Inside the Bear Stearns boiler room

Inside the Bear Stearns boiler room
Exclusive book excerpt: Bestselling author William Cohan uncovers the inner workings of the misadventure that brought down Bear Stearns and foreshadowed the financial crisis to come.
By William D. Cohan Last Updated: March 3, 2009: 9:45 AM ET

NEW YORK (Fortune) -- Years from now, when academics search for causes of the stock market crash of 2008, they will focus on the pivotal role of mortgage-backed securities. These exotic financial instruments allowed a downturn in U.S. home prices to morph into a contagion that brought down Bear Stearns a year ago this month - and more recently have brought the global banking system to its knees.
What scholars should not miss is the role that the human element - call it greed or ignorance - played in this tragedy. In an exclusive excerpt from William Cohan's new book, "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street," to be published March 10 by Doubleday, the bestselling author sheds light on the bankers who thought they had mastered what Warren Buffett has called "financial weapons of mass destruction."


By looking back to the roots of the misadventure in which Bear Stearns traders Ralph Cioffi and Matthew Tannin lost roughly $1.6 billion while allegedly misleading investors, Cohan illustrates how the missteps of the few can have consequences for the many.

Business Books in the current business climate

What Makes a 'Best' Business Book?
A new compilation of the "best" business titles in management and other areas misses a chance to relate to today's troubled climate, says BusinessWeek's Hardy Green

Jack Covert and Todd Sattersten, authors of The 100 Best Business Books of All Time: What They Say, Why They Matter, and How They Can Help You (Portfolio, 2009). Almost every business-book reader will find a way to take exception to the Covert-Sattersten list.
The authors are both executives with Internet bookseller 800-CEO-READ, but they insist that their volume isn't just a come-on to stimulate sales for their business. "It's our attempt at helping the modern businessperson find solutions," says Covert.
Finance and economics titles would seem to be a natural, especially in today's troubled financial climate—but Covert and Sattersten include almost none. Guys, take a look at the current business best-seller lists, and you'll discover what readers are interested in now. Such titles as Charles R. Morris' The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash (Public Affairs, 2008), or Charles D. Ellis' The Partnership: The Making of Goldman Sachs (Penguin Press, 2008), or Paul Krugman's The Return of Depression Economics (Norton, 1999 and revised in 2009) are hot sellers this week. For an oldie but goodie, you could even include John Kenneth Galbraith's The Great Crash 1929 (Mariner Books, 1954), a paperback best-seller today.