Heart of greed

GREED is good. That is today's dot.com mantra and it was yesterday's Wall Street mantra when people like junk bonds king Michael Milken bestrode the financial markets like a colossus. The similarities are eerie. In the mid-1980's, when Wall Street soared into the stratosphere, everyone wanted to be a bond trader or a bond salesman - from the village idiot to rich city boys with Porsches. Today, everyone wants to be a dot.com czar, driven by nothing more than the prospect of easy gain.

In 1987 when Wall Street crashed, thousands lost their jobs, some went to jail, and the dream of easy riches was over. Today, the only thing that most analysts of the dot.com industry seem to be able to agree on is that 95 per cent to 98 per cent of the cyber companies are headed for a fall.

It would probably be a good idea for those headed for dot.com land to read Michael Lewis' Liar's Poker (Coronet) before they take the plunge. It is a brilliant antidote to the mantra, 'Greed is Good', for it shows you how ambition and the need to grow rich quickly can make you lose perspective, human values and forget about the benefits of having your feet firmly planted on the ground.

This book first came out over 10 years ago, which is when I should have read it, but what with one thing and another, I never quite got around to it. When I finally managed to read it last week, I found it had lost none of its immediacy and impact as corporate memoirs are often wont to do.

Liar's Poker is the story of one of the world's richest merchant banks Salomon Brothers, from the inside, by a man who worked there as a bond salesman, before he finally decided to quit because the business was getting to him.

The story he tells is of excess and more excess, of testosterone driven bond traders and salesmen on the trading floors who cared about nothing or no one except the deals they were trying to close. Who craved above everything else to be known as Big Swinging Dicks, the epithet you were crowned with, if you were an exceptional deal maker.

Nobody cared if customers were screwed, if deals shortchanged the other side, all that mattered was putting several million dollars into the Salomon Brothers bank account and a couple of million into your own. In this headlong rush to make the deal, the weak perished, and the tough grew stronger, cruder and more vicious. The trading floor at Salomon Brothers was popularly known as the jungle and Lewis soon discovers why. No mercy. Every man out for himself. And you never know which day is going to be your last. Not that anyone cared, for nobody expected to be at any one organisation for too long, they expected to make their pile, and be pinched for a lot more bucks by a rival house like Michael Milken's Drexel Burnham where a former Salomon Brothers' employee received a bonus of several million dollars, more than the entire compensation package of his former chairman, John Gutfreund.

Those were heady days but inevitably they took their toll. According to the author, a bond trader aged like a dog: for every year in the average executive's life the bond trader aged seven. But for thousands of white men (orientals, women and blacks were the exception rather than the rule) to become a bond trader in the narrow streets at the tip of Manhattan was the epitome of achievement. Until the costs became too heavy to bear.

Michael Lewis tells his story well. As I said at the beginning of the piece, Liar's Poker is a must read for anyone who allows ambition to blind them to everything else. Not because making money is necessarily a bad thing. But when you make money "out of all proportion to your value to society' at some point you will get your come-uppance.

There will always be those who get richer while all around them crumbles. The problem is that you can never be sure that someone will be you. The lesson you take away from Liar's Poker is that it is okay not to be a millionaire.

DAVID DAVIDAR

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