House of Cards
by
William D. Cohan
Sub-titled “A Tale of Hubris and Wretched Excess on Wall Street,” Cohan, a former Wall Street investment banker, chronicles in detail the history of Bear Stearns, founded in 1923 by Joseph Bear, Robert Stearns, and Harold Mayer, which was the first financial entity in the “house of cards” to fall.
Its ending words say it all: “We all [messed] up. Government. Rating agencies. Wall Street. Commercial banks. Regulators. Investors. Everybody,” reflected Alan Schwartz, Bear Stearns CEO.
by
William D. Cohan
Sub-titled “A Tale of Hubris and Wretched Excess on Wall Street,” Cohan, a former Wall Street investment banker, chronicles in detail the history of Bear Stearns, founded in 1923 by Joseph Bear, Robert Stearns, and Harold Mayer, which was the first financial entity in the “house of cards” to fall.
Its ending words say it all: “We all [messed] up. Government. Rating agencies. Wall Street. Commercial banks. Regulators. Investors. Everybody,” reflected Alan Schwartz, Bear Stearns CEO.
Esoteric in content, the best chapter is probably the Epilogue, titled “The Deluge,” which entails events after Bear Stearns was gone and Lehman Brothers filed bankruptcy. [It] “…unleashed a global deluge of economic misery: the $125 billion bailout of insurer AIG; Merrill Lynch sale to Bank of America; Washington Mutual failure; near failures of Wachovia and National City Bank and at least 19 other financial institutions nationwide; conversion of Goldman Sachs, Morgan Stanley and American Express into bank holding companies to stave off their demise; and Citigroup’s near incapacitation, once the world’s biggest, most valuable, and most powerful global financial services firm.”
On November 20, 2008, former Treasury Secretary Henry Paulson said, “Credit markets froze and banks reduced interbank lending,” which led to the famous (or infamous) $700 billion TARP (Troubled Asset Relief Program) legislation last fall.
The machinations and personalities that Cohan explains are sometimes difficult to follow, and the lack of specific dates adds to reading difficulty, but, overall, the book is an interesting expose’ of Wall Street people and activities, rating agencies, financial regulators, and the government’s roles.
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