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

47 Corzine had tears in his eyes: Ellis, The Partnership , 609-13.

47 trading debut in a $3.66 billion offering: On May 4, 1999, after a seven-month delay, Goldman went public—selling an oversubscribed 69 million shares for $53 each—and officially ending its 130 years as a private partnership. “Goldman Sachs Shares Soar in Long-Awaited Trading Debut,” Dow Jones, May 4, 1999.

48 a $4.3 million home: Marc Gunther, “Paulson to the Rescue,” Fortune, September 29, 2008.

48 oversaw a department of 112,000: Ibid.

49 refurbishment of the building’s basement gym: Gunther, “Paulson to the Rescue,” Fortune .

49 “When there is a lot of dry tinder”: Paulson used similar language in an interview he later did with 60 Minutes correspondent Scott Pelley: “You know, we are about due for some kind of market turbulence,” he told the news program. “I didn’t expect quite this. But I said to the team, as we worked, ‘You never know, when there’s a lot of dry tinder out there, you never know what spark is gonna light the tinder.’ ” 60 Minutes, CBS News transcripts, September 28, 2008.

49 “We have these periods every six, eight, ten years”: Daniel Gross, “The Captain of the Street,” Newsweek, September 29, 2008.

49 “wind-down authorities”: At a September hearing on U.S. credit markets, Paulson said, “We were not left with the authorities we needed fully to protect the system and the taxpayer, because we have wind-down authorities, where the insurance or, you know, savings depositors, FDIC insurance—in 75 years, you know, we haven’t had a saver with FDIC insurance lose a penny.” See “Senate Committee on Banking, Housing and Urban Affairs Holds Hearing on U.S. Credit Markets,” Congressional Quarterly transcripts wire, September 23, 2008.

54 Good Housekeeping Seal of Approval: John Helyar and Yalman Onaran, “Fuld Sought Buffett Offer He Refused as Lehman Sank,” Bloomberg News, November 10, 2008.

CHAPTER THREE

58 an agitated Timothy F. Geithner took the escalator: Geithner’s plane left LaGuardia Airport at 7:00 p.m., arriving in D.C. at approximately 8:20 p.m. on Wednesday, April 2, 2008. Geithner’s daily schedules at the New York Fed can be viewed online at the New York Times Web site. See http://documents.nytimes.com/geithner-schedule-newyork-fed#p=1.

59 “The most important risk is systemic”: “Testimony Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Washington, D.C,” April 3, 2008. See http://www.newyorkfed.org/newsevents/speeches/2008/gei080403.html.

59 the $29 billion government backstop: A week after the deal, J.P. Morgan agreed to cover $1 billion of Bear Stearns’ losses, lowering the Fed’s backstop to $29 billion. Robin Sidel and Kate Kelly, “J.P. Morgan Quintuples Bid to Seal Bear Deal,” Wall Street Journal, March 25, 2008.

59 comparing the Bear rescue unfavorably: “I have reached a certain age where I can remember quite a few things, and there are some resemblances between the present situation, I’m afraid, and the early 1970s,” said Paul Volcker, in a speech to the Economic Club of New York on April 8, 2008. See http://econclubny.org/files/Transcript_Volcker_April_2008.pdf.

59 “Ford to City: Drop Dead ”: On October 30, 1975, this New York Daily News headline appeared on the front page, a day after President Gerald Ford said publicly that there would be no federal bailouts for a near bank rupt New York. Ford later lamented that he had never actually used the words “drop dead ” in his speech. Sam Roberts, “Infamous ‘Drop Dead’ Was Never Said by Ford,” New York Times, December 28, 2006.

61 after announcing a record loss: On Sunday, November 4, 2007, Citigroup held an emergency board meeting, which revealed that there could be up to $11 billion in additional subprime write-downs. Later that day Citi installed Robert Rubin as chairman and released this statement from Prince: “It is my judgment that given the size of the recent losses in our mortgage-backed securities business, the only honorable course for me to take as chief executive officer is to step down. This is what I advised the board.” Jonathan Stempel and Dan Wilchins, “Citigroup CEO Prince Expected to Resign,” Reuters, November 4, 2007; Tomoeh Murakami Tse, “Citigroup CEO Resigns,” Washington Post , November 5, 2007.

