House of Cards: A Tale of Hubris and Wretched Excess on Wall Street (Hardcover)

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Editorial Reviews

Review

"Engrossing....[Cohan] gives us in these pages a chilling, almost minute-by-minute account of the 10, vertigo-inducing days that one year ago revealed Bear Stearns to be a flimsy house of cards in a perfect storm....He does a deft job of explicating the underlying reasons that put Bear Stearns in peril in the first place....turns complex Wall Street maneuverings into high drama that is gripping and almost immediately comprehensible to the lay reader....riveting, edge-of-the-seat reading"
--Michiko Kakutani, The New York Times

"Cohan vividly documents the mix of arrogance, greed, recklessness, and pettiness that took down the 86 year old brokerage house and then the entire economy. It's a page-turner in the tradition of the 1990 Barbarians at the Gate by Bryan Burrough and John Heylar, offering both a seemingly comprehensive understanding of the business and wide access to insiders....hard to put down, especially thanks to its dishy, often profane, quotes from insiders" --BusinessWeek

"Masterfully reported....[Cohan] has turned into one of our most able financial journalists....he deploys not only his hands-on experience of this exotic corner of the financial industry but also a remarkable gift for plain-spoken explanation...the other great strength of this important book is the breadth and skill of the author's interviews...Cohan does a brilliant job of sketching in the eccentric, vulgar, greedy, profane and coarse individuals who ignored all these warnings to their own profit and the ruin of so many others. It's impossible to do justice to his reportorial detail in a brief review..." -- Los Angeles Times


"A riveting blow-by-blow account of the days leading up to the government-backed shotgun wedding (to JPM)." -- The Economist

"A masterly reconstruction of Bear Stearns implosion--a tumultuous episode in Wall Street history that still reverberates throughout our economy today....meticulous reporting.....first drafts of history don't get much better than this" --Bloomberg

[Audio Review] CNBC financial reporter Cohan's account of the sudden collapse of the Wall Street firm Bear Stearns last March is largely interview based. This fine production is undoubtedly only the first of many books on the current market crisis, and Alan Sklar is the perfect narrator for conveying the tough vernacularism of these (almost-entirely) male voices. The cast is large, hard to keep track of, and through the book's long first part a "minute-by-minute" reconstruction of the collapse each voice recounts a variation on the same basic epiphany: "We're finished." The voices merge into one, and what comes across most distinctly is Sklar's rendition of the Wall Street personality: brusque, cynical, assured to the point of arrogance the voice of hubris. D.A.W. © AudioFile 2009, Portland, Maine --AudioFile --This text refers to the Audio CD edition.

Review

"Engrossing....[Cohan] gives us in these pages a chilling, almost minute-by-minute account of the 10, vertigo-inducing days that one year ago revealed Bear Stearns to be a flimsy house of cards in a perfect storm....He does a deft job of explicating the underlying reasons that put Bear Stearns in peril in the first place....turns complex Wall Street maneuverings into high drama that is gripping — and almost immediately comprehensible — to the lay reader....riveting, edge-of-the-seat reading"
--Michiko Kakutani, The New York Times

"Cohan vividly documents the mix of arrogance, greed, recklessness, and pettiness that took down the 86 year old brokerage house and then the entire economy. It's a page-turner in the tradition of the 1990 Barbarians at the Gate by Bryan Burrough and John Heylar, offering both a seemingly comprehensive understanding of the business and wide access to insiders....hard to put down, especially thanks to its dishy, often profane, quotes from insiders" --BusinessWeek

"Masterfully reported....[Cohan] has turned into one of our most able financial journalists....he deploys not only his hands-on experience of this exotic corner of the financial industry but also a remarkable gift for plain-spoken explanation...the other great strength of this important book is the breadth and skill of the author's interviews...Cohan does a brilliant job of sketching in the eccentric, vulgar, greedy, profane and coarse individuals who ignored all these warnings to their own profit and the ruin of so many others. It's impossible to do justice to his reportorial detail in a brief review..." -- Los Angeles Times


"A riveting blow-by-blow account of the days leading up to the government-backed shotgun wedding (to JPM)." -- The Economist

