Liar’s Poker

The securities business sometimes inspires questionable behavior, but an overregulated marketplace can stifle innovation and slow economic growth. Should traders and salespeople be held to high standards, or should they be allowed to compete freely in an evolving industry? Give arguments for either side.

Salomon bond salesmen and traders yell at one another, overeat, play vicious pranks, and parade about when they make a good trade. Salomon managers believe this culture inspires the workers to greater productivity. Are they right, or does the bad behavior directly cause financial problems later on? Choose one of the unusual trading-floor behaviors mentioned in the book and show how it might lead to good or bad financial results later on.

Assume that Salomon’s aggressive culture does indeed improve revenues and profits. Does this justify the crude behavior? Explain why or why not.