344 Merrill ’s market capitalization: According to Standard & Poor’s, Merrill’s market capitalization for Friday, September 12, 2008, was $26.1 billion. “Five Facts About Merrill Lynch and Bank of America,” Reuters, September 14, 2008.
345 “It looks like we may have the outlines of a deal around the financing”: William D. Cohan, “Three Days,” Fortune.
345 tapped out a message on his BlackBerry to Michael Gelband: A version of this anecdote was reported by Steve Fishman, “Burning Down His House,” New York, December 8, 2008.
345 McCarthy, meanwhile, in London …: Nick Mathiason, “Three Weeks That Changed the World,” The Observer, December 28, 2008.
347 FSA’s refusal to waive shareholder-approval requirements: As reported by Bloomberg, Barclays spokesman Leigh Bruce said: “The only reason it didn’t happen is that there was no guarantee from the U.S. government, and a technical stock-exchange rule required prior shareholder approval for us to make a similar guarantee ourselves. We didn’t have that approval, so it wasn’t possible for us to do the deal. No U.K. bank could have done it. It was a technical rule that could not be overcome.” John Helyar and Yalman Onaran, “Fuld Sought Buffett Offer He Refused as Lehman Sank,” Bloomberg, November 10, 2008.
349 editorial in the Sunday Telegraph: Mark Keinman, “Barclays Should Be Wary of the Gorilla in Its Midst,” Sunday Telegraph, (London), Sep 14, 2008.
351 “We lost the patient”: James. B. Stewart, “Eight Days: The Battle to Save the Financial System,” The New Yorker, September 21, 2009.
353 “What if the system collapses?”: Paulson, On the Brink, 215. Paulson rarely publically ack nowledges his faith nor his most intimate conversations with his wife. This anecdote, as described by him in his memoir, was perhaps the most revealing he has ever been about his religion and his emotional state that weekend.
352 “Those of you who do not want to assist a Barclays deal”: Author received notes from this meeting, with Paulson’s remarks dictated, as well as Geithner’s proposal to create a $100 billion emergency fund for the three remaining investment banks.
353 Thain had had coffee with Ken Lewis that morning: Referenced by Craig, McCracken, Lucchetti, and Kelly in “The Weekend that Wall Street Died,” Wall Street Journal, December 29, 2008.
354 “Couldn’t have gone more poorly”: Diamond’s e-mail exchange read to author.
355 “We’ve got a good deal in hand ”: Greg Fleming’s words to Peter Kraus were first reported in the Wall Street Journal and differ slightly from the author’s subsequent reporting. According to the WSJ, Fleming said: “We have a great deal in hand, and need to finish doing this deal.” Susanne Craig, Jeffrey McCracken, Aaron Lucchetti, and Kate Kelly, “The Weekend That Wall Street Died,” Wall Street Journal, December 29, 2008.
356 together they had prepared an offer for the company: Zachary R. Mider and Erik Holm, “Allianz, Flowers Said to Have Bid for AIG Before Fed Takeover,” Bloomberg, September 17, 2008.
356 The company’s actual market value on Friday had been about $31 billion: “With a market value of $31 billion on Friday, based on an intraday low of $11.49, it now trails some other insurers, including AXA SA. The shares slipped further after the closing bell, following a warning from Standard & Poor’s that it may cut AIG’s ratings.” Lilla Zuill, “AIG Could Hold Investor Call as Soon as Mon,” Reuters, September 12, 2008.
357 “I don’t approve of ”: Dr. Paul Achleitner of Allianz denies having made these comments. However, several eyewitnesses confirmed that these were the words he used.
358 Dannhauser grabbed three senior partners: Ben Hallman, “A Moment’s Notice for Lehman,” American Lawyer, December 16, 2008.
359 Roberts took a call from a partner: Ibid.
359 “You don’t understand the consequences”: Ibid.
362 “All trades conducted will be done”: Author obtained copy of Fed memo.
