House of Cards: A Tale of Hubris and Wretched Excess on Wall Street |  | Author: William D. Cohan
Publisher: Doubleday
List Price: $27.95
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Seller: tanasbooks
Rating:  78 reviews
Sales Rank: 1603
Media: Hardcover
Edition: First Edition
Pages: 480
Number Of Items: 1
Shipping Weight (lbs): 2
Dimensions (in): 9.4 x 6 x 1.3
ISBN: 0385528264
Dewey Decimal Number: 332.660973
EAN: 9780385528269
ASIN: 0385528264
Publication Date: March 10, 2009
Availability: Usually ships in 1-2 business days
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Product Description
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 & Co., the nationâs fifth-largest investment bank: âIn my book, they are insolvent.â
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 â and why â is the subject of William D. Cohanâs 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.
Cohanâs 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 companyâs fortunes, the brutal internecine battles for power, and the deadly combination of greed and inattention that helps to explain why the companyâs leaders ignored the danger lurking in Bearâs huge positions in mortgage-backed securities.
The author deftly portrays larger-than-life personalities like Ace Greenberg, Bear Stearnsâ 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 firmâs 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).
Cohanâs 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 LIARâS POKER and BARBARIANS AT THE GATE.
Written with the novelistic verve and insider knowledge that made THE LAST 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.
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Showing reviews 1-5 of 78
 High expections, poor delivery! The author is just as greedy as the ones discussed in the book... November 8, 2009
Lionel Lanuza
2 out of 2 found this review helpful
If you don't work in Wall street; do not buy this book! The author intentionally wrote this book for the common audience to understand the internal mechanics of how the financial sector collapse. After reading the first half of the book; I'm painstakingly researching terms used by the author that is common lingo with financial gurus. If you are looking to understand how and why wallstreet collapsed, this is not the book for you. It may as well be written in Spanish.
There was tremendous hype built around this book. Shortly after the collapse of the financial sector, a curious audience tuned in to the news listening to the financial jargon of editors and writers about credit swap defaults, sub prime mortgage mess, and highly leveraged financial institutions. The author, William Cohen, came out on a few shows on national television pitching his book to the audience. On one particular show on Comedy central; he talked about how he explains in his book the evolution of the financial crisis meltdown in basic terms such that the people could understand what these financial analysts are saying. This book is very hard to understand, poorly written, and seemed as though it was rushed.
I say that the author is just as bad as the greedy wall street CEOs because he obviously led me to believe that this book was decent enough for the common audience to appreciate and understand. However, its just a pitch to make a sale so he can make money.
 Jack of Hearts November 3, 2009
Star Bux
1 out of 1 found this review helpful
The title of the book, makes me imagine a tower composed from a deck of
cards, and then maybe a paper airplane flying into that "house of cards".
Were things really that "structurally" fragile?
I do not think you can really read and understand this book if you do not
first understand the basic vocabulary: For example, without knowledge
of what words such as Mortgage Backed Security (MBS), or Subprime mean,
how will you understand how loans were made, and then the money owing
to the institution (or party) who made the loan, was sold by that institution
(or party) to somebody else, for a price, and that that somebody ended up with
essentially a mispriced bond, while the originator of the loan got cash and
no longer had to worry about the person (or family) they lent the money to?
A mortgage is a "funny" loan. It is "funny" (strange, not ha-ha) because the
interest rate tends to vary, every few years, whereas with a traditional loan
the interest rate is fixed. I guess if you are really "smart" instead of applying for
a 100 grand mortgage, you would instead apply for a 100 grand loan to buy a
Ferarri instead, but then use the proceeds to buy a house before "they" figure out
that you decided to call your house, "Ferrari".
And then there are these institutions called Fannie Mae, and Freddie Mac...
