Michael Lewis on Why the World Is Still Reading “Liar’s Poker”

it more. I feel like we do quite a few markets structure episodes, but you're right, we don't get so much into I guess the experience of actually working in those markets. No, we don't um And of course it's an interesting time. I mean it's always an interesting time. But so many of the banks are doing extraordinarily well.

And I feel like for both of us our careers post Great Financial Crisis, we like I think the standard thing is like each year it's like a bonuses are down at this bank or trading is down or left, and it feels like that, at least right now for the moment, it's a very lot of up arrows on Wall Street. But I do feel like there's a weird dichotomy at the moment in the sense that the banking and trading results have been excellent and it's definitely boom

times for Wall Street. But on the other hand, a lot of people are expressing unhappiness about the actual job at the moment. Right, you have a lot of younger bankers especially who just don't seem that into Wall Street at the moment. No, you know, they all want to go work on Crypto there. You know, they're the probably everyone else is traveling and working from saloom or something like that, and their bosses are telling them to come into the office and they're not having as much fun.

And so, yes, there was a great our. Colleague Max Sableson wrote a great piece recently, is or It's like everyone's making a lot of money on Wall Street, but no one's having at any fun. Yeah, exactly. So today we are going to get into the actual experience of working on Wall Street and how it's changed and why fewer people seem to be enjoying it and why everyone wants to go into Crypto I guess. Yeah. So we have an amazing the perfect guest for it. We're going

to be speaking with the author Michael Lewis. Of course, he is the author of numerous books. But of course one of his most famous liars Poker about Wall Street, came out in the most recent book is The Premonition. He's he also has his own podcast Against the Rules, and he's also, while we're talking about Liars Poker, done a new audio book and come out with a new sort of five episode mini series podcast sort of that goes along with it called Other Pupil's Money. So really

just a real treat to have him on. Let's get right to it, Michael, thank you so much for coming on a lot. Hey guys, thanks thanks for having me. So why why now to revisit Liars book? So two things happened at once. One was the audio rights of

the book reverted to me. They reverted to me at a time when I've been because of the podcast, I've been talking to my podcast company, Pushkin Industries, about how we would do audio books, informed by what we've learned about podcasts, like the audio books typically are just you just read them and nothing nothing else is going on.

And they really are starting to produce audio books, and we were looking for an excuse to do a fun, a more fun audio book, and this thing never got done, I mean never even you know, back when Liars Booker was published, there was really not a market. There was, like they sent out these cassettes, you know, and it

was it was an abridged, very abridged version. So the fact that it hadn't been done that so many more people are kind of listening than reading it just seemed like And the thing still sells, like, I don't know how many copies a year, it's still so they still

was a market for it. But the other thing that happened was my eldest child is a junior in college, and she has now three times said my friend just came back from an internship on Wall Street and they were made to read Liars Poker to understand the which makes no sense. But the fact that this thing is being now handed out as sort of like a work manual it interested me. And I just thought, plus the asterix to all this was I never read the book again.

I mean, I wrote it, and I published it. I guess I wrote read little bits and pieces when I was on book tour back then, but apart from that, I've never picked it up. And so it's just like I was curious what was in it, and and when I started reading it, I had all these reactions, and the reactions led to the little podcast series that's alongside

of it. They were just kind of things I wanted to do, like go talk to the people who were characters in the book to see what they, you know, when they look back on their lives, what they saw. So all that's why there's no there's like, no real reason. Nothing that just happened on Wall Street's triggering my interest in my own old book. So I gotta say so, I love audio books. I'm really looking forward to this, and I really only started listening to them in the

past year, so I'm basically doubled my reading, which is awesome. Secondly, I mean you mentioned the idea of Liars Poker being like the go to book for people who are interested in finance and economics, and it was certainly one of the first books that I read when I first went into financial journalism. I remember that many many years ago. But as you said or suggested, Wall Street has changed

quite a bit since the nineteen eighties. Why do you think Liars Poker seems to have this enduring legacy or why are people still so interested in it and still reading it as the first thing you know on their reading list when they start thinking about Wall Street. It's

