Wall Street is a hub of financial experts. These experts keep finding some gaps in the market, which could be exploited to make loads of money. That is the story of Salomon Brothers as told by Michael Lewis in an amusing way.

Bond traders are known for their unusual habit of playing “Liar’s Poker” a one-of-a-kind game that pushes anyone beyond its limits and questions your ability to make split-second-decision, judge risk and increase/decrease your wealth.

The book shows the rise and collapse of Salomon Brothers. In general, it focuses on how they managed to increase their influence with the help of unethical methods and which resulted in their quick downfall. Before the crash in 1987, Salomon fired thousands of employees as a result of inadequate policies and practices used to regain control over the market. The time for growth ended, with the rise of other competitors who replicated Salomon Brothers’ methods to be used against them.

Liar’s Poker showcases the egocentric culture that prevails on Wall Street. The book describes the complete lack of etiquette and ethics among the traders. Lewis’s reflections on how the environment corrupted his soul makes it quite clear that an outsider has to be very skeptical of what Wall Street is trying to convince you of. They usually have but one interest - to make money at the other's expense.

Michael Lewis's Liar's Poker was fun as well as informative about wall street in the 70 and 80s. I learned about the Solomon Brothers' culture and the introduction of mortgage trading as a product. It was interesting to learn about how someone started of in the training program and would quickly be fed to the wolves. I am not sure if I would have been a good fit back then but probably for the best. None the less, the book kept me on my toes. It sounded like there were excess greed and disregard for the client's best interest back then. It was also interesting to see how the firm had a disregard for the excess growth through exorbitant new offices, especially in London, and the cutthroat culture that ultimately led to the demise of the firm in the end because they were not open to new ideas. In this case, letting many of their star players leave because they would not compensate them "fairly" considering how much money they made the firm and would just go to another firm that would pay them better. In the end, these individuals wound up creating a new market for junk bonds and Solomon was not about that. It is a great reminder you can be a leader in the industry but if something new comes along and you just disregard it because it would take away business from your breadwinner it may end up ruining you.

A book of religious quality. Filled with useful titbits about John Gutfreund, and SB top trader John Meriwether (had the vital attribute of being able to hide his state of mind) and just the general life of an investment bank in the 1980s.

First rule. Never mention that you are motivated by money and highlight instead that you are motivated by the thrill of the chase. Second, when interviewed for the trainee position (bitch) on the 41st floor, never use a chair to smash the window you have just been asked to open and that you find is impossible. It was a favourite interview question.

Michael Lewis charts how:
1.tPaul Volker (Fed chairman in 1980’s) liberalised interest rates and enabled debt markets to boom, which became the strength of SB.
2.tHow the equity department attempted to snatch trainees from the trading floor to the most boring department (equity research) and became so desperate they hosted a boat party where all the traders attempted to hide.
3.tThe power of the back row in the presentation classes at SB. They pissed off the goody two shoes front row equity trainees “those who say don’t know, are those who know don’t say when asked for their opinion''.
4.tThe bitter battle between traders and salesman. Salesman wanted the best for clients, traders wanted profits, yet traders would screw over clients (selling bonds to A&T knowing the price would go down having shorted them). Traders invariably won, as they generally acted in the “best interests” of the company. Salesman did not as they only acted for themselves.
5.tHow Lewis Ranieri revolutionised SB and what a Big Swinging dick he was (would eventually get asked to leave SB when it rapidly declined). Michael Lewis eventually leaves SB, which is then acquired by Citi.

Classic Quote:
SB has the temperament of a Lebanese taxi driver, they either had our foot slammed down on the accelerator, or on the brake. We knew no moderation and had no judgment.

As always, a compulsively readable book from Michael Lewis. I knew that this would further indulge my distrust and resentment of Wall St. and it did just that. Also this was eerily prophetic with its explanation of the inception of mortgage backed securities and judgement of unsustainable finance strategies. Probably one a very few finance books that will make you laugh.

Michael Lewis' story of the debaucherous 1980's Investment Banking scene is fun and crazy and pretty funny. I'm not too sure why this book gets so much praise, but I am assuming that when the book came out, it shed light on a very mysterious scene that not many other forms of media had covered. Now we have the Wall Street world popularized by a ton of different outlets, and the events in this book seem less extraordinary.

The book provides several little finance gems here and there, and also gave a lot of background and some interesting thoughts on how the financial system worked (works?). Although bond trading is very different now, I feel like those hardcore salesmen have just moved into equities for the present time. Perhaps if we ever have floating rates again, bonds will resurface. It would be interesting to read something like this on the options and swap world of today.

The book is an easy and fun read, and although tells a relatively straightforward story of the main character's dive into the Finance world, remains engaging and fast paced.

I've been always interested in the 2008 financial crisis and in this book I learned the origin story of the monstrisity of the bond market that led to the financial crisis. Unfortunately I read it in my native language and the translation was quite horrible. But the book itself was entertaining and gave more insight of day to day on Wall Street and it's politics.

