John Gutfreund — the legendary banker in 'Liar's Poker' — has died
AP Images
John Gutfreund, the former 'King of Wall Street' who was immortalized in Michael Lewis book "Liar's Poker," died on Wednesday, The Wall Street Journal reports.
Gutfreund turned Wall Street firm Salomon Brothers into a trading powerhouse, and stories of his time in finance have captured the imaginations of bankers and want-to-be-bankers for decades.
He worked at the bank for 38 years, describing it as “the greatest trading organization the world has ever known.”
While he was at the top there, he was 'The King of Wall Street.' He resigned from the firm in 1991, as the company was going through a Treasury bond scandal. The firm had cornered the market for two-year Treasuries, violating regulations.
Gutfreund, for his part, was unapologetic, according to the WSJ:
Nestled in his elegant 43rd-floor office in 7 World Trade Center overlooking the Hudson River, Mr. Gutfreund initially sought to tough it out. Dressed in his trademark dark suit and white shirt, he told top executives at a closed-door meeting shortly after the disclosures: "I’m not apologizing for anything to anybody. Apologies don’t mean s—. What happened, happened.”
Warren Buffett eventually had to step in and take control of the bank — something the Oracle of Omaha, who is not at home in New York City — did not enjoy in the least.
New York was not to Buffett's taste, but it suited Gutfreund down to the ground. He was embodiment of the high-stakes banking style of the 1980s, when regulation was loose and risk was rampant. He oversaw a massive, crowded trading floor like a Roman General.
For evidence of Gutfreund's aura, one need look only at the first scene in Michael Lewis' iconic book, "Liar's Poker." In it, Gutfreund proposed playing one hand of Liar's Poker. It's a game that requires gamesmanship and knowledge of probabilities highly valued by the traders. At stake was $1 million.
Gutfreund's opponent, John Meriwether, regarded as Salomon Brothers' best player, didn't want to beat the CEO, so he got Gutfrend to back down by saying he'd only play for $10 million.