Andrew Sorkin - Too Big to Fail - The Inside Story of How Wall Street and Washington Fought to Save the FinancialSystem--and Themselves

29 people inside Lehman referred to as a “Joeicide”: Fishman, “Burning Down His House,” New York .

29 “People need broad experience”: Ibid.

29 Callan history, early career: Susanne Craig, “Lehman’s Straight Shooter,” Wall Street Journal , May 17, 2008.

30 “Would it be weird for someone like to me to work on Wall Street?”: From a profile of Callan in NYU Law School’s alumni newsletter, “Erin Callan, ’90: Chief Financial Officer, Lehman Brothers Holdings Inc.,” April 2008. See http://www.law.nyu.edu/alumni/almo/pastalmos/20072008almos/erincallanapril/index.htm

30 Citadel Investment Group, she orchestrated the sale of $500 million worth of five-year bonds: Pierre Paulden, “Rainmakers—Alpha Female,” Institutional Investor , June 2007.

31 her personal shopper at Bergdorf Goodman: Craig, “Lehman’s Straight Shooter,” Wall Street Journal .

31 negotiations to buy her dream home: According to New York City housing records, Callan signed both her deed and mortgage on April 16, 2008. Lysandra Ohrstrom, “15 CPW Alert! Lehman Lady Lands $6.5 M. Pad,” New York Observer, April 25, 2008.

31 15 Central Park West: James Quinn, “Sting Rubs Shoulders with Giants of Finance at $2bn Apartments,” Daily Telegraph (London), February 2, 2008; Christina S. N. Lewis, “Private Properties,” Wall Street Journal, October 3, 2008.

31 borrow $5 million to pay for the $6.48 million space: According to New York City housing records she took out a $5 million mortgage. Also see DealBook, “Lehman’s C.F.O. Checks into 15 C.P.W.,” New York Times, April 29, 2008.

31 “I don’t want to make too much of words”: Matt Lauer interview with Treasury secretary Henry Paulson, Today, NBC, March 18, 2008.

32 quoting from the front page of the Wall Street Journal : Robin Sidel, Greg Ip, Michael M. Phillips, and Kate Kelly, “The Week That Shook Wall Street,” Wall Street Journal, March 18, 2008.

33 Goldman, Lehman first-quarter earnings: Jenny A nderson, “Swinging Between Optimism and Dread on Wall Street,” New York Times, March 19, 2008.

33 “Lehman kind of confounded the doomsayers”: “Lehman Lifts Mood, and So Does Goldman,” International Herald Tribune , March 19, 2008.

33 “all in all solid”: Susanne Craig and David Reilly, “Goldman, Lehman Earnings: Good Comes from the Bad,” Wall Street Journal , March 19, 2008.

34 “There’s no question the last few days”: Callan, from transcripts of the Lehman Conference Call: Lehman Brothers Holdings Inc. (LEH) F1Q08 Earnings Call, March 18, 2008.

34 “You did a great job, Erin”: Ibid.

35 The stock would end the day up: Anderson, “Swinging Between Optimism and Dread,” New York Times ; Rob Curran, “Lehman Surges 46% As Brokers Rally Back,” Wall Street Journal , March 19, 2008.

35 “The only complaint I have”: Patricia Sellers, “The Fall of a Wall Street Highflier,” Fortune, March 8, 2010.

35 she slapped him a high five: Curran, “Lehman Surges 46%,” Wall Street Journal .

35 “I still don’t believe any of these numbers”: Alejandro Lazo and David Cho, “Financial Stocks Lead Wall Street Turnabout,” Washington Post , March 19, 2008.

CHAPTER TWO

36 “That makes me want to vomit!”: A version of this story was previously reported by Kelly, Street Fighters, 204 .

36 raise the price to $10: Kate Kelly, “The Fall of Bear Stearns: Bear Stearns Neared Collapse Twice in Frenzied Last Days,” Wall Street Journal, May 29, 2008.

37 “I could see something nominal, like one or two dollars per share”: Kelly, Street Fighters, 205 .

