Financial Information
Bear-Trap: The Fall of Bear Stearns and the Panic of 2008
Bear, Stearns & Co., a storied Wall Street firm with a maverick reputation, had endured many crises in its 85-year history. Nothing, however, could have prepared the firm for the sudden death spiral that would lead to its takeover for a pittance. In a dramatic showdown with JP Morgan and the Fed, this is the tragic story of how fortunes were made and lost. Bill Bramber, a senior executive at Bear Stearns, had a bird’s eye view of just what happened inside Bear’s offices and on the trading floor that led to the most sensational financial crisis of our times.
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(out of 26 reviews)
List Price: $ 24.95
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#2 written by Loyd E. Eskildson 1 year ago
Review by Loyd E. Eskildson for Bear-Trap: The Fall of Bear Stearns and the Panic of 2008
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Bamber’s objectives are to be excuse Bear Stearns management for the firm’s collapse, while telling the story of its collapse. Unfortunately, he instead fills the book with irrelevant material and fails to accomplish either goal.Bamber contends a 3/10/2008 rumor that Bear Stearns was having liquidity problems started the downward spiral, this was acerbated by short-sellers, and that Treasury Secretary Paulson wanted Bear to fail in retribution for its failing to assist in the LTC bailout ten years prior. Only one week later the firm was negotiating its sale to J.P. Morgan for $2/share.
Bear Stearns, like many others, believed housing prices would continue to go upward, and loaded two of its hedge funds with leveraged AAA and AA tranches of mortgage-backed CDOs, with default insurance provided by CDS. (The leverage was acquired by pledging each layer of CDOs for new borrowing to finance the next layer.) On 7/31/2007 both funds filed for bankruptcy. The declining value of its CDO collateral forced Bear Stearns to unwind the two hedge funds.
Funding for purchasing CDOs came from other Wall Street Banks and their investors – this avoided conflict of interest, double-dipping of fees, and left Bear free of credit concerns. The company only had one person overseeing the $20 billion involved because Bear had little money tied up in them itself; Bamber alleges the problems would not have occurred absent the “Chinese Wall” that existed between the hedge funds and asset traders. (Makes no sense to me.) Both fund managers were charged with fraud – talking the funds up publicly, while dumping their own shares and disparaging them in internal e-mails.
How Bear Stearns got from its 7/31/2007 hedge fund bankruptcy declaration to its 3/17/2008 takeover is not discussed. Another void is the allegation that J.P. Morgan went from its original $2/share offer to $10/share because it assumed Bear’s obligations for a year – whether the deal went through or not. How this obligation was resolved is not covered either.
On an aside, readers do learn the Hank Paulson made $3.7 billion as a Goldman-Sachs fund manger in 2007 by betting the markets for home mortgages and CDOs would both decline. In a backdrop of such obscene profits it is impossible to feel sorry for any of the Bear Stearns principals in this tragedy.
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#3 written by read everything 1 year ago
Review by read everything for Bear-Trap: The Fall of Bear Stearns and the Panic of 2008
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Nothing new here. If one read the papers, he would be as informed as after finishing the book. Moreover, the author wants us to understand how intellectual he is by presenting historical facts which for the most part are irrelevant. And the whole discourse on being a “tragic hero” is just pitiful. I am not sure where the author is now, but I think he should stick to trading derivatives! -
#4 written by Donald M. Fraser 1 year ago
Review by Donald M. Fraser for Bear-Trap: The Fall of Bear Stearns and the Panic of 2008
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What I found interesting about this book is the complete lack of responsibility or culpability of a typical Wall Street trader in the financial collapse. Bill Bamber claims his firm was a “martyr for the sins of Wall Street” (chapter 10). That Bear Stearns was anything but a house of cards that employees were profiting handsomely off of while placing investor money at great risk is never made a case for. As the information has no depth other than any one else reading a newspaper would have, this book more supports that conclusion than refutes it.
I’d add that investors of Bear Stearns were also very poorly served by the firms employees, a group Bamber has very little sympathy for. Were the firm’s employees really the unwitting dupes portrayed or the wizards of Wall Street they would like to think of themselves as?
This book is also poorly edited and redundent, I slogged through it only to justify my review. -
#5 written by Robert Heller 1 year ago
Review by Robert Heller for Bear-Trap: The Fall of Bear Stearns and the Panic of 2008
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My previous one-star review of this book was removed by Amazon, along with another one written by a different reviewer. So keep in mind that AMZN actively removes some reviews.I am a former (long time ago) Bear employee. While I will give credit (and one star) for the author’s good explanations of Wall Street and some of the more exotic products, if you are looking for insight into the causes of the Bear collapse, you won’t find them here. Other reviewers have stated correctly that you would be better off reviewing newspaper coverage of the events to learn what happened.
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Review by Pejman Hamidi for Bear-Trap: The Fall of Bear Stearns and the Panic of 2008
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My heart goes out to everyone at Bear, and the author here was first to get a book on this topic off the press. Unfortunately, it was written from the perspective of an “unconnected observer” of the events, and therefore lacks any credibility regarding “providing an insiders account”. I got more info from reading the Financial Times than this book. It also shows the speed to rush this to the press because the number of typos in the book actually compelled me to return it to Amazon for a refund, aside from the fact that 80% of the way through the book, I still haven’t read a single thing worth my dime. Why did I give 2 starts instead of 1? Because this author got the book out first. That deserves some recognition.