I just finished reading the book House Of Cards: How Wall Street’s Gamblers Broke Capitalism by William D. Cohan. It’s basically the a fairly good back story on how Bear Stearns went under. Even though in another life I actually worked in the brokerage industry as a NASD Series 7 Registered Representative and briefly worked on a small firm’s trading desk I was at a complete loss to understand exactly how these mortgage backed securities created such a massive problem that they nearly brought down the entire financial system. Fortunately, Cohan breaks it all down with step by step events that caused this tidal wave.
I know some people are reading this and saying “Well, what does that have to do with poker?” Well, if you would quit interrupting I’ll tell you.
There are several mentions in the book about the top brass at Bear Stearns killing time playing online poker in his office. While the financial world is melting down the guy standing in the eye of the hurricane is making donk bets. No wonder the games seem to be getting tougher. You think you’re getting a guy to lay down an underpair with a semi-bluff on the flop when this guy is sitting on billions of dollars of toxic assets quickly becoming worthless?
Personally, I think this makes a good case for why the UIGEA was a good idea and why we we need stricter enforcement of gambling laws. If they would have arrested him and the other online poker playing Wall Street execs when they first started playing online poker we might have avoided this entire mess.
On the bright side, he did earn enough Full Tilt Points to get a cool jersey.