A screenwriter may have fed Michael Douglas the line “Greed is good” but he might have been quoting a Wall Street man verbatim. I wish Michael Lewis’s memoir Liar’s Poker were also a piece of fiction, but it’s all too real.
Fresh out of the London school of economics, Lewis landed a job at Salomon Brothers, the Wall Street investment firm that invented the mortgage bond. During the next few years, Lewis grew from whipping boy to bond salesman and earned millions for the company before he finally had enough and quit.
Salomon Brothers may have been the crème de la crème of investment firms, but their management was a mess, and it was every man for himself. Traders made outrageous deals, prioritizing their own bottom line over their client’s well-being. Pranks were endemic-the most popular ones were pulled on the new kids who were already terrified to be there (one trainee couldn’t even step off the elevator to the trading floor). They cracked horrible jokes and ate more food than I thought was humanly possible. The men (and they were basically all men) didn’t go to management to deal with coworker drama. They settled the scores themselves. At one point, a colleague took credit for a great deal Lewis made. He then created a nearly-identical investment deal and didn’t tell the guy, which made management doubt the thief.
The book’s title refers to a game Solomon’s bond guys liked to play. It’s a bluffing game, based around guessing the serial numbers of the dollar bills the other players are holding. Lewis says the best players are usually the best traders because it requires gamesmanship, and an understanding of probabilities. In the end, the players bluffed themselves. Thanks in part to Wall Street’s dangerous game, the market collapsed in 1987. Looking around today, it doesn’t look like these guys learned their lessons.
I have mixed feelings about this book. The behind-the-scenes stuff is fascinating and darkly funny. But quite a lot of the book is dry and boring. It’s like The Wolf of Wall Street meets an 8AM Intro to Econ class. I’ve read and enjoyed Michael Lewis’s other books like the Big Short and Moneyball, but this one didn’t quite do it for me. Still, if you’re interested in Wall Street, the book is worth picking up.