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

“Yeah, but I was supposed to meet another couple and my wife, and they’ve been sitting here for the last two hours,” Thain replied.

“At least I called,” Black said with a laugh.

As Thain went inside, Black returned to the conference call. “You’re never going to believe who I just ran into …”

At Lehman’s headquarters, a stunned and livid Dick Fuld had just gotten off the phone with Bart McDade, who had the unenviable task of informing the CEO that a meeting had been held down at the Fed about his company, and that he hadn’t been invited.

Rodgin Cohen had been notified by the Fed to instruct McDade to bring a team down to the Fed on Saturday morning—and had explicitly warned him not to bring Fuld, explaining, “The Fed doesn’t want him down there.”

Trying to soften the blow, McDade prevaricated: He told Fuld that there would be a lot of grunt work to do downtown, and that his time would be better spent manning the office so that he could remain in constant contact with the regulators and his CEO brethren. What he didn’t relay to Fuld, of course, was that they would all be together at the Fed in person.

As he ended the call with McDade, Fuld had another reason to be furious when he realized that he hadn’t heard back from Ken Lewis all day, and it was already past 9:00 p.m. Bank of America’s diligence teams over at Sullivan & Cromwell had left hours earlier, and from what he had heard, their body language suggested they weren’t leaving just for the night.

“I can’t believe that goddamn son of a bitch won’t return my call,” Fuld complained to Russo. Fuld had phoned him at least a half dozen times, sometimes not leaving a voice mail for fear of seeming desperate. He thought Lewis had practically shook his hand over the phone just twenty-four hours earlier; where the hell had he gone?

Enough was enough. Fuld swallowed his pride and dialed Lewis’s home in Charlotte.

Lewis’s wife, Donna, picked up in the kitchen.

“Is Ken there?” Fuld asked.

“Who is it?”

“Dick Fuld.”

There was a long pause as Donna looked over at her husband, who was sitting in the living room. When she mouthed Fuld is on the line, Lewis shook his finger, signaling to her to duck the call.

Donna felt uncomfortable, but she had had plenty of experience in dodging unwanted callers for her husband.

“You really have to stop calling,” she said sympathetically to Fuld. “Ken isn’t coming to the phone.”

Crestfallen, Fuld replied, “I’m really sorry to have bothered you.”

Fuld placed the phone down and put both hands on his head.

“So, I’m the schmuck,” he shouted at nobody in particular.

Harvey Miller, Lehman’s bankruptcy lawyer, walked into Weil Gotshal’s conference room just down the hall from his office and told the associates to go home and have dinner. It was getting late, and he hadn’t heard anything new from anyone at Lehman. This is just a fire drill, he thought. Lehman Brothers isn’t going to have to file.

Miller hopped into a cab to his apartment on Fifth Avenue. As he opened the door, his cell phone rang. James Bromley, a lawyer with Cleary Gottlieb Steen & Hamilton, which was advising the New York Fed, asked almost matter-of-factly, “Harvey, are there any plans for a bankruptcy?”

Miller was taken aback. “It’s not the objective; it’s not in the forecast,” he replied decisively. “There certainly isn’t any intensive work being done on it. I’m at home. I can tell you that right now the company really believes it’s going to get a deal.”

“Are you sure?” Bromley persisted.

Miller related how the New York Fed had not seemed very worried during a presentation by one of his associates earlier that day.

Bromley, uncertain what to make of this news, muttered, “Err, maybe we should meet again tomorrow morning,” and hung up.

As Miller headed into the living room, he said to his wife, Ruth, bewilderedly, “I just got the strangest call …”

Back at AIG, Willumstad was still searching for a quick fix. He and Braunstein decided to try Warren Buffett one last time. Perhaps they could sell him some assets—anything, really—that he might want in his portfolio. Buffett had already left the office, but his assistant patched the call through to his home, the same home he had purchased in 1958 for $31,500.

“You said you’d be interested in assets. Anything in particular?” Willumstad asked, after greeting him and explaining the purpose of his call.

Buffett, reticent, offered, “Well, we could be interested in the auto business.”

“Would you be interested in taking all of the U.S. property and casualty business?” Willumstad suggested. That was a major piece of the company, representing $40 billion in annual revenue.

“What’s it worth?” Buffett asked.

“We’d say $25 billion; you’d probably say $20 billion,” Willumstad replied. “What information do you need to do that?”

When Buffett told him to send what he could, Willumstad said, “Okay. Give us an hour and we’ll get a package of material together. Where can we e-mail it?”

Buffett let out a loud laugh and informed him that he didn’t use e-mail.

“Can I fax it to you?” Willumstad asked.

“I don’t have a fax machine here,” Buffett said, still chuckling. “Why don’t you fax it to the office. I’ll go get in my car and drive back down to the office and pick it up.”

An hour later, Buffett was back on the phone, politely rejecting the proposal: “It’s too big a deal; $25 billion is too big.” Willumstad never thought he’d hear Buffett call any prospective deal too big.

“I’d have to use all my cash and can’t do anything to jeopardize Berkshire’s triple-A rating,” Buffett explained. For a moment, he alluded to the possibility of raising the money, but then acknowledged that he “didn’t want to have that kind of debt on my balance sheet.”

“Okay, thanks a lot,” Willumstad said. “But, by the way, if there’s anything else in the pool that you’re interested in, let us know.”

Merrill’s Greg Fleming was tossing and turning in bed that night, so much so that his wife, Melissa, finally insisted that he tell her what was bothering him. “It’s Friday night, and you’re not sleeping,” she mumbled. Wide awake, he turned to her. “This is a different kind of Friday night. The next week or so in this industry is going be epic.”

After nodding off briefly, Fleming finally rose at 4:30 a.m., his mind racing. He recalled his conversation of the night before with John Finnegan, his closest confidant on Merrill’s board. Finnegan was clearly as anxious as Fleming about the firm’s mounting problems, and they agreed they had to persuade Thain to seek a deal with Ken Lewis.

“You’ve got to push this, Greg,” Finnegan urged him. “There’s a way to get this done.”