Michael lewis always does a fantastic job narrating and describing seemingly bland topics in intriguing and captivating way.

His description of Lewis Ranieri and his team of glutinous pranking bond traders is downright hilarious, but after standing still for a brief second one realises how harrowing it actually is that one man can form a financial market that we know today.

I did find his personal stories at Salomon brothers to be more engrossing than the story of Salomons brother climb to the top. Sometimes the initial story of Salomon brothers be tiresome and badly written compared to the rest of the book/Michael Lewis’ other books.

Michael Lewis stated that he wrote liars poker as a cautionary tale, but as he states in his own book, people love risk, and what he describes is a high risk poker game with a couple drops of brotherhood sprinkled in. How could he not envision that young hungry university students would be drawn to this world?

I have read a few books by this author and Liar’s Poker might be my favorite. I enjoyed that in Liar’s Poker Lewis was able to tell stories that he experienced first hand, which allowed him to provide some additional - and often funny - details. I also appreciated the opportunity to learn more about financial history, without having to drudge through a dry financial book.

Reading Liar’s Poker might also motivate me to read Lewis’ other book, The Big Short (or at least rewatch the movie), since some of the events explained in Liar’s Poker set the stage for the Great Recession.

Ultimately this is a fun and quick read for anyone interested in finance/economics. Thanks to my bro @Dylan for the recommendation.

Reading this book was like attending a reunion for the 1980s. Many attending look familiar but you can't quite remember them, others leap out as OMG there's Milken! And MCI! Others you don't recognize at all until somone reminds you. Just like any reunion, there are good, bad and indifferent memories and interactions.

This is Lewis' memoir of his years at Salomon Brothers as a bond trader under John Gutfreund. It is also a biography of the rise and first fall of the mortgage backed securities/bond market which was invented by Salomon. It is in a sense a memoir of a world whose edges I glanced past in the 1980s, as a young transactions lawyer who also represented coops and condos as general counsel (which in fact I still do nearly 40 years later). You see, I was involved in closing the residential mortgages that gave rise to the thrifts, and the commercial mortgages that also were all fed into the securitizations sold as bonds. I also was there during the crash of 1987 and the subsequent workouts with banks and government. Banks came and went. Products offered by banks came and went. Still do. I also had as clients many of those bond traders -- either directly as they bought and sold apartments and indirectly as they served on coop and condo boards in the buildings in which they owned apartments. This was such a nostalgia read. But it's also completely relevant to day because it is all still present and infact led to another crash in 2008, and I'm sure will lead to yet another at some future point. It's the nature of the business; it's a blood sport.

For those not on a nostalgia trip - and I did not set out for one - this is an excellent read on two levels: it's an engaging story of one young bond trader's experience before turning to writing full time, and it's incredibly well written in explaining how it all works, i.e. bonds, thrifts, swaps, difference among the investment houses, and so on. Lewis does a great job alternating between personal story, anecdotes, factual information, and explaining tough concepts.

There's one particular bit near the beginning that I intend to share with a client of mine. It talks about interest-rate swaps which were invented around 1980 and still appear now and again. A year ago a client of mine was nearly suckered into an interest rate swap on a commercial loan he was taking out to purchase his office condo. Before signing the commitment, he wisely sent it to me to review. When after several readings of the description of the interest rate swap (which basically is how the interest rate and thus monthly payment was going to be for the 10 year term of the mortgage) and an in depth discussion with the banker 'selling' my client the loan, I could not understand what his payment per month was going to be or how calculated. I called a colleague who is a commercial mortgage broker and asked him what the f--- this was or had I become stupid, he told me that it is all smoke and mirrors and that the rate would adjust constantly, that monthly payments would not be fixed. I called my client and told him to forget it (turned out he didn't understand it at all either) - and he went with a fixed interest rate. Good thing too because a month later rates started skyrocketing and he would have been screwed under the swap set up. But it shows you that all the stratagems and ploys circle back again and again.

Although I had known about this book for years and generally enjoy the work of Michael Lewis, I had not read this book until I picked up a very cheap e-book version ($2 or $3, I think) on Google Play. I really enjoyed the book, which benefits from Lewis' ability to explain complex financial concepts concisely and humorously and his ability to capture human personalities. Like another great book on Wall Street from the same time, Tom Wolfe's "Bonfire of the Vanities," "Liar's Poker" is a bit dated and has a "Dr. Evil" quality when dollar values are cited ("$1 million dollars"). At the same time, the author was in many ways present at the dawn of the financialization of the American economy. One really can trace a straight line from Salomon Brother's creation of mortgage bonds to the housing crash and economic disaster of the past five years.

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.

A fascinating account in general about a Wall Street investment bank, a rags-to-riches-to-rags story. Its very fast paced, but I guess it requires a basic level understanding of financial markets and the various instruments, to be enjoyed fully. I think I would have enjoyed my finance courses in b school better if I had read this earlier.