The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [368]
A Teutonic old-school prosecutor with a love of the law and a deep respect for the history and traditions of the U.S. Attorney’s office, Obermaier had been trying to figure out what to do with the fiasco that had landed in his lap. He recognized its unique nature. “This is no assault case on the New York subways,” he said. Indeed, he had been calling Jerry Corrigan “alarmingly often” to learn the ins and outs of the Treasury bond market: the difference between two-year notes and thirty-year bonds, the frequency of auctions, and how they were conducted.45
Sitting in a little conference room facing Obermaier, Buffett did most of the talking. He worked very hard to convey what he had said so many times, that if the firm were indicted, it could not survive. Obermaier made comparisons, however, to a case involving Chrysler, which had survived prosecution.46 The difference between a firm that sold hard assets and a firm that bought and sold nothing more than promises on pieces of paper was initially not clear. Buffett tried to get past the image of onion-burger-tossing slobs inspired by Liar’s Poker and invoked the innocent rank-and-file who would lose their jobs if Salomon went down. He promised that he would not sell his Salomon stock anytime soon and that his people would continue to run the place. He conveyed the sweeping nature of the cultural changes taking place inside the firm. This made an impression on Obermaier, but he kept a poker face. He had many other factors to consider.47 The Salomon team went back across town with no idea whether they had succeeded or failed.
By midwinter, Salomon’s status as a primary dealer remained unresolved. The firm still lacked the right to trade for clients, and the Treasury Department could undo the whole deal at any moment. Under threat of corporate criminal indictment, Buffett and Maughan labored to prove the firm worthy of saving. Buffett had run a full-page ad in the Wall Street Journal explaining the firm’s new standards.48
“I said that we would have people to match our principles, rather than the reverse. But I found out that wasn’t so easy.”
Day after day, Buffett bore down, shocked by the lavish lifestyle that was taken for granted on Wall Street. The executive dining room’s kitchen, as large as that of any restaurant in New York, was run by a head chef trained at the Culinary Institute of America and staffed by a pastry chef, a sous-chef, and a number of under-chefs. Employees could order “anything on earth they wanted” for lunch.49 In his first days in New York, Buffett received a letter from the head of another bank, inviting him to lunch so their chefs could do battle. Buffett’s idea of testing his chef’s skills was ordering a hamburger for lunch every single day.
The frustrated chef created batch after batch of handmade potato chips. He peeled the potatoes into cylinders sized to the millimeter, sliced them gossamer-thin, and whisked them into fresh sizzling oil until crisped just so. The perfect potato chips lay heaped in a pyramid alongside the daily hamburger on Buffett’s plate. He ate them absentmindedly, daydreaming of McDonald’s french fries.
For Buffett, the dining room symbolized the culture of Wall Street, which he found abhorrent. He had been born in an age where money was scarce and life was lived at a walking pace, and he’d arranged his own life to keep things that way. On Wall Street, money was plentiful and life was lived at whatever speed bandwidth could currently supply. People left their homes at five a.m. daily and returned at nine or ten at night. Their employers showered them with money for doing that but in return wanted every waking second of their time and supplied certain services to keep them working at a treadmill pace. Buffett as a child had been impressed by the Stock Exchange employee who rolled custom-made cigars, but now found this astonishing.
“They had a barbershop downstairs, and they didn’t even tell me about it. They were