An Inside Story of Wall Street Bank Crashes

After his stint on Wall Street, Michael Lewis wrote Liar’s Poker, a famous book that gave an inside story of the high-rolling Wall Street of the 80’s, with its exorbitant salaries and careless handling of investors’ money. In a recent article, Lewis wrote:

In the two decades since then, I had been waiting for the end of Wall Street. The outrageous bonuses, the slender returns to shareholders, the never-ending scandals, the bursting of the internet bubble, ...: Over and over again, the big Wall Street investment banks would be, in some narrow way, discredited. Yet they just kept on growing, along with the sums of money that they doled out to 26-year-olds to perform tasks of no obvious social utility. ...

In the article, Lewis tells another inside story—this time of the Wall Street of the 2000’s, and the collapse of its investment banks. He looked for persons who were right, who put their money on the coming crash—and he found Steve Eisman, a money manger at the hedge fund FrontPoint Partners. Eisman explained the origin of his negative outlook:

“You have to understand, I did subprime [mortgages] first. I lived with the worst first. These guys lied to infinity. What I learned from that experience was that Wall Street didn’t give a shit what it sold.”

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