Year 4 / Book 26: Liar’s Poker

26) Liar’s Poker by Michael Lewis

Michael Lewis is now one of the foremost non-fiction chroniclers writing today, particularly as concerns business. I’ve read The Big Short, Flash Boys, Boomerang, The Blind Side and Moneyball. And if you haven’t read the books, then you’ve probably seen at least one of the films. He has a brilliant way of identifying characters who can bring drier subjects to life, and give a topic a narrative arc and coherence (as well as emotional substance); he also has a dry wit, and the ability to explain complicated things in such a way that the less specialist reader (aka me) can understand them.

So I’d been looking forward to this for a while – it’s his telling of his time working at Salomon Brothers in the 80s, when they were one of the biggest investment banks operating in the US (and therefore the world). It is pretty entertaining stuff: the training programme the new recruits go through is laughable, the tales of excess simultaneously shocking and believable, and some memorable characters start to emerge (like someone Lewis calls the ‘Human Piranha’, or the firm’s leader John Gutfreund).

What was shocking, but shouldn’t have been surprising, was how much of the crash of 2008 was simply a re-run of what was going on in the late 80s. It’s all here – the collateralised mortgage obligations, the parcelling up of capital and repayment, the repackaging of sub-prime mortgages as triple-A investments – and this is 1985, not 2005. Now it makes total sense why Lewis was so well placed to write the Big Short – he understood completely what was happening, because he understood it so well from the inside 20 years before. Nevertheless, it’s still pretty mind-numbingly depressing: effectively the financial services industry had already screwed this up once, and then they just created even more complicated products that allowed them to convince themselves that it wouldn’t screw up next time. The training programme in the 90s should have had this book as the manual.

[By chance, I ended up finishing this book in the same week that I saw The Lehman Trilogy at the theatre, which is a wonderfully told story of how a business founded by immigrants selling cotton lost its heart, soul and substance….and how that had much to say about what had happened to the American Dream.]

As a book, it’s not quite as fluent, well-written or structured as some of Lewis’ later work, which isn’t surprising. So it doesn’t quite hang together as well as a narrative, and the characters that emerge most strongly actually come through in the latter third (with his two alternative ‘mentors’) – which is when I felt most engaged. It is more personal, though, and gives an insight into Lewis’ own grappling with the world in which he has found himself, and the inherent moral paradoxes of how it operates. A good place to start if you’re coming to his work fresh, but ultimately not his best.

Score: 7/10

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