a really good question, because it's bewildering to me. I thought, you know, when I wrote it, I thought it was going to be dated at any moment, uh, And that it was written as kind of like a message in the bottle to people a hundred years from who would never believe what happened on Wall Street in the nine It was like this discreet period of insanity that was coming to an end. So I think that there's two

answers to the question, and there's slightly contradictory. The first answer is when you read the book, as I just did and was reminded of all this stuff, I was struck by just how much of what Wall Street became was seated back then, like things that things that were just starting to happen back then, we're telling you where

this place was going. I had no idea, but you know, in retrospect, so the intellectualization of finance, that all of a sudden, like we had a PhD in physics on the trading floor and everybody thought, how bizarre is that. Then there were a few PhD s, and then the PhD s were actually in charge of most of them

were in trading decisions. I was just talking to someone who graduated not that long ago from m I t in the physics department, and he said, without thinking it was even interesting, he said, Oh, my whole department just goes to wall went to Wall Street. Everybody in my CLA physics departed in anamity everybody. And he said, I said, don't some of them like become physicists And he says, physics,

Physics isn't interesting anymore. It's it's uh so it's just understood that this is the path and that that I mean, so that starts back then, finance starts to get sufficiently complicated that it rewards that kind of intellect and drives out a different kind of person. So like that's one thing that you can see just starting to happen. The hold the place has on the imagination of young people.

Like it wasn't if you go back to like the sixties, fifties, sixties seventies, it wasn't the best and the brightest from the best schools who went to Wall Street. It was like the c student from Yale and guy's name Vinny from Staten Island, who I mean, it was the trade. You know, it paid well, but the status it didn't have that same status. And then it's persisted, even though the jobs have gotten i think probably even more horrible in some ways, it still has this grip on the

imagination young people. Like it's if you went to Harvard, the next thing you do that's a similar thing to getting into Harvard is getting into Goldman's acts that that's amazing to me. But that was amazing to me then,

So there's like there's some things like that. There are other things like that, just the financialization of the economy, which is related to the other two things that it's finances, you know, it's it's never stopped growing as a part of as a sharing the kind of all that's happened. So these mega trends kind of thing make it feel make the book feel like, uh, there's a little relevance here. It's not completely dated, but I think this is other

thing that's going on. And I was when I was reading, and I thought, this is why people reading Wall Street's gotten so dull. I mean, just personally, don't it is it's essentially, you know, a tech job. You go into one of these places and it's totally silent. It's people sitting at terminals, just in a little in a in a bubble. For better or worse. It's lost a lot of its color, and it's very hard to persuade a

young person that this is the fun job job. I mean, it's a job that pays you well and it gives you an answer to the question what are you doing after you got out of Harvard. It's just like even more soul deplating than it was. And I think the book, you know, I didn't intend for this to happen, but I was having so much fun writing it, and the experience was there were aspects of it they were just funny,

you know, just it was. It was alive, people screaming each other on a trading floor, people behaving in ways that were outrageous. It was human and wet, and I think that is part of the reason the book persists. It's like, you can't write anything interesting about it now. It's much harder. I mean, if you look at the books I've written since, they're about Wall Street, Big Short

and and Flashboys, both those books. I mean, part of it is a function of where I sit in relation to Wall Street, but both those books dependent on kind of outsiders crashing in on the system. It would have been very hard, I felt, and I reported pretty heavily inside the system to have brought the system itself to life, because it felt kind of in funny ways dead, even if it was making a lot of month, whereas long as poker was sitting, you know, that was the right

at the heart of the system. How much of this sort of more inert Wall Street is has to do with, you know, the rise of technology, the fact that it's not as much people necessarily streaming into phones and as much of a people business, and how much would you say, you know, how much is the last twelve or thirteen years and the sort of like, however many this sort of de risking of the banking system that occurred over after the Great financial crest, So that's part of it.

