A review by jackwwang
Liar's Poker by Michael Lewis

4.0

Lewis provides a vivid recollection of his four-year stint in the strange world of investment bankers as a bonds salesman with Salomon brothers. After earning an Art History degree from Princeton and a masters in Economics from LSE, Lewis happens onto a job with Salomon through a chance social meeting. The author was placed at the London office but his initial training and orientation in New York allows him to write of the drama and the personalities of the home office. Lewis quickly learns of the paradoxes and rules of the game in a counter-intuitive world of high-stakes trading. In spite of the fact that wall street and the egos and players that make up its minions are driven by money, it is rarely discussed in the open. Although education and intelligence is a prerequisite to being hired, it seems to quickly lose its premium and its application is almost discouraged at times. As one of Lewis' managers at Salomon puts it, "if you guys weren't trading bonds, you'd be driving a truck. don't try to get intellectual in the marketplace. just trade." In its stead, recklessness, arrogance, uninhibited greed, and a scheming mind are worth their weight in gold on the path to becoming a "big swinging dick," the proverbial king of the financial jungle. These character were all present in the remarkable Lewis Ranieri, a crude but skilled mailroom operator who rose through the ranks and built up the mortgage department of Salomon to be the most profitable department on wall street, before seeing it all fall to pieces as a victim to office politics. In his own experience in London, Lewis experienced great success in making money by ironically "blowing up" his investing customers in selling them toxic bonds to assist the company bottom line. Lewis constantly refers to the unorganized free-for-all nature of the Salomon organization, and how it lead to bitter in-fighting, common cases of internal sabotage, and a incoherent management strategy that eventually led to its downfall. Tellingly Lewis also constantly reminds the reader of the remarkable degree of ignorance of those around him who were supposed to be "experts of the market." It seems that the entire financial industry is one big bluff. Lewis finally attributes his decision to leave the trade at the peak of his money-making prowess to his unease with the character of his job which rewards him with grossly disproportionate sums of money for essentially no social contribution and what he judges to be a mindless and repetitive activity that borders on psychotic. Lewis' account was as convincing as it was disconcerting and prophetic. The very financial instruments he he rebuked as empty money-making vessels have led to our current recession. We can only hope that our current government have the sense and wisdom to change the structure of incentives that will reform such an insane industry.