How the 80s became the naughties

One of the defining events of the naughties – the first decade of this millennium – was the global financial crisis. How mortgage defaults in a few US states, leveraged many times over through the global financial system, brought about a crash in the world’s stock markets and a world-wide recession. But its genesis was in 1980s Wall Street as chronicled by ex-Salomon Brothers employee Michael Lewis.

Liar’s Poker

Vulgar, incredible and fascinating take on 1980s finance

I listened to the audio book earlier this year, and Lewis’ tale blew my mind. Here was a person who, by rights, should not have been in that place at that time, as he didn’t have the traditional qualifications to get a job trading at Salomon Brothers, nor did he even interview for the job. Furthermore, instead of continuing to make wads of money, he chose to quit and write an account of it. Lastly, it was written well in a very accessible style. The chance of all these things happening must have been minuscule – and yet they did.

If Lewis is to be believed, and he presents himself credibly, Wall Street in the 80s was inhabited by a bunch of racist, chauvinist cowboys who through luck more than wisdom and possessing a complete disregard for their customers managed to make out like bandits. This is, of course, completely counter to the image that Wall Street projects of itself to its customers.

The story is part-memoir, part-history and part-ethnography. The author’s prior education was in art history, and second career was in journalism, and he picks out the threads that led to the particular situation that he was dropped into, as well as charting his progress through the firm and documenting its culture. It is a unique book, and truly fascinating, even if you don’t have a background in finance let alone the bond market.

My rating: 4.5 stars

Liar’s Poker

First-hand account of Wall Street’s cowboy culture and the rise of mortgage bonds

Most recently, Kate gave me a paper copy of Liar’s Poker, given how much I enjoyed the audio book. I quickly discovered that it was a rather different book.

Liar’s Poker was Lewis’ first book, and the text really does feel like it. For example, paragraphs feel like they are crammed full of information. In the audio version this wasn’t so obvious. Also, there is a great deal of background, historical information in the middle of the book, which I found bogging down the interesting personal tale, and much of which was excised from the audio book version. The book would’ve benefited from more aggressive editing, and the audio book, being an abridged version, had effectively received this.

That said, it remains a compelling tale. All of the aspects that I liked in the audio book version, I still found in the paper version, although it was less focussed. Perhaps if another reader hadn’t experienced the audio book first, there wouldn’t have been an expectation of a fast pace already set.

My rating: 3.5 stars