The scene where the bank's CEO John Gutfreund challenges John Meriwether to a hand of Liar's Poker for $1 million.
The limits of reckless gambling on the Street were defined in the book's opening scene.
John Gutfreund proposed playing one hand of Liar's Poker, which requires gamesmanship and knowledge of probabilities highly valued by the traders, for $1 million. His opponent, John Meriwether (widely considered the firm's best player) didn't want to beat the CEO, so he got the boss the back off by saying he'd only play for $10 million.
Source: Liar's Poker
The scene where Lewis describes how miserable his friends are as analysts.
Lewis describes a friend working as an analyst who "was so strung out that he regularly nipped into a bathroom stall during midday lulls and slept on the toilet. He worked straight through most nights and on weekends, yet felt guilty for not doing more. He pretended to be constipated—in case someone noticed how long he had been gone... Many analysts later admit that their two years between college and business school were the worst of their lives."
Source: Liar's Poker
The scene where Lewis miserably flunked his first interview at an investment bank.
When a young Lewis revealed money was the only reason he wanted to become an investment banker – in an interview – here's the response he received:
"That's not a good reason. You work long hours in this job, and you have to be motivated by more than just money. It's true, our compensation is in line with our contribution. But frankly, we try to discourage people from our business who are too interested in money. That's all."
Source: Liar's Poker
Where Lewis describes how Volcker and America's borrowers juiced the bond market.
"After Volcker's speech, bonds became objects of speculation, a means of creating wealth rather than merely storing it. Overnight the bond market was transformed from a backwater into a casino. Turnover boomer at Salomon. Many more people were hired to handle the new business, on starting salaries of forty-eight grand. Once Volcker had set interest rates free, the other hand stuffing the turkey went to work: America's borrowers. American governments, consumers, and corporations borrowed money at a faster clip during the 1980s than ever before"
Source: Liar's Poker
The scene where Japanese bankers fall asleep during the Salomon training program.
"Of all exceptions, however, the Japanese were the greatest. The Japanese undermined any analysis of our classroom culture. All six of them sat in the front row and slept. Their heads rocked back and forth and on occasion fell over to one side, so that their cheeks ran parallel to the floor...Each morning and afternoon the back-row boys made bets on how many minutes it would take Yoshi to fall asleep."
Source: Liar's Poker
The scene with the one trainee too terrified to step on the Salomon trading floor.
"...a third, by far the most interesting, couldn't bear to step off the elevator and onto the trading floor. He rode up and down in the rear of the elevator every afternoon. He meant to get off, I think, but was petrified. Word of his handicap spread. It reached the woman in charge of the training program. She went to see for herself. She stood outside the elevator banks on the forty-first floor and watched with her own eyes the doors open and shut for an hour on one very spooked trainee. One day he was gone."
Source: Liar's Poker
The scene where a banker called Piranha says the French are "getting their faces ripped off."
Lewis wrote on the comments this brusque, profane Salomon legend had regarding a convertible bond issued by the French government:
"The problem was that the bond was, under certain conditions, exchangeable into gold at thirty-two dollars an ounce—i.e., the holder of, say, thirty-two million dollars of the bonds, rather than accept cash, could demand one million ounces of gold. "The f*ckin' frogs are getting their faces ripped off," said the Piranha, meaning that the French were losing a lot of money on the bond issue now that the bond had indeed become convertible and the price of gold was five hundred dollars an ounce."
Source: Liar's Poker
The scene with the suitcase goof
"The suitcase goof had started in 1982, with one trader getting hold of another trader's weekend bag and replacing the clothes with pink lace panties. There were at least four goofs and regoofs of this sort between 1982 and 1985. The goof finally stopped spawning more goofs when John D'Antona arrived late one Friday morning with suitcase in hand. He'd planned a weekend trip to Puerto Rico...[Two traders] removed the clothes and inserted about ten pounds of wet paper towels instead. D'Antona didn't discover the switcheroo until he emerged from a hotel shower in Puerto Rico that evening."
Source: Liar's Poker
The scene where management (unsuccessfully) begged a top trader to stay.
The trader did not mince words during his exit:
" The managing directors of the London office fell to their knees (figuratively speaking) and pleaded with him to stay. He was the backbone of a new and fragile enterprise, they said. Screw backbones, he said, he had been offered much more money by Goldman Sachs...They expected, they said, for him to forget about trading for a moment and consider the importance of loyalty to the firm. And you know what he said to that? He said, 'You want loyalty, hire a cocker spaniel.' "
The scene where the trainee gets pranked.