362 “The extraordinary trading session held today”: Jennifer Ablan, “Pimco’s Gross Sees Tsunami of Risk if Lehman Fails,” Reuters, September 14, 2008.
363 “a group of global commercial and investment banks”: From Morgan Stanley press release, issued September 14, 2008.
364 He had received bids for it on Friday from two separate private-equity firms, Bain Capital and TPG: Christine Williamson, “Walker Rises from Ashes of Lehman Brothers Firestorm,” Pensions & Investments, October 13, 2008.
365 Diamond ’s cell phone rang: First reported by Aleksandrs Rozens, “Who Dares Wins; Barclays’ Diamond Leads Team to Snare One of Wall Street’s Most Storied Investment Banks,” Investment Dealers Digest, January 19, 2009.
369 Thomas Cruikshank, who had led the oil services company Halliburton: Cruikshank served as the chairman and CEO of Houston-based Halliburton from 1989 to 1995, after which Dick Cheney assumed his position. He had been on Lehman’s board of directors for twelve years when the company filed for bankruptcy. Hillary Durgin, “Halliburton—On the Offensive,” Houston Chronicle, October 5, 1997.
370 Known as “Dr. Doom”: Karen Pennar, “Dr. Doom and Dr. Gloom Are Still Prescribing Caution,” BusinessWeek, October 17, 1988.
370 “providing only tepid oversight”: From a speech Kaufman gave at a conference in Philadelphia in April 2008. “Credit Crisis a ‘Global Calamity’—Kaufman,” Reuters, April 18, 2008.
371 Mayor Michael Bloomberg: Azi Paybarah, “Bloomberg and Schwarzenegger (and Sheekey?) Together Again,” New York Observer, January 16, 2008.
372 “My goodness. I’ve been in the business”: Andrew Ross Sorkin, Jenny Anderson, and Eric Dash, “A Buyer for Merrill,” New York Times, September 16, 2008.
372 “Words cannot express the sadness”: Carrick Mollenkamp, Susanne Craig, Jeffrey McCracken, and Jon Hilsenrath, “The Two Faces of Lehman’s Fall,” Wall Street Journal, October 6, 2008.
372 $5.8 billion in “incentive compensation”: A complaint later filed by the SEC against Bank of America revealed that the bank had “contractually authorized ” Merrill to pay billions in discretionary bonuses—not to exceed $5.8 billion—to its employees. SEC press release, “SEC Charges Bank of America for Failing to Disclose Merrill Lynch Bonus Payments,” Washington, D.C., August 3, 2009. See http://www.sec.gov/news/press/2009/2009-177.htm.
373 “BAC Update”: http://online.wsj.com/public/resources/documents/FedbofaDocs.pdf.
374 “fairness opinion”: Zachary R. Mider, “Lewis Turns to Tomato-Growing ‘Unknown Genius’ on Merrill Deal,” Bloomberg, September 24, 2008.
374 Flowers and Fox-Pitt would earn a combined $20 million: From Bank of America’s SEC filing .
CHAPTER SIXTEEN
376 “CRISIS ON WALL STREET AS LEHMAN TOTTERS”: Carrick Mollenkamp, Susanne Craig, Serena Ng, and Aaron Lucchetti, “Crisis on Wall Street as Lehman Totters, Merrill Is Sold, AIG Seeks to Raise Cash,” Wall Street Journal, September 15, 2008.
376 Lehman formally filed for bankruptcy at exactly 1:45 that morning: Legal documents show that Lehman filed a voluntary petition under Chapter 11 with the United States Bankruptcy Court for the Southern District of New York on Monday morning at 1:45 a.m. See www.lehman-docket.com; Peg Brickley, “Lehman Makes It Official in Overnight Chapter 11 Filing,” Wall Street Journal, September 15, 2008.
376 “Everybody’s prepared this time”: Annelena Lobb, “A Chaotic Sunday Opens Wall Street’s Week,” Wall Street Journal, September 15, 2008.