Sunday, May 17, 2009

Book: House of Cards: A Tale of Hubris and Wretched Excess on Wall Street by William . Cohan

Today I was browsing through the new book table at Barnes & Noble near Lincoln Center and was fairly captivated by the level of detail about the run-up to the current financial crisis in House of Cards: A Tale of Hubris and Wretched Excess on Wall Street by William D. Cohan. I leafed through the book and found a lot of fascinating information about what was going on at Bear Stearns, whose former building is pictured on the cover:

At 480 pages, this is not a light read, but I doubt that you could claim to really know what was going on in the run-up to the crisis without digesting the contents of this book.

How could Bear Stearns go from having $17 billion in cash to being insolvent almost overnight? Of course, we now know that liquidity is not the same as solvency and that "toxic" assets can cause liquidity of a bank to drain at warp speed.

I have not read the book other than a few pages here and there, but it definitely seems worth taking a look at.

This book is "a chilling cautionary tale about greed, arrogance, and stupidity in the financial world."

Alas, even the collapse of the Bear Stearns house of cards was not the final straw. We had to wait for Lehman Brothers to implode before the camel's back was completely broken and the last remaining cards came tumbling down. Still, if more people had a clearer view of what happened at Bear, maybe Lehman could have been saved and the rest of the financial system spared a brutal shock. Maybe, or maybe not.

-- Jack Krupansky

2 Comments:

At 8:20 PM EDT , Anonymous Anonymous said...

What about "Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street"

 
At 8:29 PM EDT , Anonymous Jack Krupansky said...

Also fascinating, but that last 72 hours never would have happened if the house of cards had never been built.

The fall of the house and the building of the house are both worthy of study.

-- Jack Krupansky

 

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