"A masterly reconstruction of Bear Stearns implosion--a tumultuous episode in Wall Street history that still reverberates throughout our economy today....meticulous reporting.....first drafts of history don't get much better than this" --Bloomberg

See all Editorial Reviews

Product Details

• Hardcover: 480 pages
• Publisher: Doubleday; First Edition edition (March 10, 2009)
• Language: English
• ISBN-10: 0385528264
• ISBN-13: 978-0385528269
• Product Dimensions: 9.4 x 6 x 1.3 inches
• Shipping Weight: 2 pounds (View shipping rates and policies)
• Average Customer Review: 3.3 out of 5 stars  See all reviews (78 customer reviews)
• Amazon.com Sales Rank: #3,240 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

268 of 283 people found the following review helpful:

3.0 out of 5 stars Very Vanity Fair in style, maybe half the story, March 20, 2009

By	T. Tepe (California) - See all my reviews (REAL NAME)

I have been a banker for 20 years and have specific experience with asset backed securities so I think I am better prepared to read this book than most, but certainly not all, people.

Cohan writes with great flair and a style best compared to celebrity profiles in Vanity Fair. He clearly had extraordinary access to former BSC execs, especially Paul Friedman and Jimmy Cayne. It seems like one of these two is speaking in verbatim quote most of the time. I learned a lot and thoroughly enjoyed reading the book. That said, I'm not comfortable with the book. It's half the story selected because the bits make for a dishy, dirt rich read. To me, Cohan was more concerned about writing a best-seller than he was about telling the whole story in some sort of reasonable context.

I agree with the reviewer that said the book was rushed into print. The editing, especially in the second half is pretty bad. There are repeated references to antecedent events that must have ended up edited out, e.g. a reference to "the Tuesday 'Times' article" when there was no prior mention of any such article- stuff like that. There are many occasions where the events are conformed to the narrative and Cohan bounces around in time and sequence and new players come into the story seemingly out of nowhere.

I also got the feeling Cohan wasn't a master of his subject matter at times and "blew through" an event or key concept. If I were in the audience and Cohan was presenting his book, my hand would have gone up and I would have said, "Wait a second, . . ."

The first third of the book covers the last 10 days of the firm and spends a majority of its time talking about the repo market, without any explanation of how the market works or what its abundant jargon translates into English as. Without a Money & Banking text at their side, 98% of readers will be lost and left to focus only on personality clashes, amazingly foul language (even in the context of a trading floor) and petty intrigues. I think that is what Cohan wants.

On the plus side, Cohan lets former BSC CEO Jimmy Cayne speak and speak and speak. Cohan doesn't need to hang Cayne, Cayne hangs himself.

Cohan only quotes sources who blame the sub-prime debacle on lending to minorities and the poor. That contention has been thoroughly debunked with lots of hard data. Cohan ignores that and in doing so does a disservice to minorities, the poor and readers who want to understand what happened.

The book is 30 or 40 hours of page turning reading pleasure. However, it is not the definitive historical text. Before you read the book spend 30 minutes on the net refreshing yourself on the repo market, its participants and mark to market accounting.

110 of 126 people found the following review helpful:

5.0 out of 5 stars Well Told Story of Serious Financial Mismanagement, March 10, 2009

By	Loyd E. Eskildson "Pragmatist" (Phoenix, AZ.) - See all my reviews (TOP 100 REVIEWER)    (REAL NAME)

"House of Cards" reports on the collapse of the investment banking house Bear Stearns (America's fifth-largest investment bank), and the beginning of the worst banking crisis since the Great Depression. Cohan's background as an investment banker allows him to cut through the complexity to explain what happened in simple, clear terms.

Bear Stearns had survived every crisis of the 20th century, including the Great Depression - without a single losing quarter - until the end of 2007. In 1997, Bear Stearns had helped pioneer the subprime mortgage-backed security by serving as co-underwriter on a $385 million offering. By the mid-2000s, it was the market leader in this segment.

The focus of the book is the last ten days of Bear Stearns, leading up to its absorption by J.P. Morgan at a fire-sale price ($10/share, down from $167; less than the value of its $1.5 billion office building), greased by $30 billion in Federal Reserve funds. (The Fed was worried that a bankruptcy of Bear Stearns could wreak fiscal havoc around the world.)

