10 of 11 people found the following review helpful
4.0 out of 5 stars 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...
Published on 10 July 2009 by Gaurav Sharma
3 of 3 people found the following review helpful
2.0 out of 5 stars Bearing All?
William D. Cohan, a journalist for the Financial Times and Fortune magazine and formerly an "investment" banker on Wall Street, has written an account of the financial company Bear Sterns from its inception to its demise during the initial stages of the recent financial crisis.
Cohans starts of his tale at the end with an account of the goings on as Bear Sterns...
Published on 24 Jun 2010 by S Wood
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10 of 11 people found the following review helpful
4.0 out of 5 stars The story of Jimmy Cayne, his house of cards, its recklessness and fall from grace,
This review is from: House of Cards: How Wall Street's Gamblers Broke Capitalism: The Fall of Bear Stearns and the Collapse of the Global Market (Hardcover)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.
3 of 3 people found the following review helpful
2.0 out of 5 stars Bearing All?,
This review is from: House of Cards: How Wall Street's Gamblers Broke Capitalism (Paperback)William D. Cohan, a journalist for the Financial Times and Fortune magazine and formerly an "investment" banker on Wall Street, has written an account of the financial company Bear Sterns from its inception to its demise during the initial stages of the recent financial crisis.
Cohans starts of his tale at the end with an account of the goings on as Bear Sterns attempted to stave of liquidation before going on to tell the story of it's inception and life, finally ending on where it began with the companies demise, as well as an ostensibly broader picture of the credit crunch kicking in.
Unfortunately Cohan is unable to transcend his background as an insider and financial journalist and makes little effort, not even a glossary, to describe the terms that he throws around the text with gay abandon, for those without a background in finance, or a working knowledge of the large lexicon of financial terminology. The impression is of someone who, in a manner of speaking, is in love (with perhaps a dash of hate) with the world of high finance (quite literally for the apparently dope smoking Bear Sterns CEO James Cayne) and has written a book primarily for insiders. The compensation package for the financially illiterate is a stirring narrative, of rich, hard working, foul mouthed and folksy bankers, studded with quotation after quotation from many of the main characters in the tragedy, or more likely farce, that makes up Bear Sterns life and death.
With regard to broader issues beyond the internal world of Bear Sterns and Wall Street Cohan is silent, or fairly asinine. The perspective is one that seems unable to step outside the collection of received wisdoms that make up the free-market mantras of Wall Street. Personally if I heard another CEO of a belly up banking company mouth platitudes about the fate of his employees, given the fate of the average American employee under Wall Streets regime, I was going to puke up.
A compelling enough read, but like many of the main personalities of the story, one that is essentially hollow and un-enlightening with the exception of what one can garner by reading between the lines. Personally I'll be looking elsewhere for the story of the credit crunch.
8 of 9 people found the following review helpful
4.0 out of 5 stars An insight into a despicable world,
This review is from: House of Cards: How Wall Street's Gamblers Broke Capitalism: The Fall of Bear Stearns and the Collapse of the Global Market (Hardcover)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.
1 of 1 people found the following review helpful
5.0 out of 5 stars Inside saga of Bear Stearns's dazzling rise and dramatic, abrupt decline,
This review is from: House of Cards: A Tale of Hubris and Wretched Excess on Wall Street (Hardcover)The 2008 collapse of leading Wall Street investment house Bear Stearns showed the world just how rickety the global financial system had become. William D. Cohan tracks the firm's dizzying rise and rapid collapse. His access to Bear Stearns insiders is the book's strongest point. He offers a trenchant analysis of its decades-long rise and a definitive account of its final days. Cohan paints textured portraits of Bear's top people, though he isn't especially interested in translating their Wall Street jargon for lay readers. He lets his sources speak in their own patois. getAbstract recommends this book to business history buffs, investors and managers seeking perspective on a spectacular failure.
3.0 out of 5 stars Christams present,
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This review is from: House of Cards: How Wall Street's Gamblers Broke Capitalism (Paperback)This arrived in time for Christmas, hope the son in law enjoys reading it. It was well packaged and arrived poromptly.
2.0 out of 5 stars just about bear sterns,
This review is from: House of Cards: How Wall Street's Gamblers Broke Capitalism (Paperback)very disappointed as i was expecting a full story about the financial crisis, but this is only about bear sterns' fall. the story in itself is finished after the first 3rd, then he goes on to give some background about all of the senior BS executives, some history about the firm, etc...
read it only if you want a great level of detail about this specific point, but if you're looking for a more generic telling of the crisis then read something else.
4.0 out of 5 stars A House Of Cards indeed,
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This review is from: House of Cards: How Wall Street's Gamblers Broke Capitalism (Paperback)This is the third book by William D. Cohan I have read. The other two were Money and Power: How Goldman Sachs Came to Rule the World and The Secret History of Lazard Freres & Co. If I had to choose between the three of them I would say that House of Cards is the best. The other two books are more descriptive in nature, whereas the pace of House of Cards is much faster as the narrative is almost entirely driven by quotes of the people involved. I think that is an excellent way in telling the story of Bear Stearns (I won't abbreviate it as BS because that often means something else).
