A little more than a year ago, the fabled investment banking house of Bear Stearns was one of the pillars not only of Wall Street, but also of the global economy, widely admired for its daring innovations in managing and marketing new generations of asset-backed securities.
Today, to the extent Bear is remembered at all, it is for its collapse and forced sale to JPMorgan Chase, the first rock to fall in the risk management avalanche that triggered the current global financial crisis. As a reporter for the Wall Street Journal, Kate Kelly was the best of the financial journalists covering Bears' once-unthinkable descent into oblivion. Her admirably detailed three-part narrative of the firm's ultimate failure and dissolution was an important source for another account of the debacle, William D. Cohan's "House of Cards," which was published in March.
In "Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street," Kelly has elected to undertake an hour-by-hour reconstruction of the three days in March of 2008 when Bear Stearns first realized it was collapsing, fought to save itself and, ultimately, agreed to a humiliating sale to JPMorgan. It overstates nothing to call Kelly's book brilliantly reported, and her narrative is grippingly propulsive and peopled with fascinatingly drawn characters. Notable among them are Bear's Hamlet-like CEO, Alan Schwartz, who wept in line at the nearby Starbucks on the morning he had to announce the sale, and Jimmy Cayne, the erratic and wildly eccentric cigar-smoking chairman, whose real passions appear to have been bridge and golf. There are terrific walk-on appearances by Warren Buffett; Bear's legendary ex-chairman, Ace Greenberg; Lloyd Blankfein (the Goldman Sachs honcho); and Chris Flowers, the engaging private equity investor who made a spirited run at Bear.
Kelly's meticulous reporting amply demonstrates that the locus of Bear Stearns' fundamental problems derived from the unique interplay of its distinctive internal culture with the deeply flawed and, often, unfortunately idiosyncratic men who ran the place in those last years. The result seemed to be an institution that -- at all levels -- was quick to display bare knuckles to the outside world, while behind its own closed doors a lot of sharp elbows were swinging. Perhaps the most telling of the interlocking portraits Kelly sketches so well is that of Bear's upper echelons, where executives were fiercely territorial and oddly inattentive to even critical operational questions. Bear Stearns was, in the end, an institution where denial was the executive suites' emotion of first resort.
