The New York Observer, May 21, 2001

By James Verini

He whispered a few words. The traders in the vicinity eavesdropped. What Gutfreund said has become a legend … He said: “One hand, one million dollars, no tears.” Meriwether grabbed the meaning instantly. The King of Wall Street, as Business Week had dubbed Gutfreund, wanted to play a single hand of a game called Liar’s Poker for a million dollars.

— Michael Lewis, Liar’s Poker

The Wall Street of the 1980’s still holds mythic status in the American collective memory. Most of us knew of it only through what we’d heard and read, but that only served to make its symbolism more powerful; we latched onto the images and buzzwords of Wall Street — trading floors, hostile takeovers, Milken — and allowed them to embody the greed of the decade.

A few fictional accounts helped us along — Bonfire of the Vanities comes to mind, of course, and that Oliver Stone picture. But for many, the quintessential textbook is Michael Lewis’ Liar’s Poker. A runaway best-seller, Mr. Lewis’ 1989 memoir captured, exhilarated — and disgusted — a generation. And it was all the more remarkable because it was true. Mr. Lewis had worked on the bond-trading desk at Salomon Brothers, and he’d played the game of risk for which the book is named.

Twelve years later, things are very different on Wall Street. The greed is still there; much of the wildness, however, is gone. Things have gone solemn, corporate.

But in a small office uptown, a few bored young refugees from the Street, pining after the financial culture described in Mr. Lewis’ book, are trying to inject their old haunts with some 80’s nostalgia. They want to reintroduce Liar’s Poker to Wall Street, to get back to the days of bidding and bluffing, the days when confidence and knowledge — not computers — made the money. That they’re doing this via the Internet may or may not be ironic.

“Wall Street has changed substantially [since the publication of the book],” said Nick Coleman, whose one-bedroom apartment in Murray Hill also serves as the office for his company He says it in such a way as to make clear that he does not like those changes. Although Mr. Coleman says that “they’ll still cut your head off for a dollar,” he unabashedly laments the disappearance of what he calls Wall Street’s “old-boy network.”

Mr. Coleman, 25, is in a position to know. His father worked his way up from gofer to senior managing director at Bear Stearns, which is where Mr. Coleman went to work after graduating from Providence College in 1997. He began as a summer intern, then became a salesman in the municipal-bond department, where his father had spent most of his career (Mr. Coleman claims that, if any old-boy network is left on Wall Street, it’s in municipal bonds), and finally ended up in private client services. But he didn’t like it. The Wall Street that Mr. Coleman entered was not his father’s Wall Street, nor was it that of Mr. Lewis. It was an anonymous, equities-dominated affair, and it didn’t hold his interest.

“Back then [when Liar’s Poker was written], the bond markets made it much more exciting,” said Mr. Coleman, who grew up on the Upper East Side and exudes an easy, patrician air. “It was dominated by personalities … It was an old-boy network.” It was a place where the grimmest assignment, as Mr. Lewis pointed out, was “Equities in Dallas,” and where enthusiastic traders came to work each day “ready to bite the ass off a bear.”

Justin Farley, Mr. Coleman’s partner, enthusiastically agreed: “The margins were much larger. Meriwether and those guys would buy a bond from somebody in California for $80 and turn around and sell it to someone in New Jersey for $83 … Now it’s just about institutional traders.”

So last September, Mr. Coleman left Bear Stearns with the hope — by then already a bit outdated — of starting an Internet company. What he had in mind was a “gaming Web site,” and although the Nasdaq had by that point been on the decline for several months, he was able to gather enough seed money from family, friends and a few private investors to launch NoPay2Play (he says that he is about to close a second round of funding).

Mr. Coleman, a professed lover of card and numbers games of all sorts, began the Web site in a nostalgic frame of mind: just as he was disillusioned by the new Wall Street, so was he fed up with the complex, graphics-heavy video games preferred by the Internet generation of yuppies. So members of NoPay2Play are offered, most prominently, old standbys, albeit in electronic form: roulette, blackjack, craps, poker. There is also plenty of sports-related stuff to fill out the site’s suggestive gambling ethos — “NoPay2Play are not affiliated with, nor do we advocate, gambling,” Mr. Coleman said, in his best attempt at solemnity.

