Liar's Poker: Rising Through the Wreckage on Wall Street,   ISBN:9780140143454

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While it has been some time since I read Liars Poker it still brings a smile to my face by bringing back fond memories. What has renewed my interest and motivated me to write more of a validation than a review of Liars Poker was my current reading of one of Michaels other books - The money Culture. Having spent 42 years in municipal finance with, 23 of those years as a municipal bond analyst/portfolio manager/investment director, at a major institution I can speak with some semblance of authority. You would have to say that at various points in my career I experienced some of what he talks about. He does a nice job of pointing out the nature of characters, some of who, use to prey on unsuspecting porfolio managers. While most of his referrences are related to the corporate fixed income side, Munis had their share of thugs, thieves, but mostly honest people that were there to help you in various ways. Among the thugs and thieves are firms that are, in some cases, no longer in business. Who ever reads this book should keep in mind that the author, in citing what occured during the '80's, was in fact laying the foundation for what was and is ocurring in the capital markets during these turbulant times. Whether he knew it or not is not of material importance.

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Nutshell review - This is a very funny book. Lewis writes a great story but, more than this, it gives you a fantastic behind the scenes look at how some fund managers operate in the wild, wild west of financial markets. This a rough and tumble world where all too often the small investors get punished for the benefit of the big guns. Very funny, eye-opening and offers a glimpse into the ivory towers.

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I found this book very good to read especially during the current financial crisis. Even though the author wrote it in the 80s, it shows the culture and business of investing. The author used to be a bond salesman in the New York and London offices of Salomon Brothers.

The description of the S&L crisis is in a way similar to the subprime mortgage crisis of 2008. The greed and obsession with money made both crises possible. After reading this book, I realized that no matter how much regulation we have, we will experience similar events. Yesterday, it was the S&L crisis, today it is the subprime mortgage crisis, and tomorrow the greedy minds of Wall Street will create something even more interesting that will have more devastating effects.

For those who are not familiar with the business of high finance, this book will be an eye-opener. It shows what traders, salesmen, and executives of Wall Street firms do every day to make money by taking huge risks with the hope of a payoff. I absolutely loved this book and highly recommend it.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

Customer Rating: 

This book is very entertaining and an easy, enjoyable read. The author shares his personal experiences in a very accessible way, providing a glimpse into the workings and atmosphere of the financial services industry of the 1980's. The author also has a good sense of humor and his descriptions of the some of the characters at Salomon are priceless. Finally, the book is quite well written, which is much appreciated. Highly recommended. Paul Gehrman, Author, Kaleidoscope

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This book was written in 1989 by Michael Lewis after two years as a bond trader at Salomon Brothers. The book ranges over a numer of topics: his recruitment and training, Salomon's earlier rise to prominence in bond trading, and in particular its early dominance of mortgage bonds, the author's experience as a Big Swinging Dick in London, the rise of Drexel Burnham and junk bonds, the stock crash of 1987, and the author's subsequent departure from the bank.

Of particular interest today, two decades later, is the description of how Salomon created the first mortgage securities department on Wall Street, with Bob Dall and Lewie Ranieri selling Ginnie Maes. In 1979 a policy change by the Federal Reserve to fluctuate interest rates was accompanied by an explosion of debt and rapid growth in bond markets - and established players such as Salomons. Ironically, at first the mortgage market was hit badly by rising interest rates, but then two years later Congress passed a tax break for savings and loans that incented them en masse to securitize and sell their loans: the resulting flood into the market enabled a handful of Salomon mortgage traders to make $800 million in four years. The traders, however, were not individually compensated in line with their extraordinary profits, allowing them to be poached by Merril Lynch, First Boston, Shearson Lehman, Morgan Stanley, Prudential Bache and Drexel Burnham. The resulting competition reduced the bank's profits, but so also did the spread of collateralized mortgage obligations (CMO) that blended pools of mortgage bonds from Fannie Mae and Freddie Mac, creating instruments that were more predicatable and better priced. CMOs were then tweaked in various ways to sidestep regulation, and in particular to allow thrifts to carry them "off-balance sheet". Eventually Ranieri was promoted away from mortgage securities and pushed out of the bank.

The remainder of the book is more biographical, with numerous anecdotes and comments on the culture at Salomon's that I found entertaining but perhaps not as insightful.