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

65 the annual salary of the New York Fed president: The Fed chairman’s salary in 2008 was $191,300. http://www.federalreserve.gov/generalinfo/faq/faqbog.htm.

65 “These changes appear to have made the financial system”: Geithner, from his “Remarks at the Global Association of Risk Professionals 7th Annual Risk Management Convention & Exhibition in New York City, February 28, 2006.” http://www.ny.frb.org/newsevents/speeches/2006/gei060228.html.

66 his deputy, Steel, would be there in his place: “I very much appreciate the opportunity to appear before you today to represent Secretary Paulson and the U.S. Treasury Department,” Steel said on April 3, 2008. “As you know, Secretary Paulson is on a long-scheduled trip to China.” Steel’s full speech is available at http://www.ustreas.gov/press/releases/hp904.htm.

67 underwriting more than 40 percent of all mortgages: Bethany McLean, “Fannie Mae’s Last Stand,” Vanity Fair , February 2009; Carol D. Leonnig, “How HUD Mortgage Policy Fed the Crisis,” Washington Post , June 10, 2008.

67 “Their securities move like water”: Justin Fox, “Hank Paulson,” Time, August 11, 2008.

67 The two men had known each other since 1976: Brendan Murray and John Brinsley, “Paulson’s Surrogate Steel Sees ‘Initial’ Progress in Markets,” Bloomberg News, March 19, 2008.

67 Steel came from a modest background: Rick Rothacker, Stella M. Hopk ins, and Christina Rexrode, “Wachovia’s New CEO Is Pro in Crisis Control,” Charlotte Observer , July 13, 2008.

69 “Was this a justified rescue” : Dodd’s question as well as succeeding statements from Bernanke, Steel, and Geithner are taken directly from official Fed transcripts from the first half of the hearing. See “Panel I of a Hearing of the Senate Banking, Housing and Urban Affairs Committee,” Federal News Service, April 3, 2008.

71 “Buying a house is not the same as buying a house on fire”: When asked about the logic behind Bear’s $2-a-share price, Dimon said: “I tell people that buying a house is not the same as buying a house on fire.” “Panel II of a Hearing of the Senate Banking, Housing and Urban Affairs Committee,” Federal News Service, April 3, 2008.

71 cancel the office’s newspaper subscriptions to cut costs: Dimon “obsesses over spending at the granular level,” so much so that he once told a vice president, who was listing the company’s print subscriptions, “You’re a businessman; pay for your own Wall Street Journal. ” See Ken Kurson, “Jamie Dimon Wants Respect,” Money, February 2002.

71 “has suddenly become the most talked about”: Eric Dash, “Rallying the House of Morgan,” New York Times, March 18, 2008.

71 “quickly becoming Wall Street’s banker of last resort”: Robin Sidel, “In a Crisis, It’s Dimon Once Again,” Wall Street Journal, March 17, 2008.

71 “All hail Jamie Dimon!” Andrew Bary, “The Deal—Rhymes With Steal—of a Lifetime,” Barron’s , March 24, 2008.

72 “I want to be rich”: Leah Nathans Spiro, “Ticker Tape in the Genes,” BusinessWeek , October 21, 1996.

72 “I think you’re wrong!” Shawn Tully, “In This Corner! The Contender,” Fortune, March 29, 2006.

73 which his mother showed to Weill: Leah Nathans Spiro, “Smith Barney’s Whiz K id,” BusinessWeek, October 21, 1996.

73 “Can I show it to people here?” As Monica Langley reported: “Sandy liked the paper enough that he sent Jamie a note: ‘Terrific paper. Can I show it to people here?’ ” Langley, Tearing Down the Walls, 50.

73 “I won’t pay you as much ”: Ibid., 74 .

73 “Jews are going to take over American Express!”: Ibid., 71.

73 watching Weill sleep off his martini lunches: Ibid., 103.

73 the $1.65 billion acquisition of Primerica: Robert J. Cole, “2 Leading Financiers Will Merge Companies in $1.65 Billion Deal,” New York Times, August 30, 1988.