That's definitely a part of it. Right that if you are going to a big bank is no longer the place where you're taking the big interesting risks. So you're gonna if you're gonna take the big interesting risks, you're gonn to be at a hedge funder. You're gonna be at a venture capital funder. You're gonna be in private equity, and and the and the rewards also have moved outside

of the kind of the heart of the system. I mean, the highest paid people on Wall Street when I was there, I'm trying to think, what I'm sure that sure, this is not completely right. But they were barely hedge funds, you know they were there were people, there were people effectively doing what hedge funds did, but the compensation was nothing, and the size was nothing. Was like today, and you know, John good Friend making whatever three million dollars or five

million dollars or eight was considered just amazing. Uh. And then and Milk and you know, milk and made a billion dollars right inside of the bank. So I think the actions moved outside of the banks too. It's it's so that's happened. So the other things happened. I mean, is that I'm probably partly responsible over this in a

small way. Is this must liars poker? That earraw must have been the last time that someone like me could roll in to a big bank without signing non disclosure agreements, without having lawyers looking at everything you do, without being terrified, everybody being terrified of everything they put in their emails and all that, and where people didn't behave as if they were being watched, where even the boss is kind

of thought. I mean when I walked out, I told him I was writing a book about Wall Street, and they didn't. They couldn't have cared less. It was like they worried. They were worried about my sanity in leaving a really lucrative job for what they thought was penury. But they didn't, you know, go write a book about Wall Street? Who cares? Was kind of the attitude, the access to un self conscious behavior it's got, it has

definitely shrunk. I mean that's another reason I think I got the material was just sort of like that is the last time it really had a lot of flavor to it and you had total access to it and you could write it up. I mean, there have been other accounts from inside of Wall Street, but it's just not as interesting. Were there. Do you think there were any benefits to that type of culture, because nowadays we're used to looking back at the nighteen eighties as this

era of excess. You know, you described in the book basically like how much of a nightmare a lot of the traders were. And I remember the trainees like sitting in the back room and throwing things at the speakers and stuff like that. So everyone looks back at that sexism as well and thinks, wow, this was terrible. But was there any upside to having this sort of unfettered Um,

I guess culture. I'm gonna give you not my answer but the answer of one of the subjects of the Companion podcast and Clark Wolf, who has just started she started an investment bank, has been dubbed Solomon Sisters. She was a Solomon Brothers when I was the Solomon Brothers. She would she was there right when the book was coming out. Rather, she said to me something that sort of was on the tip of my brain, and I

was asking her. I was trying to get her basically say how horrible it was for women, right because from my point of view, it was appalling. I mean, you will, it's hard for you to believe, but here's a place of work and it is routine and acceptable to call a stripper in and have her take all her clothes off on the top of a trading desk while everybody cheers, or or to swat women on the rear end as they're walking by your desk or I mean, it was just one thing after another. I mean, it was just

outrageous sexual harassment, nothing subtle about it. And it bothered me, you know. And it's that that it bothered me. Was was behind between the lines of the books in places, and I thought I would get someone on to talk about this who actually endured it. And instead of saying what I wanted her to say, or thought I wanted her to say, she said, now, you got it wrong. Now this is just one woman's perspective. But she said, yeah, there was that kind of stuff, but women could advance.

There might be that kind of stuff going on at the same time. You got moved up if you were good, and it was very open. There was there was a kind of openness about it, like everybody wore their attitudes on their sleeve up, but they kind of some to move past those attitudes. And she said she found as Wall Street kind of became more sanitized, the difficulty women had moving up got worse. This is her talking to me.

