an excellent business case study about what happens when a firm suddenly finds itself out of its familiar territory and makes no provisions or changes to deal with it. Consider the fact that we have an investment bank doing business in Europe - that has no idea who the European banks are! (Yes, you'll find that in the text). Or management that refuses to concede that their perfect plan has nothing to do with the business reality. Or, worse, that the lowest members of the hierarchy are able to see instantly that a firm, the most profitable on Wall Street at the time, is doomed to fail. It does. Readers who are offended by the use of uncensored language would probably do well to steer clear of this work - Lewis does not make any attempt to tone-down either the facts or the language used by the players. He does not offer a positive spin on the risks involved in the investment game and he makes it clear that all players need to be careful about assuming how much their advisers really have their best interests at heart. This is all to the good - this book is all the more striking because of this. Definitely a must-read for those who have ever considered taking on the market or for those who desire a clearer understanding of what exactly goes on in the world of Wall Street. It isn't comforting - nor should it be. But at least if a person still feels able to take on the windmills after reading this warning, they will be making sure that they aren't the fool in the market.

I enjoy reading your work. Very honest and true . Financial Markets , the very heart of civilisation are contrarian. Connie doing what you do best . Exposing the wickedness of man under the sun. Great read ..

I tried reading this book, but I stopped about a third through it. It is well written. However, even with 40 years of business experience, including running finance and accounting departments and an MBA I found it hard to follow. There is mostly about a detailed description of the technical events in his career on Wall Street. Too technical for even me. I may have been wrong with thinking there may have been more personal information to to really get a feel for that world without a lesson and bonds and mortgages, etc. it wasn’t for me.

This was the second Michael Lewis book I've read, the first being "The Big Short", which I also recommend. As a financial advisor, I find Mr. Lewis' account of his time on Wall Street in the 1980's as a direct reflection of the kind of culture that no doubt persists to this day. I couldn't help but think that this same environment contributed to the financial meltdown of 2008. Yet, to some degree this book is the classic discussion of "nature" vs. "nurture": are you born the way you are or are you a product of your environment? Mr. Lewis would suggest that the culture of Wall Street, and perhaps most of the entire financial services sector (of which I am a part), can be so strong that one's actions, beliefs and values are greatly influenced by the environment in which one works. The influence from the environment can be so strong that at times one may not be able to see the forest through the trees. In other words, the environment dictates that ones actions are justified because everyone is doing it and that's just how things work...until they no longer work. In many ways, as an industry participant, I found it shocking how self-focused the organizations Mr. Lewis described in his book could be. Perhaps I found it shocking because I was always brought up with the ideals that if it was good for my customer, then it would ultimately be good for me. Yet, the book tells of many tales, some humorous and some very sad, of competition, deceit, success and failure. Now, in all likelihood, the examples cited by Mr. Lewis are examples that could be fit into any industry. The big take away for me was the realization of just how dog-eat-dog and self-serving our capitalist, democratic society has really become. Despite the fact that this was written in the 1980's, it is scary to think how little has changed. While perhaps our environment can have great influence over our actions (ie: nurture), perhaps the greatest sadness is that human beings, in general, repeat the same mistakes, generation after generation. This may be a clear reflection of really who we are (ie: nature). Thank your Mr. Lewis for your many great books. I'm looking forward to reading more of your work in the future.

