Wall Street's Doom Years in the Making

Liar's Poker writer saw this coming long ago, and so did some contrarian money men
By Kevin Spak,  Newser Staff
Posted Nov 27, 2008 4:00 PM CST
Wall Street collapsed like a house of cards, just as Michael Lewis always imagined it would.   (Shutterstock)
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(Newser) – When he wrote Liar’s Poker in 1989, Michael Lewis figured the end of Wall Street was near. After all, it had hired him, a 24-year-old with neither experience nor interest in finance. “Sooner rather than later,” he writes in Portfolio, “someone was going to identify me, along with a lot of people more or less like me, as a fraud.” Now, decades later, Wall Street’s stupidity has finally brought it low.

Lewis wasn’t alone in predicting the apocalypse; a group of contrarian short-sellers who looked at the huge collateralized debt market and mountains of subprime malfeasance saw the plain truth: “Wall Street had built a doomsday machine.” It began building it way back in the '80s, when Salomon Brothers went public. No employee-owned firm would have exposed itself to such risk. Or, for that matter, “hired me or anyone remotely like me.”