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.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
peopleMathematician John Nash inspired the film Beautiful Mind
News
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Life and Style
Audrey Hepburn with Hubert De Givenchy, whose well-cut black tuxedo is a 'timeless look'
fashionIt may be a paradox, but the industry loves it
Arts and Entertainment
The pair in their heyday in 1967
music
Life and Style
fashionFrom bathing dresses in the twenties to modern bikinis
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

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine