Like many college graduates in recent years, Michael Lewis aimed at a career in investment banking. Unlike most of the others, Lewis did not take either himself or his ambitions with full seriousness. He majored in art history rather than economics at Yale; and, far from pursuing a career in the bond market with tenacity, he received his job as the result of an accidental meeting during a London dinner. The dinner in question, which Lewis describes with a sharp eye for the ridiculous, was one for the Queen Mother Elizabeth.
Lewis found that his job at Salomon Brothers was paradoxical. On the one hand, as an analyst, he was the lowest of the low and often functioned as an errand boy for more senior members of the firm. On the other hand, he had the power to engage in trades that involved millions of dollars. The training program at Salomon Brothers was reputed to be the best in the world and virtually guaranteed its graduates a successful career in the market. Further, the lucrative bonuses available to the analysts meant that men (and a few women) in their mid-twenties might earn several hundred thousand dollars a year.
Lewis soon discovered that the job contained many drawbacks. The workload was intense, and many of the analysts developed odd quirks, such as eating binges, as a result of stress. Competition led to frequent attempts to hijack the deals made by others. A veteran of business infighting deprived Lewis of the credit due to him for his most successful deal. One personality stood out among all the others. John Gutfreund, the controlling partner of Salomon Brothers, brought the company to unparalleled success by his shrewd measures of expansion. Gutfreund scorned science and relied on his innate psychological skill and toughness. His penchant for the game of Liar’s Poker, a game based on deception and bluff, exemplifies his unusual approach to business.
Unfortunately for Gutfreund and his company, the firm overreached itself through its program of issuing junk bonds. It was eventually forced to make drastic cutbacks. Lewis, who had by this time seen enough, decided to get out of the market. He departed from Salomon Brothers a happier and richer man. His book offers interesting and amusing insights into the world of high finance which the customers never see.