But it was an interesting perspective, she said. And she said, you know, one of the things that's happened is that the male Wall Street person's fear of being in a compromised situation with a female Wall Street has completely eliminated the kind of mentorship that leads to uh, that leads to people moving up. And I thought, wow, I mean I've never heard that before. That was completely like no to me. I thought, well, maybe it's more complicated than

I thought at the time. I thought, one of the nice things about this place is that nobody's pretending to be anything but what they are. That there's no that that whatever vices there are here and their virtues and vices, there's very little hypocrisy. And and it was refreshing and it was filled. So this is related to this the diversity of the characters which made the book work much better. It wasn't all the same person there were there were a lot of It was a huge variety of personality,

character types. It was sort of like a pool, a random pool of talent. So that's kind of an appealing trait in a place at the tolerance of a range of a range of kinds of people. That's an argument for how it used to be. I'd say the one other argument, but this is kind of like what was ending when I was there is there was this wet relationship between the firm and its employees. It wasn't just

a corporate relationship. There was a residue of the partnership and the spirit of the partnership, the idea that you know, yeah, you worked in the mail room, but if you're if your wife got sick and you couldn't afford to pay the household bill, some partner just came in to pay them,

because that was just how you did it. That was that glue was was loosening while I was there, because it didn't cease to be a partnership and become a corporation, and it was becoming what it would become a kind of a much a much less kind of wet and cohesive place and much more corporate. But that old, that old feeling of like an emotional connection. I bet people miss that. I bet I bet people who work on

Wall Street now just miss that. There's no pretense that you have like love of the firm, and the firm doesn't love you. So there's there are things to be said about that era, probably more things that you said against it and said things to be said for it. You kind of anticipated or my next question, But this idea of like Wall Street Banks becoming more like corporate or maybe interchangeable, where an executive at a major bank could leave and go work at Google or Nike or

FedEx or something like that. Why does that? Why did that happen? I mean, like it feels like that. And you know, obviously in the intro we talked about, yeah, they're making a ton of money, but they it seems like they're having less fun. And they're certainly not having a lot of fun these days. Like why did why why do these banks? Why are they just sort of

corporations in a way that they didn't used to me? Well, because they weren't corporations, right, so they they I mean I think that's the that was the thing that was happening, you know. Again, like that gets back to why this book still gets read. Part of it is just like the moment in financial history captured. I walked into a firm that was the first big investment bank to turn itself to go public, and it was regarded as a great active betrayal when it did to the two old

partners to the idea of the firm. There's a lot of anger in the air even inside the firm when I was there, And this has happened, and it But what that does is it changes the relationship of the employee to the place the employee is. The people who run it are much less likely to be exposed to its failure in a big way. They're they're they're much

less likely to be It's not a sticky relationship. People more of their wealth comes in the form of of just their annual bonus and less in the ownership of the firm. So people just didn't stay as long. And

so what you had happened was free agency. That was the period where you started to get the free agent trader guys, you know, leaving from Marroll Lynch for three million bucks that and that was regarded it was interesting that would not know bat and I at that now, right if some if you're a goldman and Morgan Stanley offers you twice as much money, everyone going probably just says, well you should just take it, you know, or vice versa.

At the time, it was regarded as a betrayal. It was regarded you would say that people were treated as if they were traders if they left the firm for a more higher paid job somewhere else. What you were saying there was the residue of the partnership ethic and their firms on Wall Street they are still you know Brown Brothers. There there little firms that have kind of kept the old structure and it really works for what it does. It creates a lot of stability. It doesn't

work for big risk taking. Much better to be playing with other people's money. So this is a very um, I guess, guyste question. But you know, we're talking about culture, and you mentioned this idea of Wall Street firms having much um more cohesiveness during this era. You called it wetness. And I guess nowadays there's this big push on Wall Street to get everyone back into the office. Everyone went

to work from home during the pandemic. And I guess two things here, Why do you think it's such a big deal for a lot of the banks to have people in the office. And then secondly, is there attention between a work from home model and a business like trading. Do you have to actually be physically present talking to you know, your peers, your colleagues in order to make it work or is it something that can be done remotely nowadays? Well you probably know the answer this is

better than I do. But my, my sense. My sense is that there's much less reason to actually have to be there. It would have been bizarre not to be there. In you wouldn't you couldn't have functioned. Everything was happening there, and it was personal interaction that was driving a lot of the decisions, and and you were watching the markets in when you were watching the traders. That's not true anymore. I'm trying to think of what couldn't be done remotely