Just a year earlier it had been identified as "America's most admired securities firm" by Fortune magazine; in 2006 its Asset Management fees had reached $335 million. Bonuses were in the 8-figure range. Unfortunately, it was also the most heavily invested in mortgage-backed securities. Bear Stearns, like its competitors, financed itself with oversight sources (the cheapest source).

However, when analysts began questioning Bear's viability, given its shaky mix of assets, continued financing for Bear dried up, and it toppled. Amazingly, its chairman was too buy playing bridge and golf to get involved until too late; earlier he had forced out the only many who understood what was going on. The firm even turned down a last-minute offer from a Saudi Arabian for substantial financing ("not needed"). Its leadership then blamed the media and short-sellers for Bear's demise.

True, Bear's fall was quite rapid. However, there had been warning signs - problems at smaller firms with similar asset structures, rising risk premiums for its mortgage bond holdings ($50,000 for $10 million during the first half of 2007, rising to $350,000 on 3/5/08), its first quarterly loss at the end of 2008, and the downgrading of some of its bond holdings. Worse yet, Cohan also alluded to failing to conserve cash by reducing dividends and ceasing stock buybacks, as well as increasing leverage - unfortunately, it is not clear whether he was referring to Lehman, Bear, or both.

The bad news - the 468 pages, complete with endless interviews and accounts of bridge games, is a bit much. The even worse news - Bear Stearns' and others playing for billions has left American taxpayers with a debt of trillions. And we still haven't heard "the rest of the story."

54 of 64 people found the following review helpful:

5.0 out of 5 stars Way juicier but sort of like watching dominoes fall, March 11, 2009

By	Amy Y. "Tell me, what is it you plan to do wi... (FREMONT, CA USA) - See all my reviews (TOP 1000 REVIEWER)

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Cohan details the bursting of the bubble in a book that reads like part gossip columnist, part financial thriller. Talk about making your average Jane feel smart, Cohan makes the big names of Wall Street look like a bunch of rats scurrying about thinking they have won the cheese when really they are about to get the big, gut-popping smack-down.

I enjoyed this read because, aside from being mildly fascinated by economics, it does seem to answer the question that most American are now asking as they look at their 401Ks, retirement plan statements, and now-empty stock portfolios: "What the hell were they thinking?"

Calling it a 'House of Cards' is quite apt as Cohan shows us how multi-million, er, make it billion, dollar empires were built on quicksand: stuff backed by things backed by more stuff, sorta.

This is some seriously fascinating stuff- many of the chapters read like a financial drama cum thriller. Cohan puts the reader in the middle of the action: the "Wehrmacht" SWAT team of Bank of America 'parachuting into the downtown offices of Sullivan & Cromwell' to review Lehman's books, an edge-of-your-seat account of the weekend that the Fed, specifically, Geithner and Paulson- try to anticipate the consequences of the scenarios (which includes some pretty candid quotes right from the source), you can almost hear the jaws drop as Wall Street is informed there will have to be a "private sector solution" i.e. no bailout for Lehman Bros., the scramble to broker a deal with Barclays to take on the bulk of Lehman, the refusal of the FSA(the UK's version of the SEC who needed to okay the deal) to accept the deal, the back-room conversations exuding palpable fear as CEOs from some of the largest firms considered who might be the next to fall, the thirteenth hour desperation of Lehman execs trying to make a case for a federal bailout, and finally the reality of bankruptcy and no calvary riding in... and, of course, Lehman's was sold to Barclays under the supervision of the bankruptcy court.

While Cohan's book is both entertaining and enlightening, the real value I see here is he does a pretty good job of shoowing us how we got here... why this bubble was different from the others. It's all well and good to say that hindsight is 20/20 but ultimately we're all living with the consequences of the decisions made by a very elite few.

I got through this in one day- the writing is excellent. Very straightforward with the facts without waving around the blame stick too much- it's there in the title, though. Definately, if you are going to read even one book about how we arrived at this financial crisis- this would be a great choice.