Death of the real salesmen

The author of 'Liar's Poker', the best-seller about Salomon, mourns a bygone era

There are two ways to understand the purchase of Salomon by the nebulous Travelers Group, and one is as a funeral for the Great Personalities that used to thrive on Wall Street .

Since its rise to prominence in the late 1970s, Salomon Brothers has been the story of a band of renegades, less like conventional businessmen than any men who ever wore suits, dragged kicking into corporate America. People forget that there was a time in the early 1980s when Salomon Brothers was so much more profitable than the rest of Wall Street that it seemed to be in an entirely different business.

Its willingness to take risks in the bond market gave it something like a monopoly. But the firm was willing to take unusual risks because it was made up of unusual people.

The old Salomon Brothers was staffed by all those wonderful freaks: fat guys who refused to speak standard English, whippet-thin ulcer addicts as tense as steel rods. But every day men in grey suits from Harvard Business School seized a bit more control, leaving the odd balls with less room to manoeuvre. The 1991 Treasury-bond scandal accelerated a process well underway by the mid-1980s.

The firm that was sold to Travelers for twice its book value bore no relation to the firm I worked for and wrote about. Most of the characters have moved on: John Gutfreund and Lewie Ranieri and John Meriwether, but also a raft of lesser-known bond traders and salesmen who made the money: Larry Hilibrand, Tom Pura, Tom Bernard, Craig Coates, Mike Mortara.

The other way to understand the takeover is as a routine act of corporate madness: Investment bankers were never meant to be owned by larger corporations: they are too adept at taking advantage of their employers and putative shareholders. But the buyer of Salomon Brothers is to be pitied. Salomon's success has always hinged upon it remaining outside corporate culture. To be greatly profitable, the firm's traders must be allowed behaviour that no giant corporation would condone.

The one business in which Salomon retains its former money-making powers is proprietary trading. Trading the house account at Salomon Brothers is a bit like being striker at Manchester United: you are, by virtue of your position, destined for greatness.

Each year in the 1990s one of these traders (Larry Hilibrand, Rob Stavis, Victor Haghani, Hans Hufschmid, Shigeru Myojin) has made off with $20m- plus, and left Wall Street wondering about his peculiar gifts. His gifts were not peculiar. He was just permitted to bet the house on a hunch.

But there will come a time when Travelers chairman Sanford Weill will have to explain to his board that some geek dropped $400m in Chinese derivatives. And then what? This takeover is one of many transactions transforming global finance, so the buyer has the usual excuse that everyone else is doing it. But you can see where the creation of financial giants will end: with a financial market in which the biggest money is made, and the most interesting business is still done by people who are not in giant financial firms. With each day the most talented, ambitious (and lucky) traders are learning that the best thing they can do at Salomon Brothers (or Salomon Smith Barney) is to quit.

News
people
Sport
FootballGerman sparks three goals in four minutes at favourite No 10 role
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Sport
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
athletics
PROMOTED VIDEO
Sport
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave long-running series
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
music
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam