Financial journalist Michael Lewis, author of The Big Short and Moneyball, penned his first work – a bestseller – in 1989.
In Liar's Poker, Lewis recounts his four-year stint at Salomon Brothers, the now-defunct Wall Street investment bank where the mortgage bond was invented.
While Lewis' detailed explanation of how Salomon reaped massive profits from the explosion in mortgage loans is instructive, his depictions of the larger-than-life personalities (like bond trader Lewis Ranieri and CEO John Gutfreund) jungle mentality, and other elements of the unsavory culture-du-jour are what adds immense color to this highly entertaining work.
A review by the New York Times was effusive in its praise of Lewis, closing "Whatever the case, he's obviously as good a writer as he was a bond salesman. Perhaps that's because both jobs involve being able to tell a good story."
A movie based on the book is in development, according to IMDB.
We've compiled 18 moments from Liar's Poker that capture exactly why the book became an instant classic.
The scene where the bank's CEO John Gutfreund challenges John Meriwether to a hand of Liar's Poker for $1 million.
The limits of reckless gambling on the Street were defined in the book's opening scene.
John Gutfreund proposed playing one hand of Liar's Poker, which requires gamesmanship and knowledge of probabilities highly valued by the traders, for $1 million. His opponent, John Meriwether (widely considered the firm's best player) didn't want to beat the CEO, so he got the boss the back off by saying he'd only play for $10 million.
Source: Liar's Poker
The scene where Lewis describes how miserable his friends are as analysts.
Lewis describes a friend working as an analyst who "was so strung out that he regularly nipped into a bathroom stall during midday lulls and slept on the toilet. He worked straight through most nights and on weekends, yet felt guilty for not doing more. He pretended to be constipated—in case someone noticed how long he had been gone... Many analysts later admit that their two years between college and business school were the worst of their lives."
Source: Liar's Poker
The scene where Lewis miserably flunked his first interview at an investment bank.
When a young Lewis revealed money was the only reason he wanted to become an investment banker – in an interview – here's the response he received:
"That's not a good reason. You work long hours in this job, and you have to be motivated by more than just money. It's true, our compensation is in line with our contribution. But frankly, we try to discourage people from our business who are too interested in money. That's all."
Source: Liar's Poker
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