Too Big to Fail [332]
Geithner now read off the amounts: In its FOIA request, Judicial Watch also obtained signed contracts from the banks, with accepted allotments written in ink by the CEOs. See http://www.judicialwatch.org/files/documents/2009/Treasury-ParticipationCommitment.pdf
EPILOGUE
“animal spirits”: In his 1936 book, The General Theory of Employment, Interest and Money, John Maynard Keynes wrote: “Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits—a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities,” p. 161.
“pay czar”: On June 10, in lieu of his much contested pay caps, Obama appointed Kenneth Feinberg to oversee and modify executive salaries and bonuses. Deborah Solomon, “Pay Czar Gets Broad Authority Over Executive Compensation,” Wall Street Journal, June 11, 2009.
“The government intervention is not a government takeover”: President George W Bush, “Remarks to the United States Chamber of Commerce,” Weekly Compilation of Presidential Documents, October 17, 2008.
Government increasing Citigroup stake/funds: Eric Dash, “U.S. Agrees to Raise Its Stake in Citigroup,” New York Times, February 28, 2009.
“the turd in the punchbowl”: According to an undisclosed official’s handwritten notes taken during a conference call in January 2009. Michael R. Crittenden and Jon Hilsenrath, “Bernanke Blasted in House—Political Heat Mounts on Fed as Grilling Over BofA Shows Ire at Its Interventions,” Wall Street Journal, June 26, 2009.
Shareholders voting for BofA–Merrill deal: Ieva M. Augstums and Stephen Bernard, “Merrill Lynch, Bank of America Shareholders Approve BofA’s Purchase of the Investment Bank,” Associated Press, December 5, 2008.
“How do they justify this outrage…?”: Michael D. Shear and Paul Kane, “Anger Over Firm Depletes Obama’s Political Capital,” Washington Post, March 17, 2009.
“We should hound them in the supermarket”: A few days after Cramer’s rant, AIG’s new chief, Edward Liddy, sent him a letter demanding a retraction and an apology to AIG employees. “It is one thing to criticize the executive leadership of AIG—that’s fair commentary,” he wrote. “But it is way out of bounds to incite people to confront and harass other AIG employees.” Shortly after, Cramer apologized on his show: “Sorry regular AIG guys. I did not mean you.” Heidi N. Moore, “AIG CEO Demands Apology from Mad Money’s Jim Cramer,” WSJ/Deal Journal, October 20, 2008.
“Is Goldman Sachs Evil?” Joe Hagen, “Is Goldman Sachs Evil? Or Just too Good?” New York, July 26, 2009.
“great vampire squid wrapped”: Matt Taibbi, “The Great American Bubble Machine,” Rolling Stone, July 13, 2009.
Goldman producing profit of $5.2 billion: On April 13, Goldman reported net earnings of $1.81 billion for its first quarter. Three months later, its second quarter earnings soared to $3.44 billion. See http://www2.goldmansachs.com.
Goldman’s VaR rising to record high: Christine Harper, “Goldman Sachs VaR Reaches Record on Risks Led by Equity Trading,” Bloomberg, July 15, 2009.
“emergency actions meant to provide confidence”: Department of the Treasury press release, “Secretary Geithner Introduces Financial Stability Plan,” February 10, 2009. See http://www.treasury.gov/press/releases/tg18.htm.
ALAN BLINDER “After the fact, it is extremely clear that everything fell apart on the day Lehman went under.”
“I never once considered”: Stephen Labaton, “Wall St. in Worst Loss Since ’01 Despite Reassurances