I’ve just read (finally!) Michael Lewis’s Liar’s Poker: Rising Through the Wreckage on Wall Street, the classic 1989 memoir of life at Salomon Brothers investment bank in the run-up to the Wall Street crash of 1987. Lewis was hired to trade mortgage bonds (yes, the mortgage bonds that precipitated the crash of 2008) fresh from the London School of Economics, dispatched to Salomon’s legendary training program in NYC, then shipped back to London.
Lewis was a gifted salesman who made millions for the firm, but he was also deeply skeptical of the whole enterprise. This is an unbeatable combination, as it situated him perfectly to critically examine the culture, economics and ethics of the overheated bubble as it expanded, expanded, and, finally burst.
It doesn’t hurt that Lewis is a fantastic writer with a particular talent for explaining the minutae of investment banking without making you want to gouge your own eyes out. Through vivid portraits of the movers and shakers on Wall Street, Lewis recounts the origin stories of junk-bonds, corporate raiding, mortgage bonds, the S&L crisis, and the founding of Fannie Mae and Freddy Mac (both founded at the behest of Salomon in order to backstop the mortgage bond market).
It’s been 20 years since this was published, but there’s never been a better time to read it. The hairy-knuckled, hyper-competitive, pirahnoid Wall Street and City traders he describes here could be the same hedge fundies who’re poised over the tub with razors at their wrists today.