377 sent out a note to his clients: “Analysts’ View 3—Lehman Files for Bankruptcy, Merrill to be Sold,” Reuters, September 15, 2008.
379 a mogul unto himself: Landon Thomas Jr., “Banker, Loan Maestro Jimmy Lee Switched Suspenders for Sweaters,” New York Observer, December 24, 2001.
379 finance some of the biggest deals in history: Ibid. Beginning in the late seventies at Chemical Bank, Lee raised hundreds of billions for companies on the brink, such as IBM, General Motors, Seagram, Nextel, and AT&T, to name a few. Robert Lenzner, “Jimmy’s List,” Forbes, April 17, 2000.
381 they were angry: Aleksandrs Rozens, “Death of an Era: Within the Span of Several Days, Wall Street Loses Two Titans,” Investment Dealers Digest, September 22, 2008.
381 Wall of Shame: Ibid.; McDonald and Robinson, A Colossal Failure of Common Sense, 317.
381 “Dumb and Dumber,” “Voting in Braille Only”: Ibid.
382 Geithner’s phone conference with Dimon, Blankfein: According to Geithner’s calendar, the call was scheduled from 10:00 to 10:15 a.m. that Monday.
383 relatively uneventful press conference of Bank of America and Merrill Lynch: A press release on Bank of America’s Web site early Monday morning announced the merger with Merrill Lynch, and also that Lewis and Thain would be hosting a press conference at 10:00 a.m. in the auditorium at Bank of America’s New York City headquarters. See http://www.bankofamerica.com/merrill/.
384 formally agreed to allow AIG to use some of its regulated insurance company assets: In a press conference at noon on Monday, September 15, New York governor Paterson said that he had given Eric Dinallo “authorization, such that AIG can access $20 billion of its assets through its subsidiaries for the purpose of posting these assets as collateral to provide liquid cash in order to run the day-to-day operations of the parent company.” States News Service, “Transcript: Governor Paterson Press Conference on AIG—September 15, 2008,” September 15, 2008.
385 Geithner called and told him he should be at this meeting instead: Paterson thanked Dinallo in his speech, acknowledging that he was presently meeting with Federal Reserve officials.
385 to discuss the fate of the insurers Ambac and MBIA: Susanne Craig and Liam Pleven, “Credit Crunch: Good Plan, but Who Will Pay?” Wall Street Journal, January 30, 2008.
388 “I hope you all had an enjoyable weekend”: Paulson’s comments to the press, and their questions, were taken from transcripts released by the White House. “White House Conducts Press Briefing, Sept. 15,” 1:42 p.m. EDT. US Fed News, September 15, 2008.
392 “It is oddly reassuring that the Treasury Department … let Lehman Brothers fail”: “Wall Street Casualties,” New York Times, September 16, 2008.
393 “Stocks Plunge as Crisis Intensifies”: Glenn Kessler and David S. Hilzenrath, “Stocks Plunge as Crisis Intensifies; AIG at Risk; $700 Billion in Shareholder Value Vanishes,” Washington Post, September 16, 2008.
393 The Dow Jones Industrial Average had slumped 504.48 points: The Dow dropped 504.5 points on Monday. Alex Berenson, “Wall St.’s Turmoil Sends Stocks Reeling,” New York Times, September 16, 2008.
396 Fed had kept Lehman’s broker-dealer in the United States open: According to Lehman’s official press release issued that Monday, the company was “exploring the sale of its broker-dealer operations” and its subsidiaries, including Neuberger Berman, LLC, and Lehman Brothers Asset Management, would “not be subject to the bankruptcy case of its parent.” See http://www.lehman.com/press/pdf_2008/091508_lbhi_Chapter11_announce.pdf.
397 as was the case with Ramius Capitaclass="underline" Cassell Bryan-Low, “Crisis on Wall Street: Funds Assess Lehman (Gulp!) Exposure,” Wall Street Journal, September 26, 2008.
