Tag Archives: junk bonds

Liar’s Poker

Brutal biography of one of the premier investment banks to work with in the 1980s, the Saloman Brothers. Michael Lewis joined the firm fresh out of London School of Economics and spent the next three years from a downright rookie to a bond salesman raking in millions for the firm and while at the same time enriching himself with bonuses from the firm. Its an inside look at the frenzy of an investment bank, the cutthroat business where deception is the name of the game, and ethics is kept in the waste basket. Michael has shredded Saloman Brothers like no one has done before to any firm in which he was first employed. Mortgage bond market was created by Saloman Brothers themselves out of nothing. Housing loans were bundled into attractive lots and sold as bonds in the market. Equity, government bonds, municipal bonds etc. were frowned upon, whereas bond traders were the stars. Corporate equity markets i.e. the stock markets were considered as anathema in Saloman Brothers because bond markets is where the monies lie and where you can play the game of deception better. Michael has dwelt a lot on junk bonds created by Micheal Milken of the Drexel Burnham Lambert fame while giving passing reference to Ivan Boesky of the insider trading shame. People don’t stay in investment banks for long time if the firm does not pay them enough, so there’s no loyalty involved and there are enough raiders for your talent ready to pay unheard of amounts and promised bonuses. Quite a devastating look at the insides of a greedy enterprise. I guess if someone were to write about the other investment banks of that era, they would have come up with a similar effort. Goodreads 5/5

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