Too Big to Fail [328]
“Treasury, Fed Weighing Wider Plan”: Alison Vekshin, “Treasury, Fed Weighing Wider Plan to Ease Crisis, Schumer Says,” Bloomberg, September 18, 2008.
Charlie Gasparino of CNBC reported what he was hearing from his sources on Wall Street”: “Treasury Secretary Hank Paulson is working on an RTC-type solution to the financial crisis, reports CNBC’s Charlie Gasparino.” CNBC, September 18, 2008.
“Mr. Secretary, we would like to meet with you”: On September 28, Pelosi relayed her phone conversation with Paulson to CBS’s 60 Minutes anchor Scott Pelley. Pelley also interviewed Paulson on the show. “Secretary Paulson Details the Federal Bailout,” 60 Minutes, CBS, September 28, 2008.
The notion of becoming a bank holding company: Jon Hilsenrath, Damian Paletta, and Aaron Lucchetti, “Goldman, Morgan Scrap Wall Street Model, Become Banks in Bid to Ride Out Crisis,” Wall Street Journal, September 22, 2008.
to meet with the congressional leadership at Nancy Pelosi’s office: The meeting took place on the second floor of the Capitol, in a conference room beside Pelosi’s personal suite. Carl Hulse and David M. Herszenhorn, “Behind Closed Doors, Warnings of Calamity,” New York Times, September 20, 2008.
“I spent my career as an academic studying great depressions”: Bernanke, as quoted by Wessel, In FED We Trust, 203.
noticeably gulped: As Schumer himself told the New York Times, “When you listened to him describe it, you gulped.” David M. Herszenhorn, “Congressional Leaders Stunned by Warnings,” New York Times, September 19, 2008.
“What about the homeowner?”: Wessel, In FED We Trust.
Richard Shelby disapprovingly characterized: “If we say ‘whatever it takes,’ that means there’s a blank check of the treasury, future generations, to pay for the mistakes of a lot of people.”
“If it doesn’t pass, then heaven help us all”: Deborah Solomon, Liz Rappaport, Damian Paletta, and Jon Hilsenrath, “Shock Forced Paulson’s Hand,” Wall Street Journal, September 20, 2008.
“Do you know what you are asking me to do?”: New York Times, September 20, 2008.
“I think we need to do this”: McConnell, a Republican senator from Kentucky and Republican leader of the Senate, who often spars with Reid on the Senate floor, “reached over to assure his colleague they could work it out.” New York Times, September 20, 2008.
put in place a ban on shorting financial stocks: The SEC issued a press release on the morning of Friday, September 19, that read: “Given the importance of confidence in financial markets, the SEC’s action halts short selling in 799 financial institutions. The SEC’s emergency order…will be immediately effective and will terminate at 11:59 p.m. ET on Oct. 2, 2008. The Commission may extend the order beyond 10 business days if it deems an extension necessary in the public interest and for the protection of investors, but will not extend the order for more than 30 calendar days in total duration.” See http://www.sec.gov/news/press/2008/2008-211.htm.
“While this is all politically pleasing”: Chanos, as reported by Kara Scannell, Deborah Solomon, Craig Karmin, and Gregory Zuckerman, “SEC Is Set to Issue Temporary Ban Against Short Selling,” Wall Street Journal, September 19, 2008.
Merrill Lynch had bought insurance covering $150 million: On September 17, Merrill bought insurance to cover $106.2 million in Morgan Stanley debt and returned the following day, September 18, to buy protection on another $43 million of debt, according to trading documents obtained by the Wall Street Journal. Susan Pulliam, Liz Rappaport, Aaron Lucchetti, Jenny Strasburg, and Tom McGinty, “Anatomy of the Morgan Stanley Panic—Trading Records Tell Tale of How Rivals’ Bearish Bets Pounded Stock in September,” Wall Street Journal, November 24, 2008.
Citigroup, Deutsche Bank, UBS, AllianceBernstein, and Royal Bank of Canada: Ibid.
Wei Sun Christianson: In December 2007, Christianson played a major role in negotiating Morgan Stanley’s $5.6 billion deal with China Investment Corp., which gave CIC a 9.9%