Review of "Liar's Poker"

Liar’s Poker by Michael Lewis is a first person account of his employment with Salomon Brothers during the time that a number of new financial instruments such as mortgage backed securities and junk bonds were created. In contradistinction to the books that we’ve read thus far this semester, with the exception of a section of Galambos, the book is unique in it’s insider insights into the culture and context of these developments as well its colorful character descriptions.

Lewis memoir is in a way a eulogy for Saloman, which was purchased by Citigroup in 1998. By recounting the many ways it was unable to properly manage its growth, diversify its offerings when new ones were created, create a stable, sustainable staff Lewis shows how the company analysts had trouble looking at themselves. The listing of the sophomoric pranks, culture of fatness, lack of seriousness on behalf of the trainees, inability for upper management to maintain talented employees, the internecine departmental conflicts leading to purges of talented people as well as the desire to project a grand image in new and emerging markets (London) that hadn’t yet wholeheartedly embraced the New York model reads like a litany of decadent symptoms that would have been cause for it’s buyout and dismantling by those such as Michael Milken, who did try to do just that.

In the tight focus on Saloman, it’s investors and the companies it interacts with the broader economic implications fall by the wayside. For instance, one of the topics which has been discussed extensively in class has been the government’s regulatory relationship to markets. We learn that Lewis Ranieri was instrumental in creating the framework for the national legality of mortgage bonds by transforming the state-to-state legal codes presiding over such issues into a national one.

While in accordance with mass-market consumers values, the book is light on it’s citation. It’s not just the foregoing of an annotated bibliography, but the stating of certain events and circumstances happening without giving much background. I think this a strength as it does not scare away the casual reader, but an annotated companion piece, preferable free and posted on the author’s website, would be a welcome addition to those interested in following at least some way down a path of further inquiry.