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House of Cards: A Tale of Hubris and Wretched Excess on Wall Street Paperback – February 9, 2010
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“Cohan's epic account chronicles a watershed moment in Wall Street history.” —The Boston Globe
"Masterfully reported. . . . [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."--Los Angeles Times
"A masterly reconstruction of Bear Stearns’ implosion—a tumultuous episode in Wall Street history that still reverberates throughout our economy today. . . . First drafts of history don't get much better than this." —Bloomberg News
“This book is so rich, so flavorful, so instructive, and so fully and compelling cast that a reviewer hardly knows where to begin.” —The New York Observer
"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 . . . offering both a seemingly comprehensive understanding of the business and wide access to insiders. . . . Hard to put down." —BusinessWeek
"[A]n authoritative, blow-by-blow account of the collapse of Bear Stearns." —The Washington Post
“Cohen’s autopsy uncovers all the symptoms of a walking disaster.” —Newsweek
"A riveting blow-by-blow account." —The Economist
Top Customer Reviews
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.Read more ›
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.Read more ›
I had a summer job on a trading desk and have an MBA, so I have some sense of how the relevant parts of a firm like Bear function. I did not learn more and I think any one with less background would learn less.
To list some things that I think I (and others) might want to know:
1. If Bear Stearns has $17 billion in cash (liquid assets), why is it borrowing about $30 billion every *day*? From whom? Why? What does a firm like Bear do with $30 (or 20 or 40) billion of cash? The author reports how firms like Bear and Goldman do this, but never explains why. He lists the names of firms that supply said cash, but just explains that some banks have deposits (e.g. a B of A type firm) but others like Bear doesn't. Even this explanation doesn't hold much water -- why are Citi and B of A in such trouble then?
2. There is no back story about Bear. It was known as a bare knuckles firm. It's such a contrast to Liar's Poker and Barbarians. I'd argue that it's pretty hard to understand what happened at Bear, etc., if you don't have some sense of what traders do and what a trading desk like. He just tosses in parenthetical conversations with "hey, how are we doing" or "I know things are bad when traders start lying to me", but it would be like trying to understand Mick Jagger without understanding what it's like to be a Rolling Stone. (I'm not saying traders are rock stars, but to cite another example, consider Bonfire of the Vanities -- they do live a different reality than most of us, when they may gamble $500 million or the like, or take home $25 million in salary one year).
3.Read more ›
Most Recent Customer Reviews
Fascinating, although occasionally meandering. Great insight into the Bear Sterns folks and their history as greedy instigators of numerous crises.Published 2 months ago by RunElkridge
Amazing story of wall street greed and incompetenc that reads like a novel with all the twists and turns to keep you on the edge of your reading chair. Read morePublished 3 months ago by Prof. Buck
Good account of the fall of Bear Sterns and related players. Provides fundamental aspects of sec products and leverage that led to the liquidity freeze.Published 4 months ago by PNS
What a wild a perplexing financial time we live in. Feel the Bern, time for the Marxist revolution.Published 5 months ago by John N. Soldano
It's pretty boring if you know finance. The story is fast but it's hard to make idiots seem interesting. They over bet and didn't do any risk management. Read morePublished 6 months ago by D. Norman
A very interesting and well-written book, detailing what nonafficionados like me always suspected went on in the world of investment and finance. Read morePublished 16 months ago by Daniel Solomon
Transaction completed fast and without any complaint on the item.Published 16 months ago by Marn Seng Cheong