The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [571]
3. Interview with Donald Feuerstein and many others, who confirmed his role and the POD nickname.
4. Interviews with Donald Feuerstein, Tom Strauss, Deryck Maughan, Bill McIntosh, John Macfarlane, Zach Snow, Eric Rosenfeld.
5. Interview with Bill McIntosh.
6. Interview with John Macfarlane.
7. Roger Lowenstein, Buffett: The Making of an American Capitalist. New York: Doubleday, 1996, quoting Eric Rosenfeld.
8. Lowenstein, Buffett, quoting John McDonough.
9. Interview with Eric Rosenfeld.
10. Interview with Donald Feuerstein.
11. Feuerstein went back into the conference room after talking to Munger and repeated the “thumb-sucking” comment to another lawyer, Zach Snow, without further context. He did not seem to have grasped its significance, according to Snow in an interview. Feuerstein says Munger said, “Warren and I do that all the time.” Whatever the wording, neither Feuerstein nor Buffett took alarm at Munger’s remark.
12. Interview with Gerald Corrigan.
13. Feuerstein had had breakfast with one director, Gedale Horowitz, and told him much the same story, slightly more informatively, on the morning of August 8. But Horowitz says he also felt misled.
14. Carol Loomis, “Warren Buffett’s Wild Ride at Salomon,” Fortune, October 27, 1997.
15. Munger’s later statement that he dragged this out of Feuerstein differs from Feuerstein’s recollection. Both agree that Munger was given a clear description. There is no question that Buffett and Munger’s overall interpretation of the actions of both Feuerstein and Gutfreund grew harsher as more information came to light.
16. Statement of Salomon Inc., submitted in conjunction with the Testimony of Warren E. Buffett, Chairman and CEO of Salomon, before the Securities Subcommittee, Committee of Banking, Housing and Urban Affairs, U.S. Senate, September 10, 1991.
17. Mercury Asset Management (an affiliate of S.G. Warburg) and the Quantum Fund. When the Federal Reserve contacted Salomon, it was initially because S.G. Warburg had bid in its own name as a primary dealer (Statement of Salomon Inc., September 10, 1991).
18. Charles T. Munger testimony before U.S. Securities & Exchange Commission, “In the Matter of Certain Treasury Notes and Other Government Securities,” File No. HO-2513, February 6, 1992.
19. Ibid.
20. Michael Siconolfi, Constance Mitchell, Tom Herman, Michael R. Sesit, David Wessel, “The Big Squeeze: Salomon’s Admission of T-Note Infractions Gives Market a Jolt—Firm’s Share of One Auction May Have Reached 85%; Investigations Under Way—How Much Did Bosses Know?” Wall Street Journal, August 12, 1991.
21. Buffett later said Wachtell, Lipton shared some blame, noting that Wachtell declared effective on August 8 a shelf registration for $5 billion of medium-term notes using a prospectus that was “purporting to state all material facts about Salomon” as of that date but contained no reference to Mozer’s activities or management’s inaction. “If this relaxed position was one that Wachtell, Lipton was conveying to the government and the public through official filings, it is not unlikely that they were conveying something similar to John, although I don’t know what,” Buffett said.
22. Interview with John Macfarlane.
23. Interview with Bob Denham, who discovered this when he moved into Feuerstein’s old office.
24. Charles T. Munger testimony before U.S. Securities & Exchange Commission, “In the Matter of Certain Treasury Notes and Other Government Securities,” File No. HO-2513, February 6, 1992.
25. If its lenders failed to renew the firm’s loans, Salomon would be forced to liquidate its assets almost overnight. In such a fire sale, assets would sell for a fraction of their carrying value. The apparently invincible balance sheet of Salomon would melt into bankruptcy’s black hole immediately.
26. Interview with Bill McIntosh.
27. Interviews with Donald Feuerstein, John Macfarlane.
28. Mozer didn’t report an existing net