159 BISTRO and JP Morgan: Gillian Tett, “The Dream Machine,” Financial Times, March 24, 2006; Jesse Eisinger, “The $58 Trillion Elephant in the Room,” Portfolio, November 2008.
159 “How could we possibly be doing so many deals?”: Brady Dennis and Robert O’Harrow Jr., “Downgrades and Downfall,” Washington Post, December 31, 2008.
160 “It is hard for us, without being flippant”: Ibid.
160 “does not rely on asset-backed commercial paper”: “American International Group Investor Meeting—Final,” Fair Disclosure Wire, December 5, 2007.
161 In 2007 one of its biggest clients, Goldman Sachs, demanded: Serena Ng, “Goldman Confirms $6 Billion AIG Bets,” Wall Street Journal, March 21, 2009.
161 “It means the market’s a little screwed up”: AIG investor meeting, Fair Disclosure Wire, December 5, 2007.
161 “We have, from time to time, gotten collateral calls from people”: Ibid.
162 Greenberg’s forced resignation, Spitzer’s criminal threat: According to the Wall Street Journal, Spitzer threatened AIG’s board with criminal charges unless it dismissed Greenberg. He was forced out as chairman and CEO on March 14, 2005. Spitzer filed a civil fraud suit against the firm in May, accusing AIG of “sham transactions.” James Freeman, “Eliot Spitzer and the Decline of AIG,” Wall Street Journal, May 16, 2008; Daniel Kadlec, “Down … But Not Out,” Time, June 20, 2005.
162 AIG’s $500 million boost: James Bandler, “Hank ’s Last Stand,” Fortune, October 13, 2008.
162 He immediately contacted PricewaterhouseCoopers: Theo Francis and Diya Gullapalli, “Insurance Hazard: Pricewaterhouse’s Squeeze Play,” Wall Street Journal, May 3, 2005.
164 consulting contract, at the rate of $1 million a month: Gretchen Morgenson, “Behind Biggest Insurer’s Crisis, a Blind Eye to a Web of Risk,” New York Times, September 28, 2008; Carrick Mollenkamp, Serena Ng, Liam Pleven, and Randall Smith, “Behind AIG’s Fall, Risk Models Failed to Pass Real-World Test,” Wall Street Journal, November 3, 2008.
164 a $7.8 billion loss: Liam Pleven, “AIG Posts Record Loss, As Crisis Continues Taking Toll,” Wall Street Journal, May 9, 2008.
164 International Lease Finance Corp. was pushing for a split: J. Lynn Lunsford and Liam Pleven, “AIG Leasing Unit Mulls Split-Up,” Wall Street Journal, May 12, 2008.
164 “I am as concerned as millions of other investors”: Liam Pleven and Randall Smith, “Financial Rebels with a Cause: AIG—Hank Greenberg, Who Built the Giant Insurer, Steps Up His Attack,” Wall Street Journal, May 13, 2008.
165 “steps that can be taken to improve”: Liam Pleven and Randall Smith, “Big Shareholders Rebel at AIG—Letter to the Board Cites Problems with Senior Management,” Wall Street Journal, June 9, 2008.
165 to meet with the three investors: Ibid. Francesco Guerrera and Julie MacIntosh, “AIG removes Sullivan as chief executive,” Financial Times, June 15, 2008.
165 The company had paid Manchester United $100 million: “Manchester United Signs Shirt Deal with American Insurance Giant,” Associated Press, April 6, 2006.
166 “AIG Offers Empathy, Little Else”: Liam Pleven and Randall Smith, “AIG Offers Empathy, Little Else—Some Shareholders Left Wanting More After Insurer’s Slips,” Wall Street Journal, May 15, 2008.
166 an additional $10 billion in new collateraclass="underline" Randall Smith, Amir Efrati, and Liam Pleven, “AIG Group Tied to Swaps Draws Focus of Probes,” Wall Street Journal, June 13, 2008; Liam Pleven, “AIG’s $5.4 Billion Loss Roils the Markets—Investors Impatient on New CEO’s Plan as Problems Attack the Complex Insurer,” Wall Street Journal, August 8, 2008.
167 The two men agreed to have dinner together: Liam Pleven, “Two Financial Titans Put on Best Face,” Wall Street Journal, June 17, 2008; Lilla Zuill, “New AIG Chief and Ex-CEO Greenberg Set to Meet Thursday,” Reuters, June 18, 2008.
CHAPTER NINE
168 Oil, most crucially, was going for $140 a barreclass="underline" A record for oil futures in Russia, this price was predicted to rise—and it did—hitting $147 in July. “Russia’s Crude Money Box,” International Securities Finance, June 26, 2008.
168 Russia was pumping out millions of barrels a day: The International Energy Agency said that as of June 11, 2008, Russia was producing 9.5 million barrels of oil per day. Jason Bush, “Prime Minister Putin Primes the Pump,” BusinessWeek, June 30, 2008.
169 who had coined the appellation for those four economies: Goldman’s chief economist Jim O’Neill, leading a team from the firm, created the acronym in 2001, when they were making growth predictions about the four emerging markets. See Dominic Elliott, “Fundamentals Drive the ‘BRIC’ Rebound,” Wall Street Journal, July 27, 2009.
169 defaulting on the nation’s debt: “On August 13, with dollars fleeing the country, its reserves dwindling, its budget overtapped, and the price of oil, its chief commodity, down 33 percent, the government imposed controls on the ruble.” Lowenstein, When Genius Failed, 140-45.
169 Long-Term Capital Management: Ibid.
169 “I really think we are a little better”: Bethany McLean, “The Man Who Must Keep Goldman Growing,” Fortune, March 17, 2008.
170 They had bet against something called the ABX Index: Chris Blackhurst, “The Credit Crunch Genius Who Masterminded a £2 billion Jackpot,” Evening Standard (London), December 18, 2007.
170 “I don’t speak Russian”: Ellis, The Partnership, 37.
170 Yeltsin’s new government named the firm its banking adviser: “Russia Hires Goldman Sachs as Adviser,” Washington Post, February 18, 1992.
170 Goldman pulled out of the country in 1994 but would eventually return: Joseph Kahn and Timothy L. O’Brien, “For Russia and Its U.S. Bankers, Match Wasn’t Made in Heaven,” New York Times, October 18, 1998.
170 Adolf Hitler had planned to hold his victory celebration there: Hitler had chosen Astoria’s Winter Garden ballroom for his victory ball, scheduled for November 7, 1941, but Germany’s summer invasion of the Soviet Union didn’t go as planned. Stacks of invitations were later discovered in Berlin’s Nazi headquarters after the war. Corinna Lothar, “Gem of the North—St. Petersburg Reclaims Its Glory as Russia’s ‘Window to the West,’ ” Washington Times, December 27, 2003.
172 short, fat, bearded guy who wore tube socks: Jenny Anderson, “Goldman Runs Risks, Reaps Rewards,” New York Times, June 10, 2007.
172 Blankfein’s beginnings: Neil Weinberg, “Sachs Appeal,” Forbes, January 29, 2007; Ellis, The Partnership, 669; Bethany McLean, “The Man Who Must Keep Goldman Growing,” Fortune, March 17, 2008; Susanne Craig, “How One Executive Reignited Goldman’s Appetite for Risk,” Wall Street Journal, May 5, 2004.
172 dating a Wellesley student from Kansas City, he took a summer job at Hallmark: Ellis, The Partnership, 707.
172 “If we don’t show up Monday it’s because we’ve hit the jackpot”: Craig, “How One Executive Reig nited,” Wall Street Journal, May 5, 2004.