"Liar's Poker"

I am working my way through Michael Lewis' books. This one, "Liar's Poker" from 1989, has been eye opening. I had no idea that bond traders became popular because Paul Volker changed the rules on bonds and allowed the interest rates to float, thus making the bets on bonds much more lucrative. I also did not realize that the traders themselves were all adrenaline driven and in their mid 20's. The scoring within the investment house was not about profits, good of the country, or long term strategy. It was about how many dollars worth of bonds were sold today.
This very short term focus accomplished a few things.

There was no real business structure at Salomon Brothers, the subject of the book.
There was no real planning or strategy except using your wits to react to situations in real time.
There was little thought about the consequences of trading decisions a year after the trade.
Market efficiencies were often ruthless. A high profit trade easily became a low profit trade in hours as traders copied each other.
Rewards within Salomon were fairly meritocratic. You sold a lot of bonds and you were rewarded. You didn't sell a lot of bonds and you were fired.
The unmeritocratic rewards were often based on the personality of a single individual. So, mortgage bond traders and later equity traders became 'runners'--people who left Salomon when they could get more money somewhere else. When they left Salomon and started trading desks in other firms, the profit margins for each firm in this market often collapsed.
Well worth a read.