House of Cards: A review

"House of Cards" by William D. Cohan has a very captive non-linear format. Cohan starts with the ten day crisis that faced Bear Stearns during the financial crisis. I remember when I started reading the book and I was telling my friends, "This book is intense! It starts off with Bear Stearns saying one day 'We have billions and billions of dollars' to ten days later 'We're gone.'" You get sucked in quickly with that initial story, but after that initial story the book slows down considerably.

The second part of the book is the Golden Age of Bear Stearns, and it tells the story of the three biggest players in Bear: Cy Lewis, Ace Greenberg, and Jimmy Cayne. One gets a feel as to how Bear was run and what the culture was like inside of it. Furthermore I found it amusing how Bear was able to have such a successful organization for so many years with the three above personalities under the same roof.

The third part is where the cracks in the dam start to show for Bear beginning with its hedge funds and eventually leading up to the ten day crisis. Again it is slow here but it puts into context the first part of the book, and anyone who wants to know how Bear collapsed should read this. The final part is an afterwords of sorts with a quick explanation of the Lehman Brothers, another investment bank sometimes called "a larger Bear Stearns," collapse and what happened to most of the Bear executives.

If there is one reason to read this book it is to learn from history. One of my favorite quotes is, "If there is one thing we learn from history it is that we learn nothing from history." "House of Cards" is full of lessons that one can take away from history so as to not repeat the same mistakes (Although I would argue they are going to happen again regardless of how much we know). Lessons such as, know your investments (a Warren Buffet rule), watch out for hubris (Shakespeare is big on this one), and be careful when you are playing with other people's money (OPM).

On a final note I am coming away with Ace Greenberg definition from this book: Poor, Smart, and Desire to be rich or PSD. Only reason I'll remember this is because I consider myself one of them; hey maybe I will start an investment bank! Mortgages look good, right?