Liar's Poker: Rising Through the Wreckage on Wall Street
by Michael Lewis
List Price:
Our Price: $7.95
You Save: $8.05 (50%)
Availability: Usually ships in 1-2 business days
Buy Used: from $0.01 (click here)
Category: Book
See more book details and other editions
Book Summary Information
Author: Michael LewisEdition: Mass Market Paperback
Audio: English (Unknown); English (Original Language); English (Published)
Published: 1990-10-01
ISBN: 0140143459
Number of pages: 256
Publisher: Penguin Books
Book Reviews of Liar's Poker: Rising Through the Wreckage on Wall Street
Book Review: Interesting and Educational!
Summary: 5 Stars
Liar's Poker is a game involving deceit, skill, and luck. "Liar's Poker," the book, is a much more interesting topic. Lewis was a Soloman Brothers bond salesman working mostly in London. The book's intent is to describe and explain events and attitudes of the 1986-era.
Wall Street was the "in thing" in the mid-1980s. Forty-percent of Yale's 1986 graduating class (1,300) applied to just a single bank - First Boston. Lewis graduated a few years earlier from Princeton (art history) and had just finished graduate studies at the London School of Economics when he was selected out of 6,000 applicants for one of 127 trainee positions at $48,000; fellow classmates included ten Harvard MBAs, 70 other MBAs, and 15 PhDs. Lewis' account of his training offers no lessons.
Soloman had a near monopoly on bond trading at the time, and by 1980 the mortgage market exceeded the U.S stock market. Soloman's mortgage bond trading made more in 1985 than the rest of Wall Street. The resulting giddy profits allowed employees to get away with incredible rowdy, boorish behavior.
An early major problem with mortgage bond trading was pension funds and foreign buyers' reluctance to get involved with instruments that could be paid off at any time. CMOs and tranches, introduced in 1983, resolved this problem - allowing buyers to select both the maturity period and risk desired. Eg. a first tranche contained maturities of 5 or less years, 2nd 7-15 years, 3rd 15-30 years.
After training, Lewis was sent to London and assigned to cold calling. Some Soloman traders would take advantage of customers and unload dogs that the firm was holding and couldn't get rid of; sometimes this bankrupted the customer or got the individual buyer fired. Lewis quickly learned better approaches - arbitrage, contrarian thinking, and exploiting secondary impacts (eg. buy oil after Chernobyl).
Another ethics problem Lewis encountered was a manager that claimed credit for one of Lewis' innovative sales. The "good news" was learning how Lewis cleverly obtained revenge.
Expense accounts for Lewis and his associates were unbelievable - $400/night for a hotel (almost 20-years later I was limited to $50). Lewis himself earned $90,000 his second year - half bonus.
Eventually Soloman's low ethics, free-spending, high charges, and the hundreds of alternative firms almost led to the London unit's demise. (The market was much more of an oligarchy in the U.S.) Regardless, the firm's bad decisions (eg. temporarily getting out of mortgages) and penny-pinching bonuses led to a serious brain drain.
The most interesting portion of the book is Lewis' knowledge of Michael Milken. Milken saw bonds from blue-chip companies as risky - little upside, lots of downside. (This was the era when American manufacturing was collapsing.) Small new companies and large old companies with problems could not persuade risk-averse commercial bankers and money managers to lend to them. Milken, however, analyzed the data and realized these risk premiums were excessive.
Soloman tried to get into the junk bond market, but was undercut by a top managers of its resuscitated mortgage bond unit who followed the junk-bond presenters around and undermined them. (Lack of top leadership?) The number of new junk bonds rose from nearly 0 in the 1970s to $839 million in 1981, and $12 billion in 1987 - 25% of the corporate bond market. The market further expanded by using junk bonds to finance raids on undervalued corporations, then for LBOs and M&A. Drexel Burnham (Milken's firm) netter fees of $100+ million for single takeovers. Soloman, however, misses out.
Lewis left, and shortly afterwards Buffett rescued the firm via a $700 million convertible preferred investment. A 1991 scandal involving government bonds led to Buffett taking over as CEO for ten months, and in 1997 the firm was sold to Citigroup.
