JPMorgan Chase

House of Cards

PUBLISHED : Sunday, 30 May, 2010, 12:00am
UPDATED : Sunday, 30 May, 2010, 12:00am

House of Cards
by William Cohan
Penguin, HK$143

Readers who pick up House of Cards should already be familiar with the Bear Stearns story. They may be in the same world of investment banking. Perhaps they just followed the news. There's more to the tale, however, as William Cohan shows in his detail-packed follow-up to his 2007 book about Lazard Freres & Company. He recounts the last days of 85-year-old Bear Stearns in thrilling detail, from when suspicions about its problems emerged - that it had huge inventories of mortgage-backed securities and the rate of default was growing while the value of the collateral was falling - to when they spread through the company's message board, to when lenders stopped extending overnight funding, to its forced sale at a bargain. On March 6, 2008, someone posted the message: 'Funding costs surging. Way overleveraged - 33 to 1 ... Bear ... is insolvent!!!' By Part II (Why It Happened), readers will be hooked and keen to know more about bridge-playing Jimmy Cayne, chief executive until January 2008, and his role in the company's demise, which heralded the start of the global economic meltdown. Blow-by-blow reporting can be boring. This book is anything but.