Too Big to Fail - Andrew Ross Sorkin [286]
“But you didn’t write your name in,” Geithner pointed out. “You write it in,” Mack instructed, and Geithner penned the words “MORGAN STANLEY” in block letters at the top. “And you didn’t put the amount in,” Geithner protested.
“It’s $10 billion,” Mack replied nonchalantly.
Thain, looking at Mack in dismay, said, “You can’t sign that without your board.”
“No?” Mack replied. “My board’s on twenty-four-hour notice. They’ll go along with it. And if they don’t, they’ll fire me!”
Blankfein indicated that he, too, needed to speak with his board. “I don’t feel authorized to do that on my own,” he said, with everyone else agreeing that they, too, would need to go through proper channels.
Dimon stood up, walked to the corner of the room near the window, and decided that he was going to convene a board meeting by phone right then and there. He called his assistant, Kathy, and told her to get the directors on the line. The other CEOs dispersed to separate conference rooms to call their offices.
At 4:01 Wilkinson finally replied to Kaplan’s e-mail. “We are there except for one,” he wrote, referring to Wells Fargo. “This deal will get done.”
Outside in the hallway, a huge grin was on Pandit’s face. “We just got out. They’re going to give us $25 billion, and it comes with a guarantee,” he said into the cell phone, sounding as if he had just won the Powerball lottery.
Mack, having already signed the agreement, called Roy Bostock, one of Morgan Stanley’s board members, hoping he could help calm the waters with the other directors over his impetuous decision.
“I want to give you a heads-up,” he told him. “We’re going to be having a board call in about twenty minutes or so. It’s going to be to approve accepting $10 billion in TARP money,” he said, before pausing. “But I already have.”
Bostock knew what was being asked of him. “I understand. The board will not throw an ax in the wheel here.”
When the Morgan Stanley call finally began, Bostock started by saying, “John, we didn’t have any choice but for you to sign that. It was the right thing to do.” Bostock called for a vote before there could be much discussion. “I’m in favor,” he began.
In stark contrast, Dimon’s tone when he spoke to his own board was bleak. “This is asymmetrically bad for JP Morgan,” he said, whispering into his cell phone. In other words, the money would help the weaker banks catch up to them. “But we can’t be selfish. We shouldn’t stand in the way.”
At 5:38, Bob Hoyt, while collecting the signed papers, shot an e-mail to the team, “On my way—that’s 5 down, 4 to go.”
Paulson, Geithner, Bernanke, and Bair sat in Paulson’s office, waiting. With the exception of Kovacevich’s grumbling, the meeting had gone well, much better than they had anticipated. They had effectively just nationalized the nation’s financial system, and no one had had to be removed from the room on a stretcher. Paulson, running his fingers over his stomach, as he always did when he was deep in thought, still couldn’t believe he had pulled it off.
Paulson had just gotten off the phone with Barack Obama—then the presidential front-runner—who had just finished up a speech about the economy in Toledo, Ohio, to tell him the news. He then tried John McCain, but couldn’t get through.
At 6:23 p.m. Wilkinson wrote to the team, “8 out of 9 are in…. [S]tate [S]treet is just waiting on board…. [W]e are basically done.”
Two minutes later, at 6:25 p.m., Wilkinson triumphantly reported the final tally from his BlackBerry: “We now have 9 out of 9.”
Kaplan, at the White House, replied, “Awesome.”
David Nason carried the signed papers down the hallway to Paulson.
Standing in the doorway of the secretary’s office, Nason paused for a moment as Paulson and his half-dozen senior staffers took a minute to appreciate the significance of the moment.
“We just crossed the Rubicon,” he said.
EPILOGUE
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