Product Description

On the evening of March 16, 2008, Bear Stearns, a swashbuckling eighty-five-year-old institution in the financial world, sold itself for an outrageously low price to the $2 trillion global behemoth JP Morgan Chase. Bear Stearns no longer existed, and the calamitous financial meltdown of 2008 had begun. What went wrong? In House of Cards bestselling author and former investment banker William Cohan gives the reader a front-row seat at Wall StreetÂ’s catastrophic unravelling at the seams, and the end of the Second Gilded Age on Wall Street. Through the prism of Bear Stearns, he shows how a combination of risky bets, corporate political infighting, lax government regulations and truly bad decision-making have wrought havoc on the world financial system. CohanÂ’s minute-by-minute account of those ten days in March makes for breathless reading, as the bankers at Bear Stearns struggled to contain the cascading series of events that would doom the firm, as the US government and federal bank began to realize the dire consequences for the world economy should the company go bankrupt. But HOUSE OF CARDS does more than recount the incredible panic of the first stages of the financial meltdown. William D. Cohan beautifully demonstrates why the seemingly invincible Wall Street money machine came crashing down. He chronicles the swashbuckling corporate culture of Bear Stearns, the strangely crucial role competitive bridge played in the companyÂ’s fortunes, the brutal internecine battles for power, and the deadly combination of greed and inattention that helps to explain why the companyÂ’s leaders ignored the danger lurking in BearÂ’s huge positions in mortgage-backed securities. Full of insider knowledge and larger-than-life characters, such as Ace Greenberg, Bear StearnsÂ’ miserly, take-no-prisoners chairman and his profane, colorful rival Jimmy Cayne, whose world-champion-level bridge skills were a lever in his corporate rise and the firmÂ’s demise; and Jamie Dimon, the blunt-talking CEO of JPMorgan Chase, who won in the end, House of Cards is a shocking tale of greed, arrogance and stupidity in the financial world, and the consequences for all of us.

Product Details

• Amazon Sales Rank: #11734 in Books
• Published on: 2009-03-05
• Original language: English
• Binding: Hardcover
• 480 pages

Review
You should personally dog-ear a copy of William Cohan's House of Cards ... the book is annoyingly hard to put down, especially thanks to its dishy, often profane, quotes from insiders. The book's galling takeaway: Bear Stearns earned billions setting the stage for the world to lose trillions. Read it, learn--and weep. --Business Week

Review
A riveting, blow-by-blow account ... Mr Cohan handles his material deftly, portraying Bear as symptomatic of an industry that had come to believe its own hype and had lost sight of how inherently unstable it really was. Bear's crash marked the moment when a delirious Wall Street was knocked to its senses.

Review
First drafts of history don't get much better than this.

Customer Reviews

The story of Jimmy Cayne, his house of cards, its recklessness and fall from grace
In March 2008, when Bear Stearns was hurriedly pushed by the U.S. government into accepting a rescue act by J.P. Morgan Chase, many correctly thought it was the beginning of the end of investment banking as we know it. Lehman Brothers' collapse followed in September that year with Wall Street reeling, having believed in its own hype and covered wretched excesses for years. Bear Stearns' fall from grace typified the hubris writes William Cohan.

In a fast paced narrative, Cohan - a former banker himself - explains how the investment bank earned massive profits only to be trumped by even larger losses courtesy irresponsible investments. He articulates that Bear Stearns, though publicly listed since 1985, was a closeted and arrogant partnership of individuals fixated on profits. The architect of the "good years" and the spectacular fall which followed was Jimmy Cayne, its long serving CEO.

Cayne named by my former employers CNBC as one of the "Worst American CEOs of All Time" is classically described as by the author as a "Sophoclean tragic hero, ruined by his own terrible choices." He was the architect of Bear's over-exposure to mortgage backed securities (MBS) that became near impossible to sell as the US housing market first slowed and then started crashing.

Sums of capital invested and lost were staggering. Within a matter of days Bear Stearns went from a perceptively healthy corporate brand name to a dead corporation with severe doubts about its solvency. The story is there in this book with all the gory details.

It makes references to Jimmy Cayne's fixation on playing Championship Bridge and for lack of a better metaphor brands Bear's structure under his watch as a "House of Cards" that could and actually did come down with the slightest of headwinds. As its share price was tumbling from its perch of $170 towards $10 many of its management including Cayne grumbled that people could not separate fact from fiction. Many prudent observers, including the author, thought it was Bear's management holding that misleading notion.

For all this moaning and groaning, it is thought Cayne and co. were busy playing Bridge when two Bear Stearns hedge funds collapsed in July 2007, and again in March 2008 when their investment bank was driven in a state of near desperation to the arms of J.P. Morgan. These were the same management guys under whom Bear had been the only big Wall Street name that refused help to Long Term Capital Management (LTCM) - a hedge fund which ran into trouble in 1998. (See for example: When Genius Failed: The Rise and Fall of Long-Term Capital Management, By Roger Lowenstein)

Cayne's cardinal sin was the failure to diversify and an innate inability to take criticism from colleagues as well as external observers. Instead he pushed on with a strategy that sent Bear's balance-sheet swelling by as much as 45 times its equity. It banked on a relentless and aggressive push into complicated credit markets. Suspicions still exist on Wall Street that Cayne never really understood such complicated instruments but was blinded by the money.

The result, there for all to see, carries a much broader message writes the author. He opines that Bear's near ruin brought about a reality check on Wall Street. It was a moment that many professionals, including some at Bear, saw round the corner. I really enjoyed reading this book and would be happy to recommend it to anyone interested in the wheeling and dealing of toxic assets on Wall Street.

An insight into a despicable world
As I read this excellent book, a quote from 'Gulliver's Travels' kept recurring - the response of the King of Brobdingnag to Gulliver's explanation of life back home: "the most pernicious race of odious little vermin that Nature ever suffered to crawl upon the surface of the earth".

If Dickens had written 'House of Cards', each and everyone of the ghastly parade of characters would have been described, warts and all. Cohan is no Dickens, of course, so the book would have been better with photos of its hideous protagonists so we, the innocent, could eye-ball the perpetrators.

What we have here is a fast-paced expose of all that went wrong at finance house Bear Stearns, and the aftermath of its dramatic collapse. Here is venality and avarice in biblical proportions, sums of money made and lost that are eye-watering, both for their size and the blase nature of their destruction.

If you're like me, a hard-working, cautious investor who pays his taxes and saves for retirement, then you'll read this with growing consternation and anger. It's good to do, if only to know where it went wrong and have someone to blame for an increasingly uncertain future.

It's written well, and clearly grounded on solid research, both attributed and anonymous. It beggars belief what has come to pass and we should all understand it, just to prevent it happening again.

The characters at the dark heart of 'House of Cards' are the enemies of capitalism, ruthlessly exploiting it for their own accumulation of wealth and self-aggrandisement by sucking value out the market, rather than adding value to it.

William Coham has done us all a great service by charting what went wrong. Just one plea for the paperback: tell us where they're all working now so we don't give them any more money.

Slow but fascinating
A brilliant insight into the nature fancier greed and avarice. Very detailed and this might put off the less financially informed readership. Still - it is well worth the effort. When you have read this you will understand where your pension has gone and why your job was lost.