Kemper's Reviews > House of Cards: A Tale of Hubris and Wretched Excess on Wall Street

After I read Too Big to Fail, I just hadn’t gotten enough stories about greedy assholes so I figured I‘d read this to angry up my blood some more.

Actually, Too Big to Fail began after the Bear Stearns meltdown so even though there was some background there, I felt like I hadn’t gotten the whole story so I picked this up to try and complete the picture. The two books dovetail nicely with this one concentrating on the history of Bear Stearns and how it became the warning alarm that something bad was coming when it started circling the drain and had to be bought out by a joint deal between JP Morgan and the federal government.

It’s got kind of an odd structure in that the first third of the book details the collapse of the firm, and then the rest of the book gives the entire history of the company and how they got to that point. I get that Cohan wanted to lead with the disaster part everyone was interested in, but by saving the details on the history of the major players until the history in the rest of the book, you don’t really understand who the players were or the internal politics at play while they’re all scrambling around.

It’s a well documented book that gives you a pretty good idea of how a firm once known for being fairly conservative and one of the best at risk management became the first major domino to fall in the 2008 financial collapse. It mainly seems like the leadership of the firm, particularly CEO Jimmy Cayne, became far more concerned with bridge tournaments and playing golf than running an investment bank.

One of the things that made me scratch my head the most was the story of Ralph Cioffi. Considered a dynamic salesman but with no patience or head for details, Cioffi convinced Bear’s leadership to let him launch a couple of supposedly conservative hedge funds. At first, the funds did well before 2008 while Cioffi’s monthly statements always stressed that he was predicting a lot of future issues in the sub-prime mortgage market and that the fund had less than 6% of those types of investments while he prepared to make a fortune off the coming crisis. What this guy actually did was continue to buy sub-primes until they made up 60% of the funds while telling everyone that disaster was coming to anyone holding the exact shit he was buying at the same time. WTF?

I guess that’s why I’ll never be rich. I just don’t understand high finance.

Anyhow, of the two books, I’d say that Too Big To Fail gave a better and more complete picture of what happened during the meltdown, but people interested in the subject or Wall Street shenanigans will probably find this well worth their time, too.