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

264 been on the phone with Tim Geithner and Hank Paulson twice about it: From Geithner’s calendar for Wednesday, September 10, 2008.

265 “Unless I’ve missed something”: Brian Blackstone, “Ex-Fed Official Poole: Fed Not Defining Post-Bailout World,” Dow Jones, September 10, 2008.

266 Any hope that the SpinCo plan was going to turn Lehman’s fortunes around: Susanne Craig, Randall Smith, Serena Ng, and Matthew Karnitschnig, “Lehman Faces Mounting Pressures,” Wall Street Journal, September 10, 2008.

267 announced his plans to “retire” from the firm: Mark Kleinman, “Jeremy Isaacs to Step Down at Lehman,” Daily Telegraph, September 7, 2008.

267 $5 million severance: Danny Fortson, “Five Lehman Chiefs Coop $100m Days Before Collapse,” Sunday Times (London), October 12, 2008.

267 “engage in detrimental activity”: From Exhibit A of Lehman’s “Termination Arrangements for Executives” in a section called “Restrictive Covenants.” Document was made public by the House Oversight and Government Reform Committee and is available online under “Materials for Lehman Brothers Compensation Meeting,” http://oversight.house.gov/story.asp?ID=2208.

269 pocketing some $540 million from an investment in Shinsei Bank: Matthew Miller, “Cash Kings,” Forbes, October 9, 2006.

269 town house on the Upper East Side for $53 million: Zachery Kouwe, “Sallie’s Suitor—Flowers’ Power: Art of the Deal,” New York Post, October 7, 2007.

270 Goldfield happened to be the banker depicted: Roger Lowenstein , When Genius Failed, 170-85.

270 Greenberg … bought millions of preferred shares: In June 2008, Lehman sold $6 billion in common and preferred shares to a group of investors, which included Hank Greenberg. Greenberg would not disclose how much he spent . Lavonne Kuykendall, “Greenberg: Lehman ‘A Great Franchise,’ Now Has Enough Capital,” Dow Jones, June 10, 2008.

270 “Management did not successfully put to rest”: Patrick M. Fitzgibbons, “Lehman in Sale Talks as Survival Questioned—Sources,” Reuters, September 11, 2008.

271 “The change in rating agency posture”: Alistair Barr,“Treasury, Fed Reportedly Helping as Deal Sought by This Weekend,” MarketWatch.com, September 11, 2008.

271 “He is as feisty as ever”: Louise Story, “Tough Fight for Chief at Lehman,” New York Times, September 11, 2008.

272 buy Chicago’s LaSalle Bank from ABN: “ABN AMRO Shareholders Vote in Favor of Sale, Breakup,” Dow Jones, April 26, 2007.

273 It is with deep regret: Letter obtained by author.

274 had just gotten off the phone with Geithner: The Wall Street Journal reported that Willumstad made his first call to Geithner on Thursday, but they didn’t actually speak on the phone until Friday morning. Author’s subsequent reporting places the phone conversation on Thursday morning. See Monica Langley, Deborah Solomon, and Matthew Karnitschnig, “Bad Bets and Cash Crunch Pushed Ailing AIG to Brink,” Wall Street Journal, September 18, 2008.

275 If the agency cut AIG’s credit rating by even one notch, it could trigger a collateral call of $10.5 billion: Greg Farrell, Aline van Duyn, and Nicole Bullock, “S&P in Warning after AIG Shares Plunge,” Financial Times, September 12, 2008.

274 The cost to insure the debt of AIG: Lilla Zuill, “AIG Woes Knock Its Market Value Below Peers,” Reuters, September 11, 2008.

274 Hank Greenberg, being deposed that day: In the midst of settling a Delaware shareholder suit for $115 million, Greenberg began his deposition with Andrew Cuomo for a civil fraud lawsuit, which would stretch over the next several days . Amir Efrati, “Greenberg Settles AIG Shareholder Case,” Wall Street Journal, September 12, 2008.

274 “What the hell are you people waiting for?”: James Bandler, “Hank ’s Last Stand,” Fortune, October 7, 2008.

