Too Big to Fail [205]
“Thanks for your hard work,” the president told him. “Let’s hope things settle down.”
Doug Braunstein of JP Morgan was leaving his apartment on Manhattan’s Upper East Side at about 7:00 a.m. to head down to AIG when he received a call from Jamie Dimon.
“New plan,” Dimon told him. “Geithner wants us to work with them to do a huge capital raise for AIG. There’s going to be a meeting down at the Fed at eleven a.m.” Braunstein, blocking his ear against the noise of Manhattan traffic, protested, “We can’t raise this kind of money.”
Dimon promised that he’d have some help. “The government is inviting us and Goldman to make this happen.”
A look of horror came over Braunstein’s face as he asked, raising his voice, “Where the hell did Goldman Sachs come from? Don’t they have a conflict? I mean, look at their exposure to AIG. They’re a huge counterparty.”
Dimon dismissed his concerns. “The U.S. government is telling us to do this,” he repeated.
Braunstein persisted. “But—”
“Stop it,” Dimon insisted, annoyed that his top banker was challenging him. “This isn’t about us versus them,” he said. “We’ve been asked to help fix this situation.”
Once Braunstein got to the office, he, Dimon, and Black huddled to come up with a game plan about how to handle the Fed’s unusual request. They decided to enlist the help of James B. Lee Jr., the firm’s vice chairman.
Dimon hurried down the hall to give Jimmy Lee his marching orders. Lee, a classic suspender-wearing banker with a Golden Rolodex, had also arrived early to help manage the aftermath of Lehman’s collapse and had just gotten off the phone with one of his big clients, Rupert Murdoch. Sitting at a desk flanked by four computer screens, with a giant flat-screen television tuned to CNBC’s Squawk Box and his own private news ticker on the wall modeled after the Zipper in Times Square, Lee spun around in his chair.
“I have a job for you,” Dimon barked, standing in the doorway. “I want you to go down to the Fed.”
“To do what?” Lee asked in disbelief. After all, he had a busy day ahead of him, and he was expecting the market to be a disaster.
“I want you to run the AIG deal,” Dimon told him. “Geithner called. He wants us to find a private-market solution for AIG. It’s a big hole. This could be the mother of all loans.”
If there was one banker in the city who understood the world of debt and how to raise money in a pinch, it was Jimmy Lee. He was perhaps JP Morgan’s most senior dealmaker, a mogul unto himself with his own banquette at the Four Seasons at lunch. His power derived, in part, from the fact that he was a virtual ATM for corporate America, writing massive checks to finance some of the biggest deals in history. Dimon told him he was hoping that Lee could structure a deal to loan AIG enough money to keep operating and sign up a dozen other big financial players to follow him.
With that tall order delivered, Dimon disappeared, and Steven Black followed him into Lee’s office to give him a five-minute briefing and a folder of AIG materials heavier than a phone book. Describing AIG as a “fucking nightmare client,” Black described how dire the situation was becoming. “You can carry the ball from here,” Black said with a wry smile, happy to have AIG in someone else’s lap.
Lee was informed that he was expected at AIG for a meeting immediately and then he had to get over to the Federal Reserve Building by 11:00 a.m.
Lee met Braunstein and Mark Feldman in front of JP Morgan’s headquarters on Park Avenue, where Lee’s driver, Dennis Sullivan, a retired police officer who had shuttled him from his home in Darien, Connecticut, to Manhattan every day for more than twenty years, was waiting with his black Range Rover. Braunstein and Lee jumped in the back so that Braunstein could continue briefing him.
“C’mon. We’ve got to get downtown,” Lee instructed Sullivan. “No bullshit. We have to be down there like yesterday.”
John