that's important, that would force people into the office. I mean, for a lot of this, you don't even need really people. You need algorithms. You know, the New York Stock Exchange used to be people. It's now servers in New Jersey. There are people on the New York Stock Exchange, but they're essentially a television set. They're not doing anything important. I think the way finances evolved, I can see why this pressure to not go back to the office, But you don't really need to be there. I think I

get the sense I could be wrong about this. I get the sense that like bosses are much more interested in having their their employees there, then the employees are interested in being there. And then so there's some like status stuff probably going on where it's you know, nice, you probably feel and you probably feel like you can monitor your employees better if they're physically present. But I'm not even sure that's true. So no, I can't see any reason. I don't I don't know why you need

a trading floor now, why can't be distributed? Even back then, there are people who did real well sitting in a room by themselves. They weren't, you know, not not people who work for the banks, but people traders, catch fund types. In fact, if you want to make the argument, you know what succeeds in the financial markets, you know, independent thinking,

taking a view that's slightly apart from the crowd. All that may be easier to do if you aren't in a room full with other people who are all doing the same thing. So to answer, so I would I would have thought that it's going to be hard to get everybody back, because you're not gonna You're not gonna be any better with everybody back. It's not gonna there's not gonna give you a huge competitive advantage. The exception is that what you're dealing with, you actually have face

to face interactions with clients. People are more persuaded by personal encounters, and so there's some there's still slices of the business like that. I mean, I bet it would be hard to be a I don't know, m and a advisor without being able to be with people. But those people are not your colleagues. Those people are like some CEO somewhere. So you think that's wrong. I could be wrong. Do you think what's the give me the argument for why you would go back to work. I

don't know, Tracy. I hate I hate doing this because I'm on the record as a big work from home fan. But it's culture and spontaneous cooperation, the kind of spontaneous cooperation and synergies you get from running into someone. How often has that happened to you? Actually, well, it does occasion, I have to say, Like it does occasionally you do run into people and say, oh, hey, what are you working on? You know, and maybe they ask you for

help or something like that. But I do think nowadays there are a lot of spontaneous interactions that can happen in just through you know, instant messaging and stuff like that. I just wanna I I totally agree, and I you know, I love most of the most of the interactions I have in the world are clearly digital. I really liked this sort of like three or four people that sit in proximity with me in the office, and I really genuinely enjoy coming in and just sort of chatting verbally

or so I would miss it. I liked the news or energy and just sort of joking around and talking news with the people who are sitting here me. So I'm a little bit more office of a sympathetic perhaps than the Tracy is speaking of zeitgey as you think so literally, it's every time some crazy story happens in the crypto world, I see people like I can't wait to read the Michael Lewis book about this event. And of course there's gonna be a Michael Lewis crypto book

at some point. There has to be right this chance. Um, you know, it's funny. I've been told by a lot of people I need to write such a book, and that's a persuasive But the it is true. What I think is true is if you asked, like, what's the version of Liars Poker? Now? Where is Liars put the Liars Poker like story happening? It's the it's crypto, it's it's it's that's where there is this shocking and unprecedented behavior and events, and people are trying to make sense

of something that's completely new. Our feels completely new where massive disruption is occurring. I mean that what Solomon by this training floor and Michael Milken's Drexel bond department, we're really like turning the financial world on his hand at that time. And that was part of the excitement of the story. So the same maybe true of crypto. The problem with crypto so far from me is I'm gonna

get slave for this, but taking it seriously. So I had this encounter and it's like it's a little powable to microcosm of a bunch of similar encounters I've had. I got a call. This was like six years ago, so kind of early in the whole thing. Bitcoin is like people are starting to look like they were smart to own some bitcoin, and there were like the great and the good of bitcoin. I was told we're gathering in a house in Silicon Valley and I should come

down and just meet him. And the guy who asked me actually said, if you come down, you meet Satoshi. And I thought, well, I don't care all that much, but I'm curious. So I drove down. I got in my car and drove all the way to palahout though, and I could smell the weed from like two blocks away, you know. It was just like the weed was coming out of the the chimney, and and there was it