61 “I’m not the right choice”: Jo Becker and Gretchen Morgenson, “Member and Overseer of Finance Club,” New York Times, April 27, 2009.

61 making $398,200 a year: Geithner’s salary in 2008 has been reported as being $411,200, but this figure also includes the first two weeks of 2009. Scott Lanman, “Geithner Nomination Takes Top Fed Wall Street Liaison,” Bloomberg News, November 24, 2008; Robert Schmidt, “Geithner Takes Salary Cut to Run Treasury, Gets Fed Severance,” Bloomberg News, January 27, 2008.

61 his monthly $80 haircut: Joseph Berger, “Suddenly, There’s a Celebrity Next Door,” New York Times, January 2, 2009.

62 punctuating his sentences with “fuck”: “A Reassuring Figure for Treasur y,” The Economist , November 22, 2008.

62 “He’s twelve years old!”: Robert Rubin recalled Pete Peterson telling him this after meeting Timothy Geithner. Peterson, when later asked about the comment, only remembered saying that Geithner looked young. Greg Ip, “Geithner’s Balancing Act—The Fed’s Go-to Man for Financial Crises Takes on Hedge Funds,” Wall Street Journal, February 20, 2007.

62 summoning the chief executives: Lowenstein, When Genius Failed , 216; Victoria Thieberger, “Fed’s McDonough a Cool Head in Financial Storms,” Reuters, January 16, 2003.

63 Geithner’s beginnings: Gary Weiss, “The Man Who Saved (or Got Suckered by) Wall Street,” Condé Nast Portfolio , June 2008; Yalman Onaran and Michael McKee, “In Geithner We Trust Eludes Treasury as Market Fails to Recover,” Bloomberg News, February 25, 2009; Daniel Gross, “The Un-Paulson,” Slate, November 21, 2008.

63 published a number of incendiary stories: Peter S. Canellos, “Conservatives Sour on ‘Rebel Media,’ ” Boston Globe , April 19, 2007.

63 Geithner played conciliator: Onaran and McKee, “In Geithner We Trust,” Bloomberg News.

63 recommendation from the dean at Johns Hopkins: George Packard, then dean of Johns Hopkins, recommended Geithner to Brent Scowcroft, then vice chairman of Kissinger Associates, which led to his research job . Deepak Gopinath, “New York Fed’s Geithner Hones Skills for Wall Street,” Bloomberg Markets, April 22, 2004.

63 a very favorable impression on the former secretary of state: “He doesn’t try to walk into a room and take it over,” K issinger once said about Geithner. “He prevails with the power of his arg ument.” Candace Taylor, “Quiet NY Fed Chief Makes Loud Moves,” New York Sun, March 31, 2008.

64 “The Committee to Save the World ”: Time ’s headline for its February 15, 1999, cover, which featured the faces of Treasury secretary Robert Rubin, Fed chairman Alan Greenspan, and Treasury deputy Larry Summers.

64 On Thanksgiving Day, Geithner called Summers: Jon Hilsenrath and Deborah Solomon, “Longtime Crisis Manager Pleases Wall Street, Mystifies Some Democrats,” Wall Street Journal, November 22, 2008.

65 “Tim’s controlled, consistent, with very good ground strokes”: Onaran and McKee, “In Geithner We Trust,” Bloomberg News.

65 New York Fed is the only one whose president is a permanent member: “The Federal Open Market Committee includes seven members of the Board of Governors and five Reserve Bank presidents. While the president of the Federal Reserve Bank of New York serves on a continuous basis, the other 11 Reserve presidents serve rotating one-year terms beginning January 1 of each year.” http://www.federalreserve.gov/FOMC/.