Business

Liar's Poker: 8 key ideas

by Michael Lewis

The core ideas of Liar's Poker, each in under a minute, written in our own words. Want the full depth? Get the book.

1. IDEA 1 OF 8

   Lewis saw Wall Street from inside

   Lewis describes his years as a bond salesman at Salomon Brothers in the 1980s.

   He was surprised by how much money young traders could make and how little the system seemed to make sense.

2. IDEA 2 OF 8

   Training was intense

   Lewis describes the Salomon training programme, where new recruits competed for jobs.

   The atmosphere was harsh. In Lewis's account, the programme was a test of nerve, and new recruits knew that only some of them would stay.

3. IDEA 3 OF 8

   The trading floor was wild

   Lewis describes a loud, aggressive trading floor where traders took big risks.

   Status depended on profits. In Lewis's account, big bets could bring large rewards, and the loudest and boldest people often won the most respect.

4. IDEA 4 OF 8

   A betting game showed the culture

   Lewis describes liar's poker, a game traders played with serial numbers on banknotes.

   It reflected their love of risk and bluffing. In Lewis's account, the game shows how traders enjoyed taking chances and trying to fool each other, even for fun.

5. IDEA 5 OF 8

   Bonds became big business

   Lewis explains how bond trading became hugely profitable in the 1980s.

   Salomon dominated. In Lewis's account, the firm made huge sums by trading bonds, which made it the envy of its rivals.

6. IDEA 6 OF 8

   Mortgage bonds were born

   Lewis describes how Lewis Ranieri helped create the market for mortgage-backed bonds.

   It changed finance. In Lewis's account, these new products turned home loans into something that could be bought and sold, and the market grew quickly.

7. IDEA 7 OF 8

   Greed shaped behaviour

   Lewis portrays a culture driven by money and ego.

   Customers' interests were often ignored. In Lewis's account, those around him often thought of how much they could earn, and not about the people they served.

8. IDEA 8 OF 8

   Lewis left

   Lewis eventually left Salomon, uneasy with the culture.

   His book offered a critical look at Wall Street. Lewis presents his leaving as a sign of his discomfort, and the book became a well-known, critical account of that world.