Liar's Poker: From the author of the Big Short

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.

In short, junk bonds behave much more like equity, or shares, than old-fashioned corporate bonds.

He disapproved of work days longer than eight hours because, he said, “You then arrive at the office in the morning with the same thoughts you left with late the night before.”

What Milken was saying was that the entire American credit-rating system was flawed. It focused on the past when it should have focused on the future, and it was burdened by a phoney sense of prudence.

Our Europeans – especially our Englishmen – tended to be the refined products of the right schools. For them work was not an obsession, or even, it seemed, a concern. And the notion that a person should subordinate himself to a corporation, especially an American corporation, was, to them, laughable.

In any market, as in any poker game, there is a fool. The astute investor Warren Buffett is fond of saying that any player unaware of the fool in the market probably is the fool in the market.

“The casinos down here are dull compared to the shit we do.”

This, I made a note at the time, is what distinguishes work from school. Curious minds were not what Massey was after. Massey was looking for cult followers.

Knowing about markets is knowing about other people’s weaknesses.