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21 Federal Reserve (press release), 16 September 2008 (9:00 p.m. EDT).The (up to) $85 billion AIG facility has a 24-month term and will accrue interest at three month Libor plus 850 basis points.

22 Miles Weiss, “Gross’s Fund Guaranteed $760 Million of AIG Debt Through Swaps,” Bloomberg News, 16 September 2008.

23 Caroline Baum, “No Limit to Greenspan’s Once-in-a-Century Events: Caroline Baum,” Bloomberg News, 18 August 2008.

24 Hugh Son and Eric Holm, “Fed Said to Reverse Stance, Consider AIG Loan Package,” Bloomberg News, 16 September 2008.

25 Nicholas Varchaver, “What Warren Thinks . . .,” Fortune, 28 April 2008, p. 62.

26 Benjamin Graham, The Intelligent Investor (New York: Harper & Row, 1973), 315, 316.

27 McSheehy and Hugh Son, “AIG Chief Sullivan Seeks to Ease Rules on Writedowns” Bloomberg News, 18 March 2008.

28 Ibid.

29 Warren Buffett,“Shareholders Letter,” Berkshire Hathaway 2002 Annual Report, 14.

30 Telos Demos, Nina Easton, Adam Lashinsky, Eugenia Levenson, Carol Loomis, Brian O’Keefe, Patricia Sellers, and David Stires, “Crisis Council,” Fortune, 3 September 2007. 60.

31 Division of Corporate Finance, “Sample Letter Sent to Public Companies on MD&A Disclosure Regarding the Application of SFAS 157 (Fair Value Measurements),” U.S. Securities and Exchange Commission, March 31, 2008, http://www.sec.gov/divisions/corpfin/guidance/fairvalueltr0308.htm. The letter concerned Management’s Discussion and Analysis for their upcoming quarterly reports on Form 10-Q. Excerpt: “Current market conditions may require you to use valuation models that require significant unobservable inputs for some of your assets and liabilities. As a consequence, as of January 1, 2008, you will classify these assets and liabilities as Level 3.”

32 Ibid.

33 Joyce Moullakis, “Merrill Says Level 3 Assets Jump 70% in First Quarter,” Bloomberg News, 6 May 2008.

34 Bradley Keoun, “Merrill to Pay Ex-Goldman Trader Montag $40 Million,” Bloomberg News, 2 May 2008. Thain compensated Montag for $50 million in equity awards he would leave behind. He also agreed to pay him a $39.4 year bonus for 2008, even though the announcement was made in May 2008. In addition, Montag would get a $600,000 salary for a total of $40 million.

35 Susanne Craig and Tom Lauricella, “Big Loss at Lehman Intensifies Crisis Jitters,” Wall Street Journal, 10 June 2008.

36 Ken Auletta, Greed and Glory on Wall Street: The Fall of the House of Lehman (New York: Random House, 1986), 158.

37 Ibid.

38 Ibid.

39 Jesse Westbrook, “SEC to Make Wall Street Banks Reveal Capital, Liquidity Levels,” Bloomberg News, 7 May 2008.

40 David Reilly and Karen Richardson, “For Financial Stocks, Is It Another False Bottom?” 16 Janaury 2008.

41 In a client note I observed that the difference between my numbers and Citi’s numbers are due to a combination of assumptions, and there is a lot of leeway in how one can account for structured products:“What’s a few billion anyway (except when one is trying to attract capital)? Since when do shareholders shrug off a 10% dilution in shareholder equity? It would be nice to have heard something along the lines of ‘We know what went wrong (and here it is. . . .), and we know exactly what to do about it (other than pass the hat).”

42 Lewis, Michael, “The Rise and Rise of Analyst Meredith Whitney,” Bloomberg News, 9 April 2008.

43 Yalman Onaran and Dave Pierson, “Banks’ Subprime Market-Related Losses 91 Capital Raised,” Bloomberg News, 16 October 2008.

44 David Enrich and Jenny Strasburg, “Citigroup to Close Hedge Fund; Blow to CEO,” Wall Street Journal, 12 June 2008; and Joyce Moullakis and Josh Fineman, “Citigroup Shuts Down Old Lane, Co-Founded by Pandit,” Bloomberg News, 12 June 2008.

45 David Einhorn, “Accounting Ingenuity,” remarks at the Ira W. Sohn Investment Research Conference, 21 May 2008. David Einhorn thought Lehman’s 1Q 2008 writedowns on its commercial mortgages were insufficient given the AAA commercial mortgage backed securities (CMBS) index