189 “There’s blood in the water, let’s go kill someone!”: According to a former Morgan Stanley trader, Frank Partnoy, from his book Fiasco, 99.
189 “I see that again, and you’re fired”: Michael Carroll, “Morgan Stanley’s Global Gamble,” Institutional Investor, March 1, 1995.
189 House Financial Services Committee hearing: “Systemic Risk and the Financial Markets” hearing, with witnesses Henry Paulson and Ben Bernanke, held on July 10, 8. See http://financialservices.house.gov/hearing/hr008.shtml.
189 “We’re going to need broader emergency authorities”: Ibid.
190 some confusion about tracking down Greenspan’s home phone number: First reported by Deborah Solomon, “The Fannie & Freddie Question—Treasury’s Paulson Struggles with the Mortgage Crisis,” Wall Street Journal, August 30, 2008.
191 “considering a plan to have the government take over”: Stephen Labaton and Steven R. Weisman, “U.S. Weighs Takeover Plan for Two Mortgage Giants,” New York Times, July 11, 2008.
191 It had already been a long morning for Paulson: Paulson’s calendar.
191 “Today our primary focus is supporting Fannie Mae”: Brendan Murray, “Paulson Backs Fannie, Freddie in Their ‘Current Form,’ ” Bloomberg News, July 11, 2008.
192 briefed Bush on the Fannie and Freddie situation: Later that morning, at the Department of Energy, Bush said: “I want to thank the members of my economic team for assembling here at the Department of Energy. Secretary Bodman, thank you for hosting us. First of all, Secretary Paulson came by this morning to brief me on the financial markets. Freddie Mac and Fannie Mae are very important institutions. You spent a fair amount of time discussing these institutions. He assured me that he and Ben Bernanke will be working this issue very hard.” Office of the Press Secretary, “President Bush Meets with Economic Team,” July 11, 2008, 11:38 a.m. EDT.
192 Paulson had a call with Sheila Bair: Verified from his calendar.
192 FDIC was about to seize IndyMac: On Friday, July 11, 2008, the Office of Thrift Supervision closed IndyMac Bank, F.S.B, with total assets of $32.01 billion, transferring its operations to the FDIC. “OTS Closes IndyMac Bank and Transfers Operations to FDIC,” July 11, 2008. See http://www.fdic.gov/news/news/press/2008/pr08056.html.
195 “We have a new kind of bank ”: James Surowiecki, “Too Dumb to Fail,” New Yorker, March 31, 2008.
195 “We’re giving serious consideration to becoming a bank holding company”: Fuld’s plea to become a bank holding company was first reported by Julie MacIntosh and Francesco Guerrera, “Lehman Failed to Convince Fed Officials over Survival Strategy,” Financial Times, October 6, 2008; and subsequently reported by Julie Creswell and Ben White, “The Guys from ‘Government Sachs,’ ” New York Times, October 19, 2008.
196 “As long as I am alive this firm will never be sold”: Susanne Craig, Jeffrey McCracken, Aaron Lucchetti, and Kate Kelly, “The Weekend That Wall Street Died,” Wall Street Journal, December 29, 2008.
196 he came close to buying Lazard: See Cohan, The Last Tycoons, 517-20.
196 About Greg Curclass="underline" Zachary R. Mider, “Lewis Turns to Tomato-Growing ‘Unknown Genius’ on Merrill Deal,” Bloomberg News, September 24, 2008.
197 “Okay, you can fight him”: Daniel S. Morrow, “Kenneth Lewis Oral History,” Computer-world Honors Program International Archives, May 3, 2004. See www.cwhonors.org/archives/histories/Lewis.pdf.
199 “No, we wouldn’t use our petty cash to buy an investment bank ”: Heidi N. Moore, “Ken Lewis Tells Investment Bankers All Is Forgiven,” WSJ Blog/Deal Journal, June 11, 2008.
