Henry Paulson - On the Brink - Inside the Race to Stop the Collapse of the Global Financial System

LTCM: Long-Term Capital Management

MAC: material adverse change

MBS: mortgage-backed securities

MLEC: Master Liquidity Enhancement Conduit

NAV: net asset value

NEC: National Economic Council

OCC: Office of the Comptroller of the Currency

OFHEO: Office of Federal Housing Enterprise Oversight

OTC: over the counter

PDCF: Primary Dealer Credit Facility

PWG: President’s Working Group on Financial Markets

S&P 500: Standard & Poor’s 500 Index

SARS: severe acute respiratory syndrome

SEC: Securities and Exchange Commission

SED: Strategic Economic Dialogue

SIV: structured investment vehicle

TAF: Term Auction Facility

TALF: Term Asset-Backed Securities Loan Facility

TARP: Troubled Assets Relief Program

TIAA-CREF: Teachers Insurance and Annuity Association of America and College Retirement Equities Fund

TLGP: Temporary Liquidity Guarantee Program

TSLF: Term Securities Lending Facility

WaMu: Washington Mutual

Writing On the Brink required me not only to live through the crisis the first time, but also to live through it again. Both times I was aided by my team at Treasury, and by the White House staff. They dedicated an enormous amount of time to helping me remember and reconstruct events that took place at warp speed. We didn’t always have notes or paper to rely on, but I had many, many hours of help from Dan Jester, David Nason, Michele Davis, Kevin Fromer, Neel Kashkari, Bob Hoyt, Phill Swagel, David McCormick, Dan Price, Steve Shafran, Joel Kaplan, Josh Bolten, Jim Lambright, Jim Wilkinson, Ken Wilson, Bob Steel, Taiya Smith, Karthik Ramanathan, Jeremiah Norton, Keith Hennessey, and Christal West. My chief of staff, Lindsay Valdeon, who worked around the clock organizing much of our effort and sharing her sound judgment, deserves special praise. And I extend my thanks to my former boss, President George Bush, for his support on this project.

I was very fortunate to have as a collaborator Michael Carroll, formerly editor of Institutional Investor , whose understanding of finance and narrative helped my story come alive. His discipline, thoroughness, and talent were invaluable. He assembled a very able and dedicated team, including Deborah McClellan, Ruth Hamel, Katherine Ryder, and Will Blythe, who worked long hours to complete this book.

I am grateful to my attorney, Robert Barnett of Williams & Connolly, and my able editor, Rick Wolff, for their spot-on advice, steady support, and encouragement throughout the project. My thanks also to the Business Plus team, including Dorothea Halliday, Mark Steven Long, Tracy Martin, Harvey-Jane Kowal, Bob Castillo, Tom Whatley, Ellen Rosenblatt, Barbara Brown, Jimmy Franco, Rob Nissen, Deborah Wiseman, Susan Benson Gutentag, Lynn von Hassel, and Stephen Callahan.

FactSet Research Systems Inc. and Credit Market Analysis Ltd. provided us with market research. The assistance of Monica Boyer and David Wray was also helpful.

I thank Jessica Einhorn, dean at the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University, for bringing me to this great institution, which benefits from her strong leadership. I am appreciative of the fact-checking and research support I received from SAIS students and from Seth Colby.

And to my wife, Wendy, in particular, I extend my gratitude for her support throughout my tenure as Treasury secretary and for enduring what turned out to be an all-consuming eight-month project—the writing of this book.

Henry M. Paulson, Jr., served under President George W. Bush as the 74th secretary of the Treasury from July 2006 until January 2009. As Treasury secretary, Paulson was the president’s leading policy adviser on a broad range of domestic and international economic issues.

Before joining the Treasury Department, Paulson had a 32-year career at Goldman Sachs, serving as chairman and chief executive officer following the firm’s initial public offering in 1999. He is involved in a range of conservation and environmental initiatives, having served as chairman of the Peregrine Fund, chairman of the board of directors for the Nature Conservancy, and co-chairman of its Asia-Pacific Council.

Prior to joining Goldman Sachs, Paulson was a member of the White House Domestic Council, serving as staff assistant to the president from 1972 to 1973, and as staff assistant to the assistant secretary of Defense at the Pentagon from 1970 to 1972.

Paulson graduated from Dartmouth in 1968, where he majored in English and was a member of Phi Beta Kappa and an All-Ivy, All-East football player. He received an MBA from Harvard in 1970.