Street

By Stefan Kanfer

LIAR'S POKER

by Michael Lewis

Norton; 249 pages; $18.95

In 1984 a recent Princeton University graduate chatted up a well-connected dinner partner and found himself a job at Salomon Brothers, a prominent New York City investment house. Upon entry, Michael Lewis was presented with a choice of two career tracks. A commercial banker took deposits and made loans. He was not, Lewis learned, "any more trouble than Dagwood Bumstead. He had a wife, a station wagon, 2.2 children and a dog that brought him his slippers." An investment banker, on the other hand, was a "member of a master race of deal makers" who "possessed vast, almost unimaginable talent and ambition. If he had a dog, it snarled. He had two little red sports cars yet wanted four." The trainee opted for avarice.

In The Bonfire of the Vanities, Tom Wolfe caricatured the voracious men who work 16-hour days, earn outrageous salaries that never keep pace with their desires, and consider themselves "Masters of the Universe." But Wolfe was a tourist; Lewis issues his catcalls from deep inside the jungle. At the top of the food chain is Salomon's CEO, who presides with a smooth amalgam of drive and hypocrisy, speaking loftily of social issues and encouraging his staff to bilk the clients. Below him are ranks of predators, among them a man so dedicated to consumption that he is labeled "the Human Piranha"; a Briton so chilly to his colleagues that he is called "Sir Sangfroid"; an irritable trader who throws a phone at his clerk every time he passes; and a bond trader who thrives on global catastrophe. Minutes after the Chernobyl disaster, this fellow advises, "Buy potatoes." Lewis suddenly understands: "Of course. A cloud of fallout would threaten European food and water supplies . . . placing a premium on uncontaminated American substitutes."

The most vulnerable species of all is the customer, victimized by salesmen whose bonuses depend on how many questionable securities they can unload. Retribution is the rarest commodity on Wall Street, but in Liar's Poker it makes several appearances. In 1986 the financial action begins to leave Salomon Brothers for other concerns -- and so do many of the best employees. The house that has thrived on hostile takeovers itself becomes a target. Then comes the Crash of '87, when "investors froze like deer in headlights" and hardened professionals were "helpless as they watched their beloved market die."

Worst of all for Salomon Brothers, Michael Lewis, who was earning $225,000 a year at the age of 27, overdosed on greed and quit the firm to empty his journals into this brief, knowing and hilarious volume. Alas, its disclosures are not likely to be heeded. The Street provokes a book of revelations nearly every year, but the con men, the customers and the crashes go on. Aside from Lewis, hardly anyone seems to notice that Wall Street has always been a thoroughfare with a river at one end and a cemetery at the other.