Winner of the Financial Times/Goldman Sachs Business Book of the Year Award
Synopses & Reviews
On March 5, 2008, at 10:15 A.M., a hedge fund manager in Florida wrote a post on his investing advice Web site that included a startling statement about Bear Stearns and Co., the nation's fifth-largest investment bank: "In my book, they are insolvent"
This seemed a bold and risky statement. Bear Stearns was about to announce profits of $115 million for the first quarter of 2008, had $17.3 billion in cash on hand, and, as the company incessantly boasted, had been a colossally profitable enterprise in the eighty-five years since its founding.
Ten days later, Bear Stearns no longer existed, and the calamitous financial meltdown of 2008 had begun.
How this happened — and why — is the subject of William D. Cohan's superb and shocking narrative that chronicles the fall of Bear Stearns and the end of the Second Gilded Age on Wall Street. Bear Stearns serves as the Rosetta Stone to explain how a combination of risky bets, corporate political infighting, lax government regulations and truly bad decision-making wrought havoc on the world financial system.
Cohan'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, and as Treasury Secretary Henry Paulson, New York Federal Reserve Bank President Tim Geithner, and Fed Chairman Ben Bernanke 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 company's fortunes, the brutal internecine battles for power, and the deadly combination of greed and inattention that helps to explain why the company's leaders ignored the danger lurking in Bear's huge positions in mortgage-backed securities.
The author deftly portrays larger-than-life personalities like Ace Greenberg, Bear Stearns' miserly, take-no-prisoners chairman whose memos about re-using paper clips were legendary throughout Wall Street; his profane, colorful rival and eventual heir Jimmy Cayne, whose world-champion-level bridge skills were a lever in his corporate rise and became a symbol of the reasons for the firm's demise; and Jamie Dimon, the blunt-talking CEO of JPMorgan Chase, who won the astonishing endgame of the saga (the Bear Stearns headquarters alone were worth more than JP Morgan paid for the whole company).
Cohan's explanation of seemingly arcane subjects like credit default swaps and fixed- income securities is masterful and crystal clear, but it is the high-end dish and powerful narrative drive that makes House of Cards an irresistible read on a par with classics such as Liar's, Poker and Barbarians at the Gate.
Written with the novelistic verve and insider knowledge that made The Last of the Tycoons a bestseller and a prize-winner, House of Cards is a chilling cautionary tale about greed, arrogance, and stupidity in the financial world, and the consequences for all of us.
"Cohan's portrayal of the firm's dominant partners — whose gargantuan appetites and mercurial habits provide the unifying force behind the book's operatic melodramas — makes this an epic.... In fact, The Last Tycoons bears a striking resemblance to F. Scott Fitzgerald's The Last Tycoon." New York Times Book Review
"Breezy and highly readable....For those of us who enjoy high-level gossip (most people) and an inside look at the machinations, triumphs, failures, and foibles of some of Wall Street's and America's most exalted personages, Cohan's book is entertaining and seductively engrossing." Chicago Tribune
"Cohan's thoroughness — he interviewed over 100 current and former bankers and assorted bigwigs — unearths a trove of colourful tidbits, many quite racy....Illuminating are Mr. Cohan's descriptions of the scheming, politicking, and general dysfunction that was Lazard." Economist
"The Last Tycoons] has sent a jolt through Lazard and the rest of Wall Street." Wall Street Journal
In March 2008, Bear Stearns, a swashbuckling eighty-four-year-old financial institution, was forced to sell itself to JPMorgan Chase for an outrageously low price in a deal brokered by Treasury Secretary Henry Paulson, who was desperately trying to prevent the impending catastrophic market crash. But mere months before, an industry-wide boom had the Bear clocking a record high stock price. How did a giant investment bank with $18 billion in cash on-hand disappear in a mere ten days? In this unputdownable narrative tour de force, Cohan provides a minute-by-minute account of the events that brought America's second Gilded Age to an end.
Filled with intimate portraits of the major players, high-end gossip and smart financial analysis, House of Cards recounts, in delicious narrative form, the dramatic events behind the fall of Bear Stearns, and what it revealed about the financial world's progression from irrational boom to cataclysmic bust. House of Cards is the Rosetta Stone for understanding the dramatic and the unprecedented events that have reshaped Wall Street and global finance in the past two years.
In this superb and shocking narrative, Cohan chronicles the fall of Bear Stearns and the end of the Second Gilded Age on Wall Street. Cohan's minute-by-minute account of 10 days in March 2008, tells a chilling cautionary tale about greed, arrogance, and stupidity in the financial world, and the consequences for all of us.
About the Author
William D. Cohan, a former senior Wall Street investment banker, is the bestselling author of The Last Tycoons and the winner of the 2007 FT/Goldman Sachs Business Book of the Year Award. He writes for The Financial Times, Fortune, the New York Times, the Washington Post, the Daily Beast, and appears frequently on CNBC.