More Quotes From "Liar's Poker"

The training program [at Saloman Brothers] was without a doubt the finest start to a career on Wall Street. Upon completion a trainee could take his experience and cash it in for twice the salary on any other Wall Street trading floor. He had
achieved, by the standards of Wall Street. technical mastery of his subject. It was an education in itself to see how quickly one became an "expert" on Wall Street. Many other banks had no training program. Drexel Burnham, and what I admit is an extreme example, even told one applicant to befriend someone at Salomon just to get hold of the Salomon training program handouts.

Why did investment banking pay
so many people with so little experience so much money? Answer: when attached to a telephone, they could produce even more money. How could they produce money without experience? Answer: producing in an investment bank was less a matter of skill and more a matter of intangibles – flair, persistence, and luck.

The head of bond research at Salomon, Henry Kaufman, was, when I arrived, our most acute case of cognitive dissonance. He was the guru of the bond market and also the conscience of our firm. He told investors whether their fast-moving bonds were going up or down. He was so often right at the markets made him famous if not throughout the English-speaking world at least among the sort of people who read the Wall Street Journal. Yet Kaufman was known as Dr. Gloom. The party had been thrown in his honor, but he seemed to want it to end. As he wrote in the Institutional Investor of July 1987:

"One of the most remarkable things that happened in the 1980’s was the sharp explosion in
debt, way beyond any historical benchmark. It was way beyond anything you would have expected relative to GNP, relative to monetary expansion that was taking place. That came about, I think, as a result of freeing the financial system, putting into being financial entrepreneurship and not putting into being adequate disciplines and safe-guards. So that's where we are."