The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [366]
This bold, arresting stance stopped a brewing witch hunt in its tracks. The pitchforks went back into the barns. The employees went along accordingly. “It was a brilliant strategy,” said Eric Rosenfeld. “That was our marching order, and we marched.”
When Buffett got back to Salomon, he went after the details of the Sternlight letter; “he was livid,” according to board member Gedale Horowitz. “It compounded the felony. He was so angry because he hadn’t been told and the letter hadn’t been responded to.” Other than the Glauber meeting, the Sternlight letter was the most serious act of “information rationing.” Withholding it from the board had put them in the position of making a number of decisions in a state of ignorance about Corrigan’s expectations. Buffett’s and Munger’s attitudes toward prior management hardened. Now the real import of Munger’s term “thumb-sucking” became absolutely clear. “Thumb-sucking” meant ignoring the obvious until your diaper was full. Over a couple of weeks, said Munger, “We paid attention to our sovereign”—meaning the Treasury and the Federal Reserve—“and our views changed as our cognition improved.” As far as Gutfreund was concerned, “we had no option of forgiveness,”32 Buffett said.
Through these revelations, Buffett led Salomon with apparent equanimity and poise, while Maughan and a few employees dressed in hazmat suits made up the cleanup crew. But beneath his eggshell-smooth demeanor, he was roiling in turmoil. To keep himself from thinking about Salomon, he played an electronic game called Monty for hours at a time. He hated being away from Omaha. Gladys Kaiser noticed the lift in his step when he returned and the drag in his feet when he had to leave. She wanted to retire but stayed on temporarily because her boss was having such a terrible year.33 New York did not suit him any more than it had when he was young and working at Graham-Newman. He remained aloof, never appeared on the trading floor, and, as one senior manager noted, even a glimpse of him in the hallways at Salomon was “a rare sighting.” Susie came out to visit from San Francisco. Kay Graham arrived to play bridge and keep him company. Before long, he had set up a regular game with Carol Loomis, George Gillespie, and Ace Greenberg, the CEO of Bear Stearns. Bridge helped him relax because, when he played bridge, he couldn’t think about anything else. A couple of miles uptown, in his enormous Park Avenue apartment filled with a painstakingly assembled collection of art, his old friend Dan Cowin lay dying of cancer.
Buffett wasn’t sleeping. When in New York, he would call home at twelve-thirty a.m., since he had the special deal to get the Wall Street Journal early in Omaha, and have tomorrow’s news read to him over the phone.34 He listened on tenterhooks, fearing that something horrible would be published about Salomon. Often there was, but at least he knew it before the rest of the employees, some of whom were seeing even less of their own homes than he was of Omaha. They were working fourteen or more hours a day to hold the firm together in the face of repeated obstacles and humiliations. Salomon’s stock and bond salesmen called clients knowing their main task was to convince them that the firm was not going under. Investment-banking clients were canceling previously committed deals as fast as they could run out the door. British Telecom threw Salomon out of the landmark deal that Gutfreund had gone to London to save, a trip that had caused him to miss the phone call with Buffett in Reno that revealed the emerging scandal. Bankers trying to sell other business faced an almost impossible task, as competitors used the firm’s precarious status against it when Salomon vied against them in banking “bake-offs.”35
Other employees got field promotions