Which were set up to help people find a place to live, who could not otherwise
afford to do so. Which makes sense, because if USA Inc. is going to employ
individuals, it helps if those individuals have a place to stay, otherwise they
might end up camping near factories, a place of work...It is disturbing that the
manufacturing sector in the US has been shutting down factories and moving
them overseas for the past few decades...The Wealth of a Nation depends upon
what that Nation can make, or provide in terms of products and services, whereas
the Living Standard of a people is determined by what they can acquire.
A nation can be rich, while its people are poor. Some economists, such as John
Kenneth Galbraith, I think, have said that the reason you want to tax the rich to
give to the poor is to help reduce the costs of policing discontent, to reduce the
possibility of civil unrest, crime, and even anarchy. Adam Smith in his book,
Wealth of Nations,noted that a healthy labour force is a productive labour force,
and was therefore an early proponent of socialized medicine (as well as socialized
education). In other words, it is in the best interest of the rich that the poor not
be so poor. For having to go grocery shopping to be met by armed security guards
does not equate to a "high living standard" in the minds of most people who have
money, or food stamps, to spend.
Have you ever noticed that if you go into a bank to ask for a loan (specifically
a mortgage) you might also be tempted to invest in a mutual fund? But what
you will not be presented with is a list of real estate listings in your neighbourhood.
Banks sell mortgages, and not houses. I guess if they sold houses, somebody
might come back and say, There is a problem with the drywall, I want a refund.
They who are good at accounting tend not to be good at physics, chemistry,
plumbing, electrical, or drywall construction problems. A salient feature of modernity
is the interdependency of economic life.
I once asked a stock broker how I could buy (invest in) a bond. He looked at me and
said, I don't know...I still have not figured out how to do that, although discount
brokerages abound allowing anybody with cash and a bank account it seems to open
up a stock-trading account with little difficulty...Many it seems would like to blame
the mortgage default problem on Moody's, the credit rating agency, because they
feel Moody's should have seen that the MBS paper was risky, and rated it as such,
relatively early on. But it is important to note that legally speaking, Moody's published
opinions, and was not paid for the accuracy of those ratings, only for the privilege of
offering an opinion. Moody's reputation has been tarnished, is not considered a
trustworthy company now because their employees were not good at their j-o-b.
That is cold-comfort to the investors, however.
SUBPRIME is an odd word, it does not have to do with interest rates, but it is a classification,
an adjective used to describe individuals with either a lack of credit history, or having a poor
credit rating, in other words, persons with a high probability of defaulting on their debt
obligations. And so, mortgage backed securities which "pooled" (collected) the loans made,
into a single giant loan (mortgage backed security) composed of many subprime loans,
really were risky, assuming the vocabulary is correct.
Economists speak of a moral-hazard problem: If persons are able to borrow money, buy
homes, but then later hand in the keys, and simply walk away having declared bankruptcy,
...will banks be willing to make loans in future? Maybe. For a similar reason, insurance
policies often contain a clause about a deductible, and it is a reason why bankruptcy laws
are written so that "declaring bankruptcy" is not that easy, "without consequence", so that
the system of making loans might yet continue.. Obtaining a mortgage to buy a house, not
to live in, but to "flip it", as in sell it at a higher price, is akin to buying stocks on margin.
And like the asset price bubble that occurred in the stock market, it was not too difficult to
predict (or foresee) a real estate asset price bubble either. For many began to buy houses
with the prospect of selling them for higher prices than they paid, as if those houses were
stocks. And banks were willing to lend them cash, to help them "buy on margin".
