Street Fighters: The Last 72 Hours of Bear Stearns, The Toughest Firm on Wall Street by Kate Kelly (Penguin Group, 2009) is a straight-forward look at the collapse and eventual bargain sale of one of the most powerful firms on Wall Street.
Kelly, a reporter for the Wall Street Journal and now a CNBC contributor, has access to the details of the story, from the main players at Bear Stearns and other major players in New York to the dealmakers in Washington.
The Fall of an Investment Firm
The story is told in mostly chronological order, starting on Thursday March 13, 2008. The markets were in turmoil, as many investment firms had taken positions that turned out to be too risky when things turned out badly.
Kelly takes us inside the meetings that ran all night Thursday, into Friday and over that fateful weekend, as the executives at Bear first struggled to find a way to make payroll and continue operations, and then to find a buyer that would at least keep the company and its 14,000 employees relatively intact.
The names of the principles read like a who’s who in finance for those familiar with CNBC and the banking industry. Jamie Dimon, Tim Geithner and Hank Paulson are prominently featured, and even Ben Bernanke makes an appearance, as the market reels and Bear’s stock price drops from $68 to under $10 in a matter of days.
Looking for a Moral in the Book
Kelly writes this as an impartial observer, unlike the more personal style of A Colossal Failure of Common Sense, by Lawrence G. McDonald and Patrick Robinson,
the story of the Lehman Brothers collapse.
There is little attempt to moralize in the book. Kelly makes the reader feel sympathy for the people, trapped in a difficult predicament, generally not of their own making. There are no villains in the story. And as the ending is not a happy one for most everyone, there are no heroes to be found, either; just regular people trying to make the best of a bad situation.
The story in the book is very similar to the movie “Margin Call” a fictional representation of similar events. It may be a bit more like the boardroom scene in “Wall Street 2” in the way it shows how self interest motivates people during the most difficult situations.
Street Fighters is an excellent read for those interested in how business really works, rather than the glamorized Hollywood version.
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