Welcome back to Dry Powder, I'm William D. Cohan.

I’ve been friends with Michael Lewis, the journalistic juggernaut, for many years—from our time together in the heyday of Vanity Fair, dating as far back to his first marriage to Kate Bohner, my old Lazard colleague (who moonlighted in my recent, absurdist adventure with Carlos Watson). I admire Michael as a writer, as do so many others, for his ability to perceive things that other people don’t. While I was writing about the 2008 financial crisis from the perspective of a bank that failed (Bear Stearns, in House of Cards), and another that survived (Goldman Sachs, in Money and Power), Michael was writing about the financial crisis from the perspective of the handful of people who saw trouble brewing in the mortgage market in the years before the financial crisis and made a killing. I presume you’ve read The Big Short. 

It’s been nearly 33 years since the publication of his first book, the seminal Liar’s Poker, about his brief and eventful stint at Salomon Brothers in the late 1980s. He’s also completed a five-part podcast, Other People’s Money, where he chats up, among others, various characters who were at Salomon Brothers with him back in the day. In other words, it seemed to me like a great time to reconnect with Michael and get his take on what’s up on Wall Street and how it’s changed since he wrote Liar’s Poker in 1989, where he thinks the money action is now, and what his mood is these days as the pandemic seems to be fading, only to be replaced by the growing threat of World War III. 

Michael Lewis on Wall Street’s Past and Future

Sure, the days of strippers on the Salomon Brothers traders’ desks are long gone, but the iconic author has another revelation about what has changed most on Wall Street. “One of the incredible feats Wall Street has performed is preserving the businesses that aren’t really necessary anymore,” he says.

When Michael and I spoke, he was in his car, driving north up the California coast to Santa Barbara, from the “little place” he has in Laguna Beach. He had been in San Diego working on his podcast and was on his way to give a talk at Westmont College, in Santa Barbara. He had become interested in re-reading Liar’s Poker for the first time in 30 years, he said, and in re-issuing it as an audio book, after hearing from his daughter Quinn, who is a junior at Harvard, that her friends were being told during their interviews for Wall Street jobs that they should read her father’s book, even though it was written in what was obviously a very different era. “I thought how strange that was,” he said, “because on the surface, it doesn't seem all that relevant. I can't believe that reading about strippers on the desks at Salomon Brothers in the 1980s, and traders all throwing pizza at each other, had any resonance for someone who's walking into a hedge fund or into a big bank today.” 

In re-reading the book, Lewis said, he was able to observe himself learning to become a writer. Somewhat surprisingly, he told me, he didn’t particularly like his writing in Liar’s Poker. “It took me a while to figure out how to do it,” he said, “I was bailed out by the quality of the material, my illicitly-got material. The fact that I had just, by accident, landed in about the best place to write a book about Wall Street, and had all this stuff just handed to me on a platter, bailed me out. But the level of skill was really low.”

He was also struck by how different Wall Street is today than it was then...

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