397 he presided over the FOMC meeting at the Federal Reserve in Washington: The meeting was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, September 16, 2008 at 8:30 a.m. See http://www.federalreserve.gov/FOMC.
397 Federal Reserve Act, Section 13, point 3: www.federalreserve.gov/aboutthefed/section13.htm.
398 “regulatory capital relief ”: From AIG’s 10-Q filing, August 6, 2008: “Approximately $307 billion of the $441 billion in notional exposure on AIGFP’s super senior credit default swap portfolio as of June 30, 2008, was written to facilitate regulatory capital relief for financial institutions primarily in Europe.”
398 AIG’s vast insurance empire: A “strictly confidential ” AIG presentation draft, dated February 26, 2009, entitled, “AIG: Is the Risk Systemic?” states that “AIG has written more than 81 million life insurance policies to individuals worldwide” at a face value of $1.9 trillion, with more than $12 billion in claims paid in 2008.
400 he knew the top people in the industry: Susanne Craig, “In Ken Wilson, Paulson Gets Direction From the Go-To Banker of Wall Street,” Wall Street Journal, July 22, 2008.
400 telling the press that he planned to mount a proxy contest: “Hank Greenberg: Plans Fight for Control or Buyout of AIG,” Dow Jones Newswires, September 16, 2008.
400 Dear Bob: The full text of Hank Greenberg’s letter to Robert Willumstad, dated September 16, 2008, can be viewed online at http://online.wsj.com/public/resources/documents/AIG09162008.pdf.
403 He and Ben Bernanke had scheduled a meeting with President Bush: According to the Wall Street Journal, this meeting took place at 3:30 p.m. See Monica Langley, Deborah Solomon, and Matthew Karnitschnig, “Bad Bets and Cash Crunch Pushed Ailing AIG to Brink,” Wall Street Journal, September 18, 2008.
404 “Well, you finally get your chance”: Richard Beattie’s remarks to Robert Willumstad, as first reported in Fortune magazine. James Bandler, “Hank ’s Last Stand,” Fortune, October 7, 2008.
404 the government was taking a large ownership stake—79.9 percent: Matthew Karnitschnig, Deborah Solomon, Liam Pleven, and Jon E. Hilsenrath, “U.S. to Take Over AIG in $85 Billion Bailout,” Wall Street Journal, September 16, 2008.
404 “Paulson is handling this the same way he did Fannie, Freddie, and Bear”: Monica Langley, Deborah Solomon and Matthew Karnitschnig, “Bad Bets and Cash Crunch,” Wall Street Journal, September 18, 2008.
404 the London Interbank offered rate: Known as LIBOR, this is the average interest rate charged when banks borrow unsecured funds from one another, whether it’s an overnight or a long-term loan. In the United States, LIBOR maturities used in pricing loans most commonly include one, three, six, and twelve months. On Wednesday, September 17, 2008, the three-month LIBOR jumped 19 basis points, to 3.0625 percent, its biggest jump since September 1999. Lisa Twaronite, “Three-Month Libor Marks Biggest Jump in Nine Years,” MarketWatch. com, September 17, 2008.
406 “I won’t be working for the federal government”: Willumstad, as quoted in Bandler, “Hank’s Last Stand,” Fortune.
407 a Maine insurer that had fought off an effort by Allstate: Laura Jereski, “We Understand Risk ” (UNUM Corp.), Forbes, March 20, 1989.
407 AIG had invested $1.35 billion in Blackstone: Peter Truell, “AIG Will Put $1.35 Billion into Blackstone,” New York Times, July 31, 1998.
407 Greenberg’s office on Park Avenue: A year after his ouster from AIG in 2005, Greenberg relocated his office to the seventeenth floor of Citigroup’s headquarters, at 399 Park Avenue. See Diane Brady, “Hank at War,” BusinessWeek, March 27, 2006.