was a funny scene. It was like twelve rooms and sleepy bags in all the rooms, and some of the people actually there were there were future billionaires in that house. But they were trying to persuade me that this was the money of the not the money of the future. And and it did feel like when they when I came to understand what this money was. But if this had been the money of the present and someone invented actual dollar bills, people would say, what, wow, this is

a fantastic revolution. And they took me so I said, I still believe. I just don't believe this in money. I don't believe this is gonna work. I think the kind of things you need to do to make this money are gonna undermine the things you love the most about it. And they said, no, no, come on with us. We're gonna show you that you can spend this already. And we walked into pala Alton when there was a coffee shop and sure enough it said we accept bitcoin.

And we sat there for I don't know, twenty minutes trying to pay for a cup of coffee with bitcoin until fine and no, and they couldn't do it. I finally pull out a five dollar bill and it worked just beautifully, And I just, you know, the first problem, like what this is apart from a speculative instrument? Put me off. Now, of course there's now everybody has a Now everybody has a smarter story. The smartest story is

it's the new goal. It's better gold. It's not it's not a currency, it's it's a better gold, you know. I mean, it's a better argument. It's you don't have to store it. Really, it's cheaper to store, easier to lose. But gold has this like millennium of faith behind it. And you're asking people to believe that people believe in bitcoin the way they believe in gold, and I just don't. Maybe that happens, maybe it doesn't. I think it's a funny end game where the in the end there is

no bitcoin because all of it's lost. There's so much of this stuff is already lost. Just amount of time before the last you know, you know, bitcoin key is gone. It's inconvenient in many ways, but the cultural stuff would interests me the most about it is just like the cultural disruption it causes. The fact you have n people who randomly have three or four billion dollars now because they bought some bitcoin, the fact that you've got people who have lost half a billion dollars of bitcoin and

can't find their key. What people are doing with the wealth that kind of like landed in their lap. So anyway, it interests me. It all interests me. For me to have something that is worthy of a okay, it requires what I had in Liars Poker and Flashboys and the Big short of the financial books. People I wanted to

be with. If I find a character who can walk me the reader through that world in an interesting way and and teach us all what it is and give us the pleasure, kind of pleasure of fiction and that you get from a character that would that would draw me to the subject. It's got me. You're right, it's got the ingredients, it's got like stuff. But I just didn't I didn't buy the original argument for why I should be interested, And and I haven't really found the character.

So I guess you didn't meet Satoshi in Palo Alto her No, it was that was that was a ruse. Maybe I did meet him, you know, It's possibly he was there and he took one look at me and said he's not worthy. Sort Of on a related note, but what do you think is the attraction for people who are in finance or have been in finance who

are making the transition to crypto. Is it purely a money making exercise eyes Is it just the next big speculative asset that they see kind of, you know, a bubble inflating in front of them and they can get in, make their money and get out. Or do you think there's a a genuine adherence to some of the belief systems and culture and systems around crypto. I think it's a mix. I think I've met both kinds. I haven't done that much work in this area, but I've met

both kinds. Um I've met people who were attracted to the the libertarian utopia and who were there for those sort of reasons. But those my senses, that was there at the beginning, and as bitcoin became more and more of an attractive speculative asset. It attracted a different kind

of person. And I think there's like any goal rush, why do people why do people come out and mind come out to San Francisco During the gold rush, they were well, there were some people who were here who were like adding add a better idea about where to find the gold, and they went and found gold and got rich. There are some people who were just there because everybody else was there and they thought they'd get

lucky and it didn't workout. But there's a whole class of people who made blue jeans and sold them to the minors and that, and I think that's that class of person is now the whole crypto has got so big, there is that that kind of person who's figured out how to be the blue jeans salesman and actually is kind of agnostic on the subject of crypto, doesn't believe in it or disbelieve in it, doesn't care one way or the other, just as long as people are trading it.