200 Paulson, unshaven and wearing jeans, was pacing the halls and pestering his staff: This scene was first reported by Deborah Solomon, who quoted Wilkinson as saying: “[Y]ou need to leave us alone so we can do our jobs.” Author’s subsequent reporting revealed slightly different wording. See Deborah Solomon, “The Fannie & Freddie Question—Treasury’s Paulson Struggles with the Mortgage Crisis,” Wall Street Journal, August 30, 2008.
200 take a quick bike ride: Ibid.
201 “Fannie Mae and Freddie Mac play a central role”: “Paulson Announces GSE Initiatives,” press release, Department of the Treasury, July 13, 2008. See http://www.treas.gov/press/releases/hp1079.htm.
201 “Our proposal”: “Part I, Part II of a Hearing of the Senate Banking, Housing and Urban Affairs Committee,” Federal News Service, July 15, 2008.
203 SEC to begin cracking down on improper short selling: The SEC issued an emergency diktat to halt “unlawful manipulation through ‘naked ’ short selling,” which was set to start that Monday, July 21, 2008, and expire after thirty days. Kara Scannell and Jenny Strasburg, “SEC Moves to Curb Short-Selling,” Wall Street Journal, July 16, 2008.
204 Lehman’s board: Dennis K. Berman, “Where Was Lehman’s Board?” WSJ Blog/Deal Journal, September 15, 2008.
205 Ken Wilson was standing in line at Westchester County Airport: Susanne Craig, “In Ken Wilson, Paulson Gets Direction from the Go-To Banker of Wall Street,” Wall Street Journal, July 22, 2008.
206 On the evening of July 21, Paulson arrived for a dinner: From Paulson’s July calendar, with dinner scheduled from 6:45 to 8:30 p.m.
CHAPTER ELEVEN
209 “to conduct a thorough strategic”: “American International Group Names Robert B. Willumstad Chief Executive Officer,” transcript of an AIG board conference call, June 16, 2008.
210 reported $5.4 billion loss: Liam Pleven, “AIG Posts $5.4 Billion Loss as Housing Woes Continue,” Wall Street Journal, August 7, 2008.
210 Geithner had greeted him with his usual firm, athletic handshake: According to Geithner’s calendar, they were scheduled to meet from 9:30 to 10:30 a.m. on Tuesday, July 29, 2008.
212 Morgan Stanley would receive a token payment of $95,000: Aaron Lucchetti, “The Fannie-Freddie Takeover: Two Veterans Led Task for Morgan Stanley,” Wall Street Journal, September 8, 2008.
213 “Either investors are going to be massively diluted”: Al Yoon, “Freddie Posts 4th Straight Qtrly Loss, Slashes Dividend,” Reuters, August 6, 2008.
214 Freddie’s reported loss of $821 million: Ibid.
214 In the first week of August; On that Monday: These meetings took place on August 4 and 5.
214 Min Euoo Sung arrived in Manhattan from Seouclass="underline" Lehman’s “secret meetings” with K DB were reported by Henny Sender and Francesco Guerrera, “Lehman’s Secret Talks to Sell 50% Stake Stall,” Financial Times, August 20, 2008.
219 “In the event the slow erosion of confidence turns into a rout”: Donald Kohn’s e-mail to Ben Bernanke was released as part of the Report of the Examiner in the Chapter 11 proceedings of Lehman Brothers Holdings by Anton R. Valukas, chairman of Jenner & Block. See: http://lehmanreport.jenner.com/.
219 Fuld owned ninety-seven acres in the area: “Lehman Brothers CEO Is Local Land Baron,” Idaho Mountain Express, September 24, 2008.
221 “A bubble, once ‘pricked’ ”: Ben Bernanke and Mark Gertler, “Monetary Policy and Asset Price Volatility,” Federal Reserve Bank of Kansas City’s Economic Symposium, Jackson Hole, Wyoming, 1999. See http://www.kc.frb.org/Publicat/sympos/1999/S99gert.pdf.
221 “the Bernanke doctrine”: John Cassidy, “Anatomy of a Meltdown,” New Yorker, December 1, 2008.