From Liar’s Poker to the Financial Crisis: Innovation, Incentives, and Modern Risk
Liar’s Poker makes the recent past feel strangely distant. Michael Lewis’s Wall Street is recognisably modern in its ambition and financial ingenuity, yet physically alien in its crowded bond desks, overlapping telephone calls, shouted prices and market knowledge carried inside personal relationships. It is close enough to recognise and far enough away to seem almost theatrical. The technology has changed so thoroughly that the people can appear to belong to another profession, even when the incentives governing them remain familiar. At the centre of the book’s mortgage story is Lewis Ranieri, who rises from the Salomon Brothers mailroom to lead its mortgage operation. His career invites the cleanest possible American narrative: an outsider with energy, instinct and personality discovers a neglected market and transforms it. That account contains truth, but not enough of it. Ranieri entered a market being reshaped by inflation, volatile interest rates, regulatory change and the ...