I don't think. I think we're kind of past the point where people think there's easy money just buying bitcoin. I don't think that exists anymore. I mean, it's just it feels it feels pretty scary. So, you know, we just have a couple of minutes, but there's actually I kind of want to sort of pivot a little bit. You mentioned San Francisco and you men, you've been talking about the Three Wall Street books. We also wrote a tech book in The New New Thing, talking about James Clark,

among other things. The Netscape co founder Dad obviously came out very close to the peak of the dot com bubble, and then it felt like, you know, that captured everyone's attention, and so I feel like Silicon Valley went dormant for a few years, and now obviously it's just everything. I'm curious, you know, how how your perception of tech right now feels compared to nine because obviously we've had this little sell off in tech stocks lately. People wonder how it's different,

how it's similar. Does it feel like there was a bubble that has to cool at some point? Like, how does it? How does tech look to you right now versus when you wrote that book, it's a much more thoroughly developed and articulated religion. Um, what was happening in the world didn't have it, This world didn't have its story completely straight. Look at that look what's happened since then.

Jim Clark, the hero of my book, The New New Thing, who I put at the center because he had been this constant disruptive force and was in the middle of the Internet bubble too with Netscape. Jim Clark, who lived for innovation, who knew as much about Silicon Valley in

the tech world as anybody. At the end of that book, he flees California and gets out of tech and venture capital because it's all gotten too insane, because Klanet Perkins has given twenty five million dollars to this startup called Google, which he is sure is just nonsense. Now he sees like that's for him, that was the sign that bubbles about the burst. I mean, we're now sitting here with the biggest corporations in the world having grown out of

that period. They create their own dynamic, barring a concerted government effort to like bust them up. You know, it's very hard to admagin how there's not just a bubble there obviously, right, there's a lot else going on. The religion has gotten I mean, it's just many more people have come to accept that we live in a world that's defined by constant innovation, and their wealth is innovation.

And the financial sector has real configured itself around this idea, so that there's huge amounts of capital thrown at people who will innovate. That it's a buyer's market if you were an innovator. And I don't really see that changing because at the bottom of it is something that is true.

It is that wealth and innovation are very closely linked, that we get richer as a society as we innovate, and that it pays us, it pays, it pays everybody to encourage this kind of behavior, to encourage total constant disruption. It feels a lot less. It felt kind of thin back then. There are a lot of companies that just, you know, they just didn't You really couldn't see how they're gonna work, and everybody said they're gonna work, and then they didn't work. It doesn't feel quite like that

to me. I mean, of course, it's it's frothy right now. But I do I think it would be smart to like pull out of venture capital right now. No, do I think it might be smart to get out of some stocks in the stock market, maybe for a while, But but it doesn't it feels like there's more of a solid foundation under it all to me. Um. You mentioned at the beginning of this conversation that you went back and you read Liars Poker as part of this project.

UM and I tried to do the same thing before this conversation, and there was one bit in it about Paul Volker sort of inadvertently giving birth to the big bond business of the nineties by allowing interest rates to float, and that introduced price volatility into the market. And that was kind of surprising to me because nowadays you think Paul Volker and you kind of think Volca rule and that he, you know, essentially castrated the big swinging dicks of the era and it was all because of him.

As you were rereading, was there anything that surprised you or that unexpected or ironic with the benefit of hindsight, Well, the first thing, it was a big chunk of the book. It's about the creation of the mortgage bond market. Even I at that moment have no sense that this is that Frankenstein's monster is being created, that this that that the way risk was going to be allocated would create problems. I saw nothing but good in that. I thought, and

it wasn't very At the moment, it seemed great. It was like, you're opening up, You're you're knocking down a wall between capital and homebuyers, and it was going to make buying a home cheaper for everybody, to give everybody cheaper access to capital. It was seemed like a great efficiency. But the complexity of the instruments was going to make something possible that I never would have imagined coming. So that was one thing. It was like, huh, didn't go

so well, right? I mean, we were well and we were in the beginning, but it didn't go in the end, it didn't go so well. So it was my own naive at the time basic approval of financial innovation. I was doing it. I thought it was cool. I thought it was making everything more efficient. It didn't occur to

