Too Big to Fail [317]
CHAPTER ELEVEN
“to conduct a thorough strategic”: “American International Group Names Robert B. Willumstad Chief Executive Officer.” Transcript of an AIG board conference call, June 16, 2008.
AIG’s $5.4 billion loss: Liam Pleven, “AIG Posts $5.4 Billion Loss as Housing Woes Continue,” Wall Street Journal, August 7, 2008.
Geithner had greeted him with his usual firm, athletic handshake: According to Geithner’s calendar, they were scheduled to meet from 9:30 to 10:30 a.m. on Tuesday, July 29, 2008.
Morgan Stanley would receive a token payment of $95,000: Aaron Lucchetti, “The Fannie-Freddie Takeover: Two Veterans Led Task for Morgan Stanley,” Wall Street Journal, September 8, 2008.
“Either investors are going to be massively diluted”: Al Yoon, “Freddie Posts 4th Straight Qtrly Loss, Slashes Dividend,” Reuters, August 6, 2008.
Freddie’s reported loss of $821 million: Ibid.
In the first week of August; On that Monday: These meetings took place on August 4 and 5.
Min Euoo Sung arrived in Manhattan from Seoul: Lehman’s “secret meetings” with KDB were reported by Henny Sender and Francesco Guerrera, “Lehman’s Secret Talks to Sell 50% Stake Stall,” Financial Times, August 20, 2008.
Fuld owned ninety-seven acres in the area: “Lehman Brothers CEO Is Local Land Baron,” Idaho Mountain Express, September 24, 2008.
“A bubble, once ‘pricked’”: Ben Bernanke and Mark Gertler, “Monetary Policy and Asset Price Volatility,” Federal Reserve Bank of Kansas City’s Economic Symposium, Jackson Hole, Wyoming, 1999. See http://www.kc.frb.org/Publicat/sympos/1999/S99gert.pdf.
“the Bernanke doctrine”: John Cassidy, “Anatomy of a Meltdown,” New Yorker, December 1, 2008.
“It is not the responsibility of the Federal Reserve”: Ben Bernanke, “Housing, Housing Finance, and Monetary Policy,” Federal Reserve Bank of Kansas City’s Economic Symposium, Jackson Hole, Wyoming, August 31, 2007. See http://www.federalreserve.gov/newsevents/speech/bernanke20070831a.htm.
One day a little Dutch boy: Alan S. Blinder, “Discussion of Willem Buiter’s, ‘Central Banks and Financial Crises,’” Federal Reserve Bank of Kansas City’s Annual Economic Symposium,” Jackson Hole, Wyoming, August 23, 2008. See http://www.kc.frb.org/publicat/sympos/2008/blinder.08.25.08.pdf
“statutory resolution regime for nonbanks”: Ben Bernanke, “Reducing Systemic Risk,” Federal Reserve Bank of Kansas City’s Annual Economic Symposium,” Jackson Hole, Wyoming, August 22, 2008.
Moody’s cuts its ratings: Jody Shenn, “Fannie, Freddie Preferred Stock Downgraded By Moody’s,” Bloomberg News, August 22, 2008.
having shorted subprime before anyone else: Andy Kessler, “The Paulson Plan Will Make Money for Taxpayers,” Wall Street Journal,” September 25, 2008.
analyst report issued by Goldman Sachs raising questions about the firm: Hugh Son, “AIG Falls as Goldman Says a Capital Raise Is ‘Likely,’” Bloomberg News, August 19, 2008.
As the company had warned in an SEC filing: Figures are from AIG’s 10-Q filing on August 6, 2008.
AIG owning seventy-one state-regulated insurance agencies: AIG issued a press release on September 18, 2008, assuring policyholders that their protection is top priority. “The 71 state-regulated insurance companies within AIG did not receive a bailout; they are financially solvent,” it said. “The federal bailout of the non-insurance portions of AIG does not negatively change the solvency strength of its insurance subsidiaries.” http://www.aig.com.
“rather than letting these conditions fester”: “The result has been that they have been unable to provide needed stability to the market. They also find themselves unable to meet their affordable housing mission. Rather than letting these conditions fester and worsen and put our markets in jeopardy, FHFA, after painstaking review, has decided to take action now.” “Fhfa Director Lockhart Issues Statement on Safety and Soundness Concerns,” U.S. Fed News, September 7, 2008.
Treasury’s takeover terms: Rebecca Christie and John Brinsley, “U.S. Takeover of Fannie, Freddie Offers ‘Stopgap,’” Bloomberg News, September