After being sent to fetch lunch for several traders, Matty bragged about having snuck out of the cafeteria without paying:
"Stealing food wasn't Matty's big mistake. His big mistake was to brag to one of the fat traders how he had done it. That afternoon Matty received a phone call from a man who claimed to work for the "special projects division of the Securities and Exchange Commission." The SEC, this man explained, had been granted jurisdiction over Wall Street's cafeterias, and he was investigating a reported theft of three trays of food from the Salomon Brothers cafeteria. Would Matty know anything about that?"
Here's what happened when Matty went back to his desk after meeting with managing director Michael Mortara, who orchestrated the entire charade:
"Matty looked around him, however, and saw not only that everyone was laughing but that everyone was laughing at him. He had been made the victim of what was known in the department as a goof. It had been Mortara's idea, but Mortara persuaded Gutfreund to lend a touch of credibility to the ruse."
Source: Liar's Poker
The story of when Lew Ranieri received unexpected financial assistance from a Salomon partner.
"His wife lay ill in the hospital, and the bills simply accumulated. Ranieri needed ten thousand dollars. He was nineteen years old, and all he had to his name was his weekly paycheck. He was finally forced to request a loan from the one Salomon Brothers partner he knew vaguely... the partner told Ranieri that the hospital bill would be taken care of. Ranieri thought that meant it would be deducted from his weekly paycheck, which he couldn't afford, and he began to protest. "It will be taken care of," the partner repeated. Salomon Brothers paid the ten-thousand-dollar bill racked up by the wife of its mailroom clerk with three months' tenure."
Source: Liar's Poker
The scene where Lewis describes how tastesless trading floor jokes can be.
"If you ever care to see how all the world's most awful jokes spread, spend a day on a bond trading desk. When the Challenger space shuttle disintegrated, six people called me from six points on the globe to explain that NASA stands for 'Need Another Seven Astronauts.' "
Source: Liar's Poker
The scene where Howie Rubin jumps ship to Merrill Lynch.
Howie Rubin later lost $250 million under circumstances that remain a mystery to this day:
"Wall Street reporters were frantically trying to find out both who this man, Howie Rubin, was and what was meant by lOPOs. And though they eventually learned, how Howie Rubin lost more money on a single trade than anyone on the history of Wall Street remained one of the most beguiling mysteries on Wall Street."
A Merrill exec told the WSJ that Rubin had put the bonds in a drawer, and the firm was unaware of their existence.
Source: Liar's Poker
The investing advice Lewis received from his mentor moments after Chernobyl.
"Remember Chernobyl? When news broke that the Soviet nuclear reactor had exploded, Alexander called...Instantly in his mind less supply of nuclear power equaled more demand for oil, and he was right. His investors made a large killing. Mine made a small killing. Minutes after I had persuaded a few clients to buy some oil, Alexander called back. "Buy potatoes," he said. "Gotta hop. "Then he hung up.?Of course. A cloud of fallout would threaten European food and water supplies, including the potato crop, placing a premium on uncontaminated American substitutes."
Source: Liar's Poker
Where Lewis describes how Warren Buffett saved Salomon, and as usual, did well for himself.
Buffett lent the firm $700 million to buy its own stock and received a convertible bond with "an interest rate of 9 percent which was in itself a good return on his investment. But in addition, he could trade it in at any time before 1996 for Salomon common stock at thirty-eight dollars a share. In other words, Buffett got a free play, over the next nine years, in the shares of Salomon."
Source: Liar's Poker
The scene where Lewis discredits a colleague that copied his work.
Lewis writes, "My degree in art history finally served my career. I knew all about frauds. Ask yourself: What would a painter do if a rival stole his work and put his name con it? He'd paint a replica and issue a challenge for the rival to do the same. And that's what I did."
Lewis then created a nearly-identical investment vehicle to the one appropriated by the opportunist, which cast doubt upon the thief.
Source: Liar's Poker
The scene where traders pranked their bosses
When times were stressed around the office, traders wanted some time without Mortara and Ranieri breathing down their necks, and played pranks to try to keep them away:
"The second day the traders removed the support pins from the swivel chair at Ranieri's desk. When he sat down first thing in the morning, he crashed to the floor and nearly cracked his spine. It took minutes to hoist him to his feet while he cursed and shouted."
Source: Liar's Poker
The scene where one man celebrates after being fired.
"He hopped about like a small child on Christmas Eve. What he wanted from Santa was the sack. He had already accepted a better job at another firm. He had intended to quit Salomon at the beginning of the week, but seeing he might be fired instead, he waited and held his tongue, hoping to receive a golden handshake. The severance payments were indeed generous and based on tenure. My friend had been with Salomon for seven years and, if fired, stood to receive several hundred thousand dollars."
Source: Liar's Poker
