What is the drawback in keep using design pattern used in this javascript code

var fs = require('fs');
var fileName = 'README.txt';
fs.exists(fileName, function(exists) {
   if (!exists) {
      return console.error('File does not exist');
   }
   fs.stat(fileName, function(error, stats) {
   if (error) {
     return console.error(error);
   } else if (!stats.isFile()) {
     return console.error('Not a file');
   }
   fs.readFile(fileName, 'utf8', function(error, data) {
     if (error) {
       return console.error(error);
     }
     console.log(data);
   });
  });
});

The book i am reading point out "Callback Hell" as a drawback in this design pattern. I just get started with Node.js so it's a little bit difficult to grasp the idea.

can anyone explain it better ?