After ripping through Too Big to Fail it seems natural to continue understanding the collapse of Bear Stearns with House of Cards: A Tale of Hubris and Wretched Excess on Wall Street to get a bit under the hood of how the collapse of Wall Street almost killed our economy. The book’s focus is the last two weeks of life at Bear Stearns.
Most would agree Bear Stearns was the “perfect storm” in hilighting whats wrong with Wall Street. Trusted executives who cannot lead their company or explain products they are selling.
Author William Cohan even points out as Bear Stearns was collapsing two executives were in Nashville playing in a bridge card game tournament.
I was rather amused that with their ‘tough guy’ reputation on Wall Street, in the end the executives at Bear Stearns, facing the closure of their firm were actually considering filing chapter 11 to force a major collapse of the Western financial marketplace.
Known as their “nuclear option” Bear Stearns actually considered triggering the collapse of the US economy because they were unable to secure their quickly falling stock price at an “acceptable” price during negotiations with the Federal Reserve and JPMorgan Chase in their final hours of operations. And in the end, many of those tough guys ended up crying at their desks.
Sadly this book reads like an intense thriller. Yet the truth reveals how Wall Street’s greed and “good ol-boy network” was too dumb to act in time to save the country from falling into a recession.