Liar’s Poker

Originally published in 1989, Liar’s Poker is a nonfiction book that details author Michael Lewis’s experiences as a Wall Street bonds salesman in the late 1980s. Liar’s Poker is a betting game played with single dollar bills. In the book, bond traders at Salomon Brothers, an investment bank, play a much bigger betting game involving hundreds of millions of dollars, but the skills they require—daring, quick thinking, and ruthless bluffing—are basically the same as in the betting game.

Chapter 1 describes the extreme bravado of bond traders, who must juggle huge portfolios of securities while defending against office politics. Chapter 2 explains how author Michael Lewis, as a young and naive innocent, stumbles into a trainee position in the highly competitive and risky world of the Salomon bond department.

Chapters 3 and 4 explore the world of the Salomon trainee, who must endure months of droning lectures and the petty cruelties of teachers and trainees, then cultivate trading-floor managers in the hopes of landing a plum job instead of a mere clerk’s position.

Salomon is a leader in the securities business, and Chapters 5 through 7 explain how the company develops and markets the first mortgage bonds and makes a fortune during the savings and loan disaster. Success begets its own troubles, and Salomon begins to falter.

In Chapters 8 and 9, Lewis learns the often-dishonest art of bond sales at Salomon’s London branch. His initial efforts sometimes cause punishing losses for customers, but he lands on his feet and grows into one of the best salesmen.

In Chapters 10 and 11, a new security, the “junk bond,” takes investors by storm, leaving Salomon scrambling to catch up, but disaster strikes before the firm can find its way. Lewis manages to survive undamaged, and in the Epilogue, he explains why, after two successful years, he quits the firm.

Lewis often wrestles with ethical issues raised in the bond-trading business, and just as often, he finds fault with his own weaknesses. The descriptions of his fellow workers are sometimes affectionate, sometimes humorous, and often scathing. Liar’s Poker paints bond trading in the 1980s as a roguish adventure that asks a lot of its participants but rewards them well.