275 If the agency cut AIG’s credit rating: Mary Williams Walsh and Jonathan D. Glater, “Investors Turn Gaze to A.I.G.,” New York Times, September 12, 2008

276 Texaco trucks and Eastern Airlines jets: Stephen Labaton, “Bankruptcy Bar: Never So Solvent,” New York Times, April 1, 1990.

276 he billed clients nearly $1,000 an hour: Jonathan D. Glater, “The Man Who Is Unwinding Lehman Brothers,” New York Times, December 14, 2008.

276 He had grown up in the Gravesend neighborhood of Brooklyn: Ibid.; Labaton, “Bankruptcy Bar,” New York Times .

277 “Bankruptcy,” he once said, “ is like dancing”: Ibid.

284 “Fuld is a friend. Try to help, but don’t bail Lehman out”: Paulson, On the Brink, 181.

286 “With a beleaguered Lehman”: Jessica Papini, “Possible Govt Backstop for Lehman Buy Has Two Prior Models,” Dow Jones, September 11, 2008.

287 “Federal officials currently”: Efrati, “Greenberg Settles,” Wall Street Journal .

287 “But while the Treasury Department”: Walsh and Glater, “Investors Turn Gaze to A.I.G.,” New York Times .

287 “At least in the Bear case”: “Lehman’s Fate,” Wall Street Journal, September 12, 2008.

288 “Source: There will be no government money”: Steve Liesman to David Faber, Faber Report, CNBC, September 12, 2008.

290 “Lehman is going down”: Susanne Craig, Jeffrey McCracken, Aaron Lucchetti, and Kate Kelly, “The Weekend that Wall Street Died,” Wall Street Journal, December 29, 2008.

290 “We’re not Lehman”: Ibid.

291 “concerns about AIG’s ability to shed”: “AIG Shares Fall 20 Percent On Mortgage Woes,” Reuters, September 12, 2008.

CHAPTER FOURTEEN

299 he had given her some $4,600 in donations: On February 21, 2007, Lloyd Blankfein made two contributions, of $2,300 each, to Hillary Clinton’s Presidential Campaign. See http://www.opensecrets.org.

300 after testifying at a hearing for the Committee on Energy and Natural Resources: “Summit to Consider How to Achieve a More Secure, Reliable, Sustainable, and Affordable Energy Future for the American People.” Friday, September 12, 2008.

302 BofA shares closed that day at $33.74: Bank of America rose $.68 or 2.1 percent, to $33.74 on Friday, September 12, 2008. “Finance Companies Shares Mixed at the Close of Trading,” Associated Press, September 12, 2008.

303 “a quality which, for lack of a better word, I can best describe as epic.” Christopher Gray, “Mix of Limestone and Sandstone, in Florentine Style,” New York Times , November 11, 2001.

303 a three-level vault: www.newyorkfed.org.

303 Emergency meeting at NY Fed: Evan Thomas and Michael Hirsh, “Paulson’s Complaint,” Newsweek, May 16, 2009.

305 “He is in denial,” Paulson continued: Author obtained notes from the emergency meeting at the New York Federal Reserve.

305 “There is no political will for a federal bailout”: Deborah Solomon, Dennis K. Berman, Susanne Craig, and Carrick Mollenkamp, “Ultimatum by Paulson Sparked Frantic End,” Wall Street Journal, September 15, 2008.

306 “I assume we are going to talk about AIG?”: Tett, Fool’s Gold , 233.

306 “Stop being such a jerk ”: Kate Kelly, “The Fall of Bear Stearns,” Wall Street Journal, May 29, 2008.

309 Fuld swallowed his pride and dialed Lewis’s home in Charlotte: According to the Wall Street Journal, Fuld placed the call to Lewis on the afternoon of Sunday, September 14, 2008. Subsequent reporting by the author has revealed that the call was actually made on the evening of Friday, September 12, 2008. See Susanne Craig, Jeffrey McCracken, Aaron Lucchetti, and Kate Kelly in “The Weekend That Wall Street Died,” Wall Street Journal, December 29, 2008.