Wall Street's Doom Years in the Making

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.” (More Michael Lewis stories.)