Several months ago, Mr. Coleman had the idea of making a more explicit play to his former colleagues on the Street. He and Mr. Farley, who worked as an analyst at Prudential Securities and a consultant at Deloitte & Touche before joining his college friend, took another look at one of their favorite books and decided that it was time to get people playing Liar’s Poker again. They hired a couple of programmers from IBM and developed a 21st-century version of the dollar-bill-based game. It is downloaded, but takes place via Instant Messenger — which gives it an advantage over other online Liar’s Poker offerings, because it manages to steer clear of the ban on gaming sites enforced at most large Wall Street firms.

The object of Liar’s Poker is to call your opponents’ bluff before they call yours. Each player has a dollar bill with eight serial numbers. The players take turns “bidding” based on their assessment of what the other players hold. For example, a bidder will call “three fives,” meaning he — it’s usually “he” — believes there are at least three fives among the combined serial numbers on all of the players’ dollar bills.

The bid builds with each round. As the numbers mount and the bidding becomes more aggressive, the calls become less likely, and players up the ante until everyone decides to call one player’s bluff. The winner gets everyone’s money and, back in the old days, respect.

In the Wall Street of the 1980’s, a good Liar’s Poker player was a good bond trader, and a good bond trader or salesman was what everyone wanted to be: a Big Swinging Dick.

“The game is sort of emblematic of what goes on in the industry, because it’s like chicken,” said one bond salesman for a major investment bank. “A lot of the time the question is ‘Do I show my hand or not?’, and a lot of times that’s the issue on the job. There’s a semi-macho element to it.”

There’s also its symbolism as a rite of passage. “It’s like smoking cigars,” said one equities trader with a major investment bank, who is in his early 30’s. “You smoke cigars three years out of college.”

Playing Liar’s Poker also helps put things into perspective, said the bond salesman. “It’s a self-mocking way of downplaying the significance of the real money that’s being traded.”

To Mr. Coleman and Mr. Farley, offering a cyber version of Liar’s Poker is a way of rekindling a fading culture — a mindset caught so effectively in Mr. Lewis’ book and now largely absent. The “genius” of Liar’s Poker, Mr. Farley said, is that it shows how “back then, if you were smarter, you had the upper hand. You didn’t know who was holding what bonds or what positions … It was like the Wild West in the bond market.”

Mr. Farley compared this with today’s market, in which all purchases and positions are closely tracked; all is transparent, and much of the art of the trade — of valuing immense numbers of bonds in a matter of seconds, of sizing up rival traders and making margins — is gone.

Mr. Coleman said that he started playing Liar’s Poker as a child with his father and brothers. “[My father] would never let us win,” he said of those days when he was a student at St. David’s. Mr. Coleman has been playing ever since. He insisted, again with an earnest attempt at solemnity, that he never played — nor did he know anyone who played — at Bear Stearns (later he slipped and reminisced about playing against co-workers for lunch). Mr. Coleman, whom one can imagine enjoying Las Vegas, said that the most he’s ever played for was “a few hundred dollars.”

But what about the rest of Wall Street? Some share Messrs. Lewis, Farley and Coleman’s fascination with the game. Others said it is no longer part of the Wall Street ethos.

“I used to carry at least six $1 bills that had six or more of [a] kind in my wallet … only as a joke,” said Paul Cherney, who writes a daily market column for S.&P. Market Watch. “It was a passing thing.”

“A lot has changed,” said Kevin Logan, chief market economist at Dresdner Kleinwort Benson. “Attitudes have changed … things are different. All the big money is being made in stocks now.”

Where once it was a ubiquitous presence, a distraction for bond traders in the heat of big trades, Liar’s Poker is now more likely to reappear during a late-running Happy Hour. “You might see guys in bars [playing] it,” Mr. Logan said.

So why this moment — this solemn, corporate, button-down moment in the culture of Wall Street — to launch a new Internet venture devoted to a vestige of the carefree (some would say careless) 80’s? The NoPay2Play partners sounded breezily optimistic. “News of a new start-up” surviving in the current business environment, Mr. Coleman explained in press-release-speak, “adds tremendous value.”

But Alex, a programmer and designer who was present in the office, was more practical: “It’s bargain-basement time. You can get great discounted rates on services … There are a lot of people out there dying for a paycheck.”