me at the time. The complexity was the new opacity that no matter how supposedly transparent these businesses were, and you knocked down the wood panel walls and put up glass walls and everybody could see what everybody else was doing. It was complicated enough people would be able to do all kinds of nefarious stuff because no other people wouldn't understand and I didn't completely see that, and you when I'm reading the book, I can I can tell I didn't see that. I mean I was kind of on

the side of the innovator. So that's that's the most obvious thing that leaps to mind. The other thing reading the book that was just shocking to me was me, I mean, seven year old me was I mean, I guess I could have stood to have a drink with that person, but I wouldn't want to stay for dinner. My appetite for my own company of my with my own twenty seven year old me was much the more limited. And I thought it would be like, was I really this insufferable? It was? There was, There was that, But

that's I think that's kind of true. And we explore this in the little podcast, like when you go back to stuff you did when you were real it's jarring, Michael. I think that's a great place to leave it. This is a real treat. Very excited about checking out the new audiobook and the new podcast series. And thank you so much for coming on od luck, thanks for having me see you guys. That was really fun, Tracy. I feel that was a real treat getting to chat with

a legend in our industry totally. And I mean, like I said, I remember reading Liars Poker as one of the first things before I joined the Financial Times, or even I think before the interview something like that. So really great to actually meet Michael in person and speak to him. So first of all, he has to do

a crypto book, right of course. Yeah, But secondly, I know we were talking a lot about how much has changed on Wall Street, but I kept going back to um the idea that a couple of things haven't really changed, and one is the bond market. I guess it's not quite like it was in the eighties, but we've discussed this on the podcast. It's still not standardized. There's still no price transparency and so you can still make a lot of money from from trading debt. Yeah, no, that

that's true. Like that is one area that is still like on some level, pretty chaotic. I think it was like really cool, Like there aren't many people with his perspective. And I'm thinking also like obviously both Liars Poker, but also um his cover, you know, writing about Tech nine

with the new new thing. Who have seen these like huge industries like can sort of look at it with both ends, like how many people do we talk to like huge arcs of history, And so I thought, and you know, hearing him that last answer, and I thought that was a great question you asked, Like the fact, you know he wrote a book is like it's cool at the mortgage bond market and like the beginning and so being able to look back and obviously have no

idea that I guess essentially literally, I guess twenty years later that would be at the heart of this major international financial blow up. Yeah. But again, it's funny how you know, things kind of change, but they also stay the same. Because I mentioned that I was rereading it

or trying to before this this recording. But um, there's a bit in there about Henry Kaufman talking about like the financialization of the economy and how the US is borrowing so much money and debt's going to be an issue. And this was you know, in the late nineteen eighties and fast forward thirty years and we're still kind of

having the same conversation. It feels like, Yeah, and I thought that was interesting, Like your point, like Vulcar these days known for like the Vulcan rule and sort of like this, like but like he's era, like the era, and he was like, this is where it all came from, Like that was it? So that was that is interesting. Anyway, I really enjoyed that conversation totally. And uh yeah, I enjoyed getting an excuse to reread Liars Poker, especially because

I'm now in New York. It's a very good, like New York book, Welcome, Welcome back to New York, Tracy. This is very exciting. It is great, great to have you here that I'm excited about all the recordings we're going to do at the same time. So yeah, I feel like this was an auspicious start to the New York era. Although I should just say for any All Loots listeners, this is not going to be our permanent

audio setup. It's gonna get it's gonna get better. But yeah, talking to Michael Lewis about Wall Street in the nineteen eighties and Liars Poker is a great way to aig in the new All Thoughts era sounds good. I like it. We're back. We leave it there, Let's leave it there. All right. This has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway and I'm Joe Why Isn't Though you can follow me on Twitter at The Stalwart. Follow

our producer Laura Carlson. She's at Laura M. Carlson. Followed the Bloomberg Head of podcast Francesco Levi at Francesca Today, and check out all of our podcasts at Bloomberg under the handle at podcasts. Thanks for listening one