Too Big to Fail [208]
Standing at the back side of 85 Broad Street, they saw Blankfein and Cole at least thirty yards ahead of them intently marching down William Street toward the Fed with Goldman’s entire senior team.
“They’re fucking standing us up!” Flowers said.
When the JP Morgan bankers Lee, Braunstein, and Feldman arrived at AIG, they found the building practically empty, which struck the men as odd, given that the firm was squarely in the middle of a life-or-death crisis.
To Willumstad, who came to greet them, their arrival meant that his already frosty relationship with JP Morgan had just taken another turn for the worse: Were they still his adviser? Or were they now working for the government? Or were they working for themselves?
Before beginning the meeting, Braunstein had a private conversation with Willumstad. “The government asked us to do this. Are you okay with that?”
“Of course,” Willumstad replied.
When they returned to the conference room, Lee, in a hurry to get over to the Fed, fired off a half dozen questions in rapid succession. “How firm a grip do you have on your cash? Where are the ratings agencies on this? What kind of credit lines do you have?”
Willumstad was tentative with his answers. The numbers kept getting worse, he said. And with Lehman’s failure, and the markets likely to swoon, the value of AIG’s assets was likely to tumble further, giving them even less collateral to post.
To Lee, it was abundantly clear that the company—and Willumstad—didn’t have a firm grip on its finances, exactly as Black had told him.
Just before the bankers left for the Fed, Willumstad, trying to maintain an air of calm, said encouragingly, “I think we still have some time.”
As the JP Morgan contingent began briskly walking over to the Fed, Lee said, shaking his head: “Whenever someone says they have time, there’s never enough. And when they say they need money, the number is always too low.” He paused before declaring, “They won’t last the week.”
After spending an arduous weekend in the NY Fed’s lobby, many of the same members of the band of bankers and lawyers now disconcertingly found themselves reassembled there.
One of the key new figures in attendance was Eric R. Dinallo, the superintendent of the New York State Insurance Department. Earlier that morning, he had formally agreed to allow AIG to use some of its regulated insurance company assets—up to $20 billion—as collateral to help stabilize the company. Dinallo had been driving up to Governor Paterson’s office—he had been slated to stand behind the governor during a press conference to announce the plan—when Geithner called and told him he should be at this meeting instead.
As they milled about waiting for the meeting to begin, Blankfein poured a cup of coffee for Dinallo. “I hope you represent the bookends of this financial crisis,” he said, “because the last time I saw you was at the mono-lines, and I hope we’re done with AIG.” Dinallo had convened a meeting of Wall Street chiefs back in January to discuss the fate of the insurers Ambac and MBIA, which were faltering amid the credit crisis.
When Lee, Braunstein, and Feldman finally arrived, they immediately felt outgunned, as it appeared as if Goldman’s entire executive thirtieth floor had cleared out and set up shop at the Fed. Bob Scully and Ruth Porat from Morgan Stanley, who had now been officially hired by the Fed to represent its interests, were also stunned by the depth of Goldman’s presence. “Why is Lloyd here?” Scully whispered to Porat.
What went unspoken was the fact that all three banks, and virtually all of Wall Street, were huge counterparties to AIG. If the