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Money money money, ain't it funny
Dec. 13th, 2011 07:04 pmSo, while I was reading The Big Short, which I had borrowed from my father, who is an insurance executive, I told Paul, who used to be a Merrill Lynch executive, about it, and Paul lent me a gigantic stack of books from his Big Business Behaving Badly shelf. So you may be seeing a number of reviews of finance/big business books from me in the near future.
This week, I read Liar's Poker: Rising Through the Wreckage on Wall Street, also by Michael Lewis. This one is partly a memoir of Mr. Lewis' short stint at the investment bank Salomon Brothers for a few years in the eighties, and partly an investigation of everything that was ridiculous about Salomon Brothers over the course of a few decades, but mostly the eighties.
Salomon Brothers, in the eighties, was apparently so ridiculous that Michael Lewis not only got a job there, but did really well, despite not really understanding much of what he was doing. According to himself, Michael Lewis got his undergraduate degree in art history from Princeton, got a master's degree in economics because that was the only degree investment banks accepted even when the jobs didn't have anything to do with knowing economic theory, landed a job at Salomon Brothers after talking to some guy's wife at a benefit dinner, and spent most of his time at the firm trying to copy other successful people and not usually having any idea what he was doing until after he'd been doing it for several months. He was a bond salesman, and apparently, for a bond salesman at Salomon Brothers in the eighties, actual knowledge of the markets was helpful, but optional. Sitting close to someone else who understood the markets and whose lines you could parrot was good enough, or else you could sell what the traders told you to sell and end up with angry customers but much acclaim within the firm (apparently, customer service was low on the firm's priority list). Beyond a reasonable level of general intelligence, what Salomon Brothers really seemed to require from its employees was the ability to take a lot of abuse. If you took enough abuse, you would be allowed to start dishing it out.
Lewis' portrait of the sociology and politics of Salomon Brothers is somewhere between hilarious and depressing. On the depressing end, it was all hugely dysfunctional: the interdepartmental backstabbing eventually led the firm to be unable to compete with other firms because it was too busy competing with itself. It was also discriminatory, with female trainees being disproportionately assigned to departments with little prestige and subject to harassment, and Wall Street in general being so WASPy that Salomon Brothers was considered positively ethnic for being run by Italians and Jews. On the hilarious end was the hierarchy of respect: trainees, at the lowest level, were ignored; geeks, the lowest level of people doing work, were roundly abused; in the middle, you might get called by your real name and left alone for a bit; and if you were a success, one of the managers would convey upon you the title of Big Swinging Dick. He also gives a pretty spot-on description of Fuckspeak, which is the dialect used by guys in finance to show how in charge they are.
With the exception of John Gutfreund, Salomon's eminently weird CEO, many of the colorful characters in this book are known by outlandish pseudonyms, such as "the Human Piranha." There is also a character known only as "the opportunist," who tried to claim credit for a new warrant deal that the author and one of his colleagues designed. While the opportunist is not a particularly colorful character, his plotline is one of the most deliciously funny in the book, as he inspires our author to hatch an elaborate revenge plot. This plotline stuck out at me partly because it was hilarious but also partly because it really was one of the few parts of the book where Mr. Lewis was actually being an active sort of character; in much of the rest of the book he is basically observing and having weird shit happen to him, which I suppose is sort of the point.
The climax of the book, inasmuch as there is one, is the stock market crash of October 19, 1987. Shortly after this, it appears that Mr. Lewis decided to get out of finance and write snarky books about it instead, which I think was a good choice.
What I mostly got out of this book was: Man, I am glad I'm not a bond salesman; I would be balls awful at it. Apparently, it mostly involves cold-calling people and trying to talk them into buying things they don't want to buy, being stuffed in a noisy room with a hundred insufferable finance dudes on phones all day long, and being okay with people shouting at you and throwing phones at your head. I hate phones and do not have the constitution to handle any of those things. So I think I will stick to quietly reading about finance in my room and being poor.
This week, I read Liar's Poker: Rising Through the Wreckage on Wall Street, also by Michael Lewis. This one is partly a memoir of Mr. Lewis' short stint at the investment bank Salomon Brothers for a few years in the eighties, and partly an investigation of everything that was ridiculous about Salomon Brothers over the course of a few decades, but mostly the eighties.
Salomon Brothers, in the eighties, was apparently so ridiculous that Michael Lewis not only got a job there, but did really well, despite not really understanding much of what he was doing. According to himself, Michael Lewis got his undergraduate degree in art history from Princeton, got a master's degree in economics because that was the only degree investment banks accepted even when the jobs didn't have anything to do with knowing economic theory, landed a job at Salomon Brothers after talking to some guy's wife at a benefit dinner, and spent most of his time at the firm trying to copy other successful people and not usually having any idea what he was doing until after he'd been doing it for several months. He was a bond salesman, and apparently, for a bond salesman at Salomon Brothers in the eighties, actual knowledge of the markets was helpful, but optional. Sitting close to someone else who understood the markets and whose lines you could parrot was good enough, or else you could sell what the traders told you to sell and end up with angry customers but much acclaim within the firm (apparently, customer service was low on the firm's priority list). Beyond a reasonable level of general intelligence, what Salomon Brothers really seemed to require from its employees was the ability to take a lot of abuse. If you took enough abuse, you would be allowed to start dishing it out.
Lewis' portrait of the sociology and politics of Salomon Brothers is somewhere between hilarious and depressing. On the depressing end, it was all hugely dysfunctional: the interdepartmental backstabbing eventually led the firm to be unable to compete with other firms because it was too busy competing with itself. It was also discriminatory, with female trainees being disproportionately assigned to departments with little prestige and subject to harassment, and Wall Street in general being so WASPy that Salomon Brothers was considered positively ethnic for being run by Italians and Jews. On the hilarious end was the hierarchy of respect: trainees, at the lowest level, were ignored; geeks, the lowest level of people doing work, were roundly abused; in the middle, you might get called by your real name and left alone for a bit; and if you were a success, one of the managers would convey upon you the title of Big Swinging Dick. He also gives a pretty spot-on description of Fuckspeak, which is the dialect used by guys in finance to show how in charge they are.
With the exception of John Gutfreund, Salomon's eminently weird CEO, many of the colorful characters in this book are known by outlandish pseudonyms, such as "the Human Piranha." There is also a character known only as "the opportunist," who tried to claim credit for a new warrant deal that the author and one of his colleagues designed. While the opportunist is not a particularly colorful character, his plotline is one of the most deliciously funny in the book, as he inspires our author to hatch an elaborate revenge plot. This plotline stuck out at me partly because it was hilarious but also partly because it really was one of the few parts of the book where Mr. Lewis was actually being an active sort of character; in much of the rest of the book he is basically observing and having weird shit happen to him, which I suppose is sort of the point.
The climax of the book, inasmuch as there is one, is the stock market crash of October 19, 1987. Shortly after this, it appears that Mr. Lewis decided to get out of finance and write snarky books about it instead, which I think was a good choice.
What I mostly got out of this book was: Man, I am glad I'm not a bond salesman; I would be balls awful at it. Apparently, it mostly involves cold-calling people and trying to talk them into buying things they don't want to buy, being stuffed in a noisy room with a hundred insufferable finance dudes on phones all day long, and being okay with people shouting at you and throwing phones at your head. I hate phones and do not have the constitution to handle any of those things. So I think I will stick to quietly reading about finance in my room and being poor.