And now the financial system appears to be either "evolving", or being systematically replaced
with a new economic system which seems oddly reminiscent of the old Soviet system. Imagine
an economy where children are raised to achieve their "full potential", but that potential is
defined by the state rather than the individual. It will be an economy where very few might be
given the luxury of leisure. Abraham Lincoln once said, Let him who does not have a house
not be allowed to tear down the house of him who has, so that when he has a house of his own,
he might not be afraid that somebody might tear down his. Of course, in the days of Lincoln,
a person would go out into the woods with an axe and build himself a log cabin, and would call
that a house. But today, people want windows, electricity, and plumbing. The concept of a "Jack
of all trades" does not seem desirable, or practical. If they who worked on Wall Street had only
been honest with respect to the accounting...If the US had taken Pat Buchanan's advice that
"Protectionism works" (keep the factories at home)...If the oil companies had continued to build
oil refineries during the eighties...But things happen for a reason, in the mystical sense of
"dynamic optimization". That is to say, that at any given moment, the status quo is actually the
best possible outcome given the fallen nature of men. To really change things, people will need
to look within themselves and make that change, before their environment can heal. For God is
Love, and all things are possible with him. Jesus fed five thousand with five loaves of bread and
two fish...A credit crisis, is "nothing": Virtual, really.
"The fault dear Brutus, lies not in the stars, but in ourselves".
- Julius Cesar, the play by Shakespeare.
J.P. Morgan, the Wall Street Financier, once said, "I never gamble". However, he was also
known to see an astrologer. Maybe she was just a close friend. Or he found psychiatry too
expensive in comparison.
 Too gossipy and too many second string characters October 24, 2009
andris virsnieks (Seattle, WA USA)
1 out of 1 found this review helpful
This book needs more analysis and fewer stories written with a "novelistic verve". It is a chilling story but the "trove of colourful tidbits" tends to be distracting.
The author is no better than Bear Stearns - going for the quick buck October 18, 2009
R. J. McCabe (Seattle by way of Arizona - Go Wildcats! Go Huskies!)
3 out of 3 found this review helpful
This is a poorly written tale of the financial follies of the "masters of the universe". Repetitious and amazingly uninformative (unless you like human interest stories where people swear a lot, but don't know what's happening). That said, it's timely, so the author will make $$.
Financial terms and practices weren't explained so the average reader won't know what was actually happening. Interestingly, even the major players didn't seem to know (or want to admit they knew) why Bear was failing.
To me the most interesting angle (that wasn't really explored) is that THE FED PERHAPS CAUSED THE ENTIRE MELTDOWN in confidence in Bear Stearns because of their phone calls to other firms that suggested Bear wasn't a viable enterprise anymore. Was this a ploy to destroy Bear before granting financial help to the survivors (especially JP Morgan/Chase -- who seem to be the GOLDEN BOYS among financial firms these days).
SERIOUS QUESTION -- why didn't Secretary of the Treasury Paulson give back the tens of millions in bonus money he "earned" from Goldman Sachs for doing the same stuff that got Bear Stearns (and other financial institutions) in trouble when the ponzi schemes blew up last year?
Regurgitation of Not-So-Pertinent Information September 24, 2009
AkulJay (So. California)
4 out of 4 found this review helpful
The title & sub-title of the book are very catchy but totally inappropriate. The book is entirely -- except for the 24 pages of 'Epilogue' -- about Bear Stearns, but never really shows how it was a 'House of Cards' or describes much where 'hubris' and 'wretched excess' were. I have learned from other sources that most of the activities in which Bear Stearns was engaged for decades were legit and not particularly risky until it got more and more involved in mortgage-based securities which were increasingly based on "NINJA" or "liar" loans. Strangely, this book does not delve in the subject of these mortgages. No details on this topic! The closest the author comes to this subject is in talking about two hedge funds which were really a tiny part of the company.
Most of the book is regurgitation of contents of numerous interviews author conducted. Those interviewees do not reveal what was at the core of the progressively-rotten financial structure of the firm -- calling your assets a load of "funky s---" is not revealing -- and the author does not provide any over-arching narrative to fill-in the gaps nor digs deeply thru other means.
The book is undigested glob of not-so-pertinent information, with a lot of repetitions. It also seems rushed with glaring errors. For example, Ch. 11 is titled "New Development from Hell" but actually describe a windfall for Bear Stearns due to legal sloppiness of JPMorgan.
Don't go for this book. You will learn more, in much less time, by reading a few articles on the subject by journalists like Kate Kelly of WSJ.
Showing reviews 1-5 of 78
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