74 A $1.2 billion purchase of Shearson: Dana Wechsler Linden, “Deputy Dog Becomes Top Dog,” Forbes, October 25, 1993.

74 “You’re a fucking asshole!”: Langley, Tearing Down the Walls , 201.

74 $4 billion deal for Travelers: Greg Steinmetz, “Primerica, Travelers Seal Merger Pact; Takeover May Speed Insurer’s Recovery,” Wall Street Journal, September 24, 1993.

74 “Promote her”: Langley, Tearing Down the Walls , 241 .

74 “Now we can be father and daughter again”: Ibid., 254.

74 the $83 billion merger with Citicorp: Announced as a $70-billion merger Monday morning, by the day’s end Travelers had soared 18 percent and Citicorp 27 percent, bringing the merger’s value up to $83 billion. Langley, Tearing Down the Walls , 289-93. Michael Siconolfi, “Citicorp, Travelers Group to Combine in Biggest-Ever Merger,” Wall Street Journal, April 7, 1998.

75 “It’s bad enough how you treat me”: Langley, Tearing Down the Walls , 314.

75 “Don’t you ever turn your back on me while I’m talking!”: Roger Lowenstein, “Alone at the Top,” New York Times Magazine , August 27, 2000.

75 summoned Dimon to the corporate compound in Armonk: Timothy L. O’Brien and Peter Truell, “Downfall of a Peacemaker,” New York Times, November 3, 1998.

76 the Internet retailer Amazon: Duff McDonald, “The Heist,” New York , March 24, 2008.

76 Dimon brought in his own team of expense cutters: Shawn Tully, “In This Corner! The Contender,” Fortune, March 29, 2006.

76 “fortress balance sheet”: Jamie Dimon representing JP Morgan Chase at the Credit Suisse Group Financial Services Forum, February 7, 2008.

77 celebrating his fifty-second birthday over dinner: A listair Barr, “Dimon Steers J.P. Morgan Through Financial Storm,” MarketWatch.com, December 4, 2008.

78 “This wasn’t a negotiating posture”: “Panel II of a Hearing of the Senate Banking, Housing and Urban Affairs Committee,” Federal News Service, April 3, 2008.

78 “I am very troubled by the failure of Bear Stearns”: “Panel I of a Hearing of the Senate Banking, Housing and Urban Affairs Committee,” Federal News Service, April 3, 2008.

CHAPTER FOUR

79 private dinner to mark the end of a G7 summit: Treasury provided a list of dinner attendees to the press that Friday. Lehman’s Fuld was listed alphabetically between Larry Fink of BlackRock and John Mack of Morgan Stanley. “Attendees for G7 Outreach Dinner with Banks,” Reuters, April 11, 2008.

79 it would raise $4 billion: Jenny Anderson, “Trying to Quell Rumors of Trouble, Lehman Raises $4 Billion,” New York Times, April 2, 2008.

79 “We’re closer to the end than the beginning”: Joseph A. Giannone, “Goldman CEO Says Credit Crisis in Later Stages,” Reuters, April 10, 2008.

81 a new IMF Report: International Monetary Fund, “Global Financial Stability Report,” April 2008, 50.

81 staggering amount of leverage—the amount of debt to equity: “At the end of the first quarter in 2008, the leverage ratios at Morgan Stanley, Lehman Brothers, Merrill Lynch, and Goldman Sachs were 31.8, 30.7, 27.5, and 26.9, respectively, compared with an average of 8.8 for all U.S. commercial banks and savings institutions.” Senate Joint Economic Committee, “Financial Meltdown and Policy Response,” September 2008.

81 “Isn’t there something you can do to order us not to take all of these risks?”: Paulson, On the Brink, 70.

82 “You are all bright people”: Paulson, On the Brink, 130.

82 “Just finished the Paulson dinner”: “Hearing on Causes and Effects of the Lehman Brothers Bank ruptcy,” House of Representatives Committee on Oversight and Government, October 6, 2008. See http://oversight.house.gov/story.asp?ID=2208.