Liars Poker by Michael Lewis is a Story of Salomon Brothers. More specifically, it is the author's personal account of the culture within Salomon Brothers and why the company ultimately was bought out in the late 90s. Lewis details his days as a trainee in Salomon brothers and tells the story of the legendary mortgage department headed by Lewis Ranieri. Back in the 80s, mortgage backed securities were non-existent. As interest rates rose to historically high levels, savings and loans across the country were in deep trouble. The interest rate they were paying to depositors was repricing far faster than their mortgage books. They were paying 15% on deposits and making 6% on loans. In such a desperate position, there was urgency to remove these mortgages from the balance sheet, which is where Salomon Brothers enters the picture. Lewis Ranieri had been building a mortgage department for several years prior at Salomon (on a theory that it would be profitable one day), and unlike every other investment bank in the country, was ready to start buying mortgages from these distressed S&Ls. In desperation, the S&Ls would sell their mortgages for a steep discount to Salomon, who would subsequently package them into bonds and sell to their institutional investors. Michael Lewis details how this empire was built while also describing the culture on the trading floor. "Lewie would say he thought the market was going up, and buy a hundred million [dollars’ worth of] bonds. The market would start to go down. So Lewie would buy two billion more bonds, and of course, the market would then go up." Accounts like these make this story--the story of the U.S. Housing market far more interesting than one may assume a finance book might be. In addition to the mortgage department, Lewis discusses the incentive compensation system at Salomon (where Traders and managers could make millions per year) and some of the events that caused Salomon to lose its competitive advantage to the likes of Michael Milken (Drexel Junk Bonds) and other investment banks. This book is a great inside look into Wall Street and for anyone in the finance industry, a must read.

Michael Lewis is an excellent author. In Liar's Poker, he describes his life at Salomon Brothers in the 1980's as a bond salesman. It is not a mere biography which is why this book deserves my 5 star rating. Lewis does an outstanding job in 3 different areas: First, he manages to make his story funny and entertaining. Sure, he may have exagerrated in some parts and selctively wrote about the more entertaining characters at Salomon, but that does not take away from the story of investment banking in those days. Second, he gives the reader an honest and fair story of young investment bankers. He not only tells us his story but also dabbles in the stories of some of his classmates. Any young business school or college graduate interested in investment banking would benefit greatly from his book. Third, he researched other areas of investment banking - not just the area where he was assigned. He has a big section on mortgage bonds which is extremely relevant to today's markets given the downturn in the housing market and subprime mortgage problems. Also discusses junk bonds and equities. It may sound dull in my review, but the way he writes about them is a lot more interesting which is why he is a bestseller author and I am merely an Amazon reviewer. I highly recommend Liar's Poker to those interested in investment banking, Wall Street or investing in general. If you enjoyed Liar's Poker, then consider Stewart's Den of Thieves.

A história é excelente para quem se interessa por mercado financeiro. Este foi o segundo livro do Michael Lewis que li (o primeiro foi Moneyball), e gostei muito o jeito que estruturou as histórias e como narrou os bastidores do ambiente de negociação nos mercados. Até traz a tona comportamentos dos envolvidos (que considero ainda bastante atuais) e a dinâmica de funcionamento entre as instituições, como a replicação de estruturas e ideias e como a concorrência funciona dentro dos oligopólios estabelecidos. Para quem não trabalha no mercado financeiro pode ser que faça menos sentido o conteúdo, mas não deixa de ser mesmo assim uma boa narrativa. Adquiri a versão digital e não encontrei nenhum erro de edição ou problema durante toda a leitura.

The book does a great job showing the culture that prevailed in the dirty world of bond brokers in Wall Street during the 80's. In an easy to read way, the book opens your eyes to the corruption, incompetence and dirt that permeated institutions like Salomon Bros. which ultimately led to the financial crisis of 2008. It's a must read if you want to understand the financial world of today.

Great book, and I'm so surprised at Michael Lewis' ability to write this book right after he quit Solomon. Would recommend to anyone who's interested in getting a job in the banking sector, or just has an interest in Wall Street.

There is vividness in the prose, a shrewd eye for details and characters, a quasi British sense of humor. Very entertaining.

Easily one of the most entertaining books about finance that I have read in the last several years. Well written, absolutely hilarious (I literally laughed out loud a handful of times), and so immersive. I could barely put the book down. As someone who works in finance, I found the characters so relatable, and the stories even more so. I've recommended this book to a lot of people over the years.