Liars Poker Analysis

1231 Words Nov 15th, 2014 5 Pages
John Snow
October 31st, 2013
Business in Society
Liar’s Poker Analysis

The book Liar’s Poker begins with Michael Lewis, the author saying "Wall Street,” reads the sinister old gag, "is a street with a river at one end and a graveyard at the other.” This quote, symbolizing competitiveness, refers to the river as growth and prosperity and the graveyard as death in a company proves to be the fundamental principle that led Michael Lewis to write this book. The book portrays Michael Lewis’ time with Salomon Brothers (SB), the largest bond dealer in the 1980s. It outlines the business model that SB used to maximize capital in the mortgage bond market. By the mid- 1980’s SB had become the most influential bond dealer in the market.
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They were able to take advantage of the situation and control the market by offering whatever price they thought was fitting. Even though this seemed like a genius play it was by stroke of luck that this was all able to happen. If interest rates remained fixed SB would have never been as successful as history tells us and the mortgage bond division would have probably been terminated in the near future. Even though floating interest rates was a stroke of luck, SB was able to take full advantage of the situation while it lasted. Since SB was already inept to mortgage bonds they were able to compete at the top of the market far before anyone could even enter. It is said that SB had monopolized the mortgage bond market and were able to set the price buying and selling bonds rapidly. The change to floating rates may have been lucky but the determination, skill and grit of SB to dominate the mortgage bond market was what led them to become wealthy in the early 1980s. Michael Lewis’ success within the business is a microcosm for the business as a whole. Michael Lewis started as an unsuccessful Art Major out of Princeton. He got his big break when he attended a dinner for the Queen Mother at St. James Palace. At this point in his career, Lewis became interested in Wall Street due to the fact that that is where the money was at. While he was at this dinner he

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