The book comes in three parts with Part One telling the last week of the bank and its take-over by JP Morgan. The assertion by one of the senior Bear Stearns people that the bank was done in by malicious rumours made me smile because every other banker will try to convince you that he is the angel and all the others are the culprits.
Part Two tells the history of Bear Stearns from its beginnings in 1923 to about 2001. Cohan does so by spending a lot of time on three people who drove the bank's development from beginning to the end. I won't recount more details here because others have done so but as I read it I felt that the seeds of Bear Stearns' bankruptcy were planted in the mid- to late 1980s. This part also covers a fair bit of the demise of Long-Term Capital Management. If you want to know everything about this affair Cohan suggests that you should read When Genius Failed: The Rise and Fall of Long Term Capital Management because it covers the affair quite well.
Part Three deals with the events which led to the bankruptcy of Bear Stearns. This was aided by the criminal behaviour of the two guys who ran the hedge funds - and if you want my opinion they should be hung from the next lamp post - as much as aloof senior management and the fact that Bear Stearns found itself at the wrong end of the market. I know that the investment choices of the likes of Lehman and Merrill Lynch were just as bad, but some other banks and funds came out quite well.
The Epilogue deals with the day after and the Lehman and Merrill cases. There is also quite a bit on what the senior Bear Stearns people are doing at the time of writing (2009). Cohan also asks if there will be similar crisis in future and his answer is a definite `Yes' and I would agree. If in doubt, I suggest you read This Time Is Different: Eight Centuries of Financial Folly to find out how well the financial world has performed on this account in the last eight centuries.
Someone here complained that Cohan uses too much financial jargon. Yes, it does help if you know your basic credit terms. If you don't, you should perhaps read The Big Short: Inside the Doomsday Machine because it explains quite thoroughly the meaning of the terms used and the basic concepts behind it.
All told I love Cohan's way of telling the story, his sense of humour and the suspense he manages to build up and hold to the end of the book. This is definitely a page turner.
4.0 out of 5 stars House of Cards,
This review is from: House of Cards: How Wall Street's Gamblers Broke Capitalism (Paperback)An enjoyable read. Learning from men at the top of their game fall to the bottom within the space of a few months. I was gripped from the offing.
4.0 out of 5 stars Jaw-dropping!!,
This review is from: House of Cards: How Wall Street's Gamblers Broke Capitalism (Paperback)One of the most engrossing books I have read for a long time, this is Wall Street laid bare (if you pardon the pun).
The pace of this book starts at full-pelt with the collapse of Bear Sterns, gives you time to catch your breath with the history behind the company and the various characters that built the company up, and then takes off again sprinting to the finish with the demise of Lehman Brothers.
The most depressing thing about this book is that the banking world regard such crashes as an entirely natural phenomenon, part of the financial cycle of life, which pretty much encapsulates the deluded and completely skewed view of the world banks still have.
Other reviewers have covered in some detail the various chapters of this book, so I won't expand any further, but this is a cracking read.
The only reason I did not give this book a 5-star rating was because of the lack of a glossary, which would have made navigating the murky waters of international banking a little easier.
4.0 out of 5 stars How it all came tumbling down...,
This review is from: House of Cards: How Wall Street's Gamblers Broke Capitalism (Paperback)Wall Street has long been a source of fascination for me and many people. It's kind of frightening to think that the money you earn and spend, the money you invest in pensions and savings, and the debts you incur are all influenced by the actions of a relatively small group of (mainly) men located in financial centres like Wall Street.
House of Cards tells the story of Bear Stearns, a global investment bank, which was the first major casualty of the recent crisis in the financial markets. Bear Stearns was a pioneer in the area of securitisation and asset-backed securities which initially resulted in bumper figures at the bank, but ultimately led to its downfall in 2008. This resulted in the bank being sold in a firesale to JP Morgan Chase.
The story starts in 2008 and recounts the mounting pressure on the bank's executives as they faced an unparalleled liquidity crisis in the overnight lending market, resulting in the sale of the proud and historic bank, all in the space of just 10 days. Having established the present, Cohan then starts to take us through the history and key personalities of Bear Stearns.
What emerges is a portrait of how powerful and dominant personalities came to be in charge of billions of dollars. One of the main figures in the rise, and ultimate downfall, of Bear Stearns is long-serving CEO Jimmy Cayne. Named as one of the worst American CEOs of all time, Cayne is endemic of both the brilliance and faults that lay at the heart of the bank. A championship bridge player, he was playing in a tournament when B.S. hedge funds experienced difficulty, and it was clear to see that he did not comprehend the financial instruments upon which the success of Bear Stearns had been built.
Cohan paints a picture of character over integrity, forcefulness and personality over knowledge and regulation. It is a scary world, full of folly. Many people are confused about recent events, but House of Cards is a wonderful place to start to learn. It is well researched, detailed and well-written. Cohan does not eulogise, but simply presents the personalities and facts. There is no need for embellishment - the outcomes of recent years speak for themselves.
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House of Cards: How Wall Street's Gamblers Broke Capitalism by William D. Cohan (Paperback - 4 Feb 2010)