Summary of Liar's Poker: Rising Through the Wreckage on Wall Street
In fiction there was Bonfire of the Vanities; in reality, there is Liar's Poker--the fascinating insider's account of what really happens on Wall Street. This irreverent and hilarious birds-eye view of Wall Street's heyday will appeal to anyone intrigued by the allure of million dollar deals. Now in trade paper. First serial to Manhattan Inc.Business Books
Book Subjects
- Arts & Photography
- Biographies & Memoirs
- Business & Investing
- Children's Books
- Comics & Graphic Novels
- Computers & Internet
- Cooking, Food & Wine
- Entertainment
- Gay & Lesbian
- Health, Mind & Body
- History
- Home & Garden
- Horror
- Law
- Literature & Fiction
- Mystery & Thrillers
- Nonfiction
- Outdoors & Nature
- Parenting & Families
- Professional & Technical
- Reference
- Religion & Spirituality
- Romance
- Science
- Science Fiction & Fantasy
- Sports
- Teens
- Travel
Most talked about in Business Books
Discovering the Possible: The Surprising World of Albert O. Hirschman (Titles from the Helen Kellogg Institute for International Studies)by Luca Meldolesi
University of Notre Dame Press; Published: 1995-04; Hardcover; Book
Price in other shops:
What You See Is What You Get: My Autobiographyby Alan Sugar
Macmillan UK; Published: 2011-02-24; Hardcover; Book
Best price: $4.00
Price in other shops:
Sloan Rules: Alfred P. Sloan and the Triumph of General Motorsby David Farber
University Of Chicago Press; Published: 2002-11-15; Hardcover; Book
Best price: $16.08
Price in other shops:
The Hancocks of Marlborough: Rubber, Art and the Industrial Revolution - A Family of Inventive Geniusby John Loadman, Francis James
Oxford University Press, USA; Published: 2009-11-23; Hardcover; Book
Best price: $27.00
Price in other shops:
William Beveridge: A Biographyby Jose Harris
Oxford Univ Pr (Txt); Published: 1977-09; Hardcover; Book
Price in other shops:
The Accidental Investment Banker: Inside the Decade that Transformed Wall Streetby Jonathan A. Knee
Oxford University Press, USA; Published: 2006-08-15; Hardcover; Book
Best price: $5.50
Price in other shops:
The Vital Few: The Entrepreneur and American Economic Progress (Galaxy Book)by Jonathan Hughes
Oxford University Press, USA; Published: 1986-06-19; Paperback; Book
Best price: $32.30
Price in other shops:
The Bin Ladens: An Arabian Family in the American Centuryby Steve Coll
Penguin Audio; Penguin (Non-Classics); Published: 2009-03-31; Paperback; Book
Best price: $1.54
Price in other shops:
The Other Side of Wall Street: In Business It Pays to Be an Animal, In Life It Pays to Be Yourselfby Todd A. Harrison
FT Press; Published: 2011-05-22; Hardcover; Book
Best price: $14.60
Price in other shops:
Mr. China: A Memoirby Tim Clissold
HarperBusiness; Published: 2005-02-01; Hardcover; Book
Best price: $19.50
Price in other shops:
Similar Books and other products
Barbarians at the Gate: The Fall of RJR Nabiscoby Bryan Burrough, John Helyar
Published: 2003-06-01; Paperback; Book
Best price: $6.92
Price in other shops:
Den of Thievesby James B. Stewart
Touchstone; Published: 1992-09-01; Paperback; Book
Best price: $3.92
Price in other shops:
Barbarians at the Gate: The Fall of RJR Nabiscoby Bryan Burrough, John Helyar
HarperBusiness; Published: 2009-12-01; Paperback; Book
Best price: $5.37
Price in other shops:
Traders, Guns and Money: Knowns and unknowns in the dazzling world of derivatives Revised edition (Financial Times Series)by Satyajit Das
FT Press; Published: 2010-07-17; Paperback; Book
Best price: $11.85
Price in other shops:
The Big Short: Inside the Doomsday Machineby Michael Lewis
W. W. Norton & Company; Published: 2010-03-15; Hardcover; Book
Best price: $8.61
Price in other shops:
Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions (Wiley Finance)by Joshua Rosenbaum, Joshua Pearl
Wiley; Published: 2009-05-04; Hardcover; Book
Best price: $39.95
Price in other shops:
Barbarians at the Gate: The Fall of RJR Nabiscoby Bryan Burrough, John Helyar
HarperBusiness; Published: 2008-11-01; Hardcover; Book
Best price: $14.64
Price in other shops:
When Genius Failed: The Rise and Fall of Long-Term Capital Managementby Roger Lowenstein
Random House Trade Paperbacks; Published: 2001-10-09; Paperback; Book
Best price: $7.48
Price in other shops:
Monkey Business: Swinging Through the Wall Street Jungleby John Rolfe, Peter Troob
Business Plus; Published: 2001-04-01; Paperback; Book
Best price: $9.00
Price in other shops:
The Big Short: Inside the Doomsday Machineby Michael Lewis
W. W. Norton & Company; Published: 2011-02-01; Paperback; Book
Best price: $8.91
Price in other shops: