Liar's Poker, by Michael Lewis

Lewis remembers the period in the mid eighties when he worked as a dealer for Salomon Brothers, during a stock market boom which ended in 1987 with a crash.

This book was recommended in a newspaper article which was talking about the recent stock market downturn (I'm writing this in 2009). And the reviews the book has make it sound pretty good: I was hoping to get some dirty stuff on the greedy way that dealers worked, and perhaps find out exactly what it is that they do.

The book talks of how Salomon hit it lucky with a new type of business dealing in US mortgages, and made a ton of money before the competition caught on. My ideas about how investment banks work were confirmed - the management was pretty inept and didn't understand what the dealers were doing, but it was so easy to make money that the company expanded by taking on more and more dealers, without being too bothered about their qualifications.

But in the event, the book was quite a disappointment. It reminded me quite a bit of "The Soul of a New Machine": it is an insider's tale, feels quite dated, and is probably more interesting to people who are already familiar with the companies and characters than to an outsider. But while I could connect with TSoaNM, because it was talking about a world I knew, a lot of this book went over my head. And although it's interesting that he names names, none of the names means anything to me at all, and since it happened twenty years ago, it doesn't feel fantastically relevant.

Also, I didn't really feel I understood exactly how they made so much money. I could have done with a really basic, step-by-step guide to explain how it worked. Now in fairness, I think there was some explanation, but I found it very hard to concentrate on exactly what was going on - not so much that it seemed terrifically complicated (Lewis himself doesn't think they were doing anything brilliant), but I sort of mentally glazed over - it was just boring.

So not that great a read (for me) really.

Completed : 13-Jun-2009

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