Linda’s Reviews > Liar's Poker > Status Update

Making decisions cutting against convention - are they all good because they’re unexpected? “It was refreshing to hear a case for unpredictability in this age of careful career planning. It would be nice if it were true.”

“But how can you speak of loyalty to the firm when the firm is an amalgam of small and large deceptions and riven with strife and discontent? You can’t. And why even try? But now it was abundantly clear that the money game rewarded disloyalty. The people who hopped from firm to firm and, in the process, secured large pay guarantees did much better financially than people who stayed in one place.”

“Who’d have imagined that our largest single equity underwriting would coincide with the largest drop in history in the stock market? …It was striking how little control we had of events, particularly in view of how assiduously we cultivated the appearance of being in charge by smoking big cigars and saying f—- all the time.”

“our chiefs never seemed to suffer for their mistakes. They applied a kind of marginal analysis to each new screwup and said that what had been done was behind us and that no good would come from further shock to the firm…My feeling was that our woes were caused, at least in part, by the feeling among the men at the top of the firm that they had no personal exposure if their empire collapsed.”

Junk bonds financed raids w/ assets of undervalued corporations as collateral. “A take-over of a large corporation could generate billions of dollars’ worth of junk bonds, for not only would new junk be issued, but the increased leverage transformed the outstanding bonds of a former blue-chip corporation to junk. To raid corporations, however, Milken needed a few hit men.”

This “strange inversion” also happens in churches when official leaders are clueless: “The grunts were better able to diagnose the problems of our business than the generals. Ordinary salesmen were on the telephone all day every day with the source of our revenues: European institutional investors.”

“The plain fact was that a combination of market forces and gross mismanagement had thrown Salomon Brothers into deep trouble. At times it was as if we had no management at all. No one put a stop to the infighting; no one gave us a sense of direction; no one put a halt to our rapid growth; no one wanted to make the hard decisions that businessmen, like generals, simply have to make.”

“But I was willing to take greater risks than if I had felt deeply proprietary about my career. I was, for instance, willing to disobey my superiors, and that caused them to sit up and take notice far more quickly than if I had been a good soldier.”

“Many of our French and English speculators, however, honestly believed the charts contained the secrets of the market. They are aboriginal chartists. They would have used the charts even if no one else did. They communed with their charts as if they were Ouija boards. The charts were speaking to them.”

“The attraction of options and futures, our specialty item, was that they offered both liquidity and fantastic leverage. They were a mechanism for gambling in the bond markets, like superchips in a casino that represent a thousand dollars but cost only three…options and futures have no equivalent in the world of professional gambling because real casinos would consider the leverage they afford imprudent.”