37 government’s offer to backstop $29 billion of Bear’s debt: A week later, to limit exposure, the Fed revised its offer to $29 billion. See Robin Sidel and Kate Kelly, “J.P. Morgan Quintuples Bid to Seal Bear Deal,” Wall Street Journal, March 25, 2008.

37 Bear’s shareholders and employees had practically revolted: Ibid.

37 “This isn’t a shotgun marriage”: Moldaver, as reported by Kelly, “The Fall of Bear Stearns,” Wall Street Journal .

38 “All these years of deregulation by the Republicans”: Maura Reynolds and Janet Hook, “Critics Say Bush Is Out of Touch on the Economy,” Los Angeles Times, March 18, 2008.

38 Paulson advising Bush on his Economic Club speech: Kelly, Street Fighters , 34.

39 “You may need a bailout, as bad as that sounds”: Ibid.

39 worked in the Nixon White House: In 1972, after two years as a Pentagon aide, Paulson assisted John Ehrlichman, Nixon’s domestic policy chief, who would later be jailed for his role in Watergate. See “The Quiet Ascendancy of Hank Paulson,” Institutional Investor , July 1, 1998.

39 “I will get down here and”: David Cho, “A Skeptical Outsider Becomes Bush’s ‘Wartime General,’ ” Washington Post , November 19, 2008.

39 pushing especially hard for Paulson: See Fred Barnes , “Bolten’s White House: And Why Hank Paulson, the Former Goldman Sachs Chief, Is the New Treasury Secretary,” International Economy .

40 had been a “pioneer” for Bush: Landon Thomas Jr., “Paulson Comes Full Circle,” New York Times, May 31, 2006; Terence Hunt, “Treasury Secretary Snow Resigns, Replaced by Goldman Sachs Chairman Henry M. Paulson,” Associated Press, May 30, 2006.

40 “You started with Nixon”: Paulson, On the Brink, 19.

40 “This is a failed administration”: Ellis , The Partnership , 662.

40 “I love my job”: Susanne Craig, “Boss Talk: Goldman CEO Tackles Critics, Touchy Issues,” Wall Street Journal, April 26, 2006.

41 “Fear is the fountain of sickness”: Eddy, Science and Health , 391-92.

42 He demanded assurances, in writing: Cho, “A Skeptical Outsider,” Washington Post .

42 same status in the cabinet as Defense and State: Deborah Solomon, “Bush Taps Paulson as Treasury Chief—Goldman CEO Is Promised More Power Than Snow,” Wall Street Journal, May 31, 2006.

42 “As a prudential matter, I will not participate”: From the six-page “Ethics Agreement of Henry M Paulson Jr.,” dated June 19, 2008.

42 some 3.23 million shares: “Paulson to Sell His Goldman Shares,” Bloomberg News, June 22, 2006.

44 “Given how [Hank] moved from a low-ranking position”: Valerie Shanley, “Profile: Hank Paulson,” Sunday Tribune (Dublin), September 14, 2008.

45 Goldman Sachs was in turmoil: “Goldman Seeking Capital Investment; Firm Beset by Falling Profits, Departing Partners,” Bloomberg, September 16, 1994.

46 “Hank, nothing could please me more”: Ellis, The Partnership, 541.

46 cutting expenses by 25 percent: Emily Thornton, “Wall Street’s Lone Ranger,” BusinessWeek , March 4, 2002.

46 became co-chief executive in June 1998: Paulson was named Goldman’s co-chief executive and co-chairman on June 1, 1998—less than two weeks before Goldman voted to go public. “Goldman Sachs Promotes Paulson, Takes Step Toward Public Offering,” Dow Jones, June 1, 1998.

46 $300 million as part of a Wall Street bailout of Long-Term Capital: Lowenstein, When Genius Failed, 215.

46 Goldman pulling its IPO: Patrick McGeehan, “Goldman Shelves Plan to Go Public—Unsettled Markets Cited as Chief Cause,” Wall Street Journal, September 29, 1998.

46 retired from Goldman’s powerful executive committee: At the end of October, Goldman announced that Zuckerberg would retire at the end of its fiscal year (November). Anita Raghavan, “Zuckerberg, Goldman’s Vice Chairman, to Retire as the Guard Changes at Firm,” Wall Street Journal, October 23, 1998.