Summery
Liar's Poker starts with Michael Lewis observing a game of Liar's Poker between John Gutfreund the Chairman of Salomon Brothers and John Meriweather chairman and bond-trader. Gutfreund says 1 million no tears(which means the loser cannot complain. Meriweather responds to this,"let's play with real money, 10 million. This shows the mindset of the investors and traders on wall street. You could just throw money around, and this led to their downfall.
Micheal Lewis was graduated from the London school of economics and looking for a job on wall street, when a recruiter from Solomon brothers recruited him but never offered a job. Michael later learns that Solomon Brothers never offers a job, but if someone meets with you, they recruited you and it was up to you to arrive and work. The 1980s came around and a salesmen named Lew Reneri came up with a genius idea which changed the face of banking, it was called mortgage backed security. Before Lew Reneri mortgages were sold in a singular fashion. They were also sold to big companies. Lew Reneri had the idea to bundle mortgages in hundreds and sell them to the public. This increased the amount of money loaned by 2100% in only 8 years. In 1997 public loans only amounted to 323 billion dollars. By 1985 public loans were up to 7 trillion dollars. Soon firm were giving money away which didn't exist. The market became unstable and collapsed. This was the worst collapse in the history of the united states. The market dropped almost a thousand points which in the time was half the DOW. In the same say transaction spiked as firms and banks scrambled to stay afloat. Solomon Brothers, did not go under but had to let go of thousands of employees. Michael Lewis made the cut and was not fired. Instead he got a bonus for helping the company level and later left wall street. Salomon brothers kept going until being bought by travelers group.
Micheal Lewis was graduated from the London school of economics and looking for a job on wall street, when a recruiter from Solomon brothers recruited him but never offered a job. Michael later learns that Solomon Brothers never offers a job, but if someone meets with you, they recruited you and it was up to you to arrive and work. The 1980s came around and a salesmen named Lew Reneri came up with a genius idea which changed the face of banking, it was called mortgage backed security. Before Lew Reneri mortgages were sold in a singular fashion. They were also sold to big companies. Lew Reneri had the idea to bundle mortgages in hundreds and sell them to the public. This increased the amount of money loaned by 2100% in only 8 years. In 1997 public loans only amounted to 323 billion dollars. By 1985 public loans were up to 7 trillion dollars. Soon firm were giving money away which didn't exist. The market became unstable and collapsed. This was the worst collapse in the history of the united states. The market dropped almost a thousand points which in the time was half the DOW. In the same say transaction spiked as firms and banks scrambled to stay afloat. Solomon Brothers, did not go under but had to let go of thousands of employees. Michael Lewis made the cut and was not fired. Instead he got a bonus for helping the company level and later left wall street. Salomon brothers kept going until being bought by travelers group.