Too Big to Fail - Andrew Ross Sorkin [326]
telling the press that he planned to mount a proxy contest: “Hank Greenberg: Plans Fight for Control or Buyout of AIG,” Dow Jones Newswires, September 16, 2008.
“Dear Bob”: The full text of Hank Greenberg’s letter to Robert Willumstad, dated September 16, 2008, can be viewed online at http://online.wsj.com/public/resources/documents/AIG09162008.pdf.
He and Ben Bernanke had scheduled a meeting with President Bush: According to the Wall Street Journal, this meeting took place at 3:30 p.m. See Monica Langley, Deborah Solomon, and Matthew Karnitschnig, “Bad Bets and Cash Crunch Pushed Ailing AIG to Brink,” Wall Street Journal, September 18, 2008.
“Well, you finally get your chance”: Richard Beattie’s remarks to Robert Willumstad, as first reported in Fortune magazine. James Bandler, “Hank’s Last Stand,” Fortune, October 7, 2008.
the government was taking a large ownership stake—79.9 percent: Matthew Karnitschnig, Deborah Solomon, Liam Pleven. and Jon E. Hilsenrath, “U.S. to Take Over AIG in $85 Billion Bailout,” Wall Street Journal, September 16, 2008.
“Paulson is handling this the same way he did Fannie, Freddie and Bear”: Monica Langley, Deborah Solomon and Matthew Karnitschnig, “Bad Best and Cash Crunch,” Wall Street Journal, September 18, 2008.
the London Interbank offered rate: Known as LIBOR, this is the average interest rate charged when banks borrow unsecured funds from each other, whether it’s an overnight or long-term loan. In the United States, LIBOR maturities used in pricing loans most commonly include one, three, six, and twelve months. On Wednesday, September 17, 2008, the three-month LIBOR jumped 19 basis points, to 3.0625 percent, its biggest jump since September 1999. Lisa Twaronite, “Three-month Libor Marks Biggest Jump in Nine Years,” MarketWatch.com, September 17, 2008.
“I won’t be working for the federal government”: Willumstad, as quoted in Bandler, “Hank’s Last Stand,” Fortune..
a Maine insurer that had fought off an effort by Allstate: Laura Jereski, “We Understand Risk.” (UNUM Corp.), Forbes, March 20, 1989.
AIG had invested $1.35 billion in Blackstone: Peter Truell, “AIG Will Put $1.35 billion into Blackstone,” New York Times, July 31, 1998.
Greenberg’s office in exile: A year after his ouster from AIG in 2005, Greenberg relocated his office to the seventeenth floor of Citigroup’s headquarters, at 399 Park Avenue. See Diane Brady, “Hank at War,” BusinessWeek, March 27, 2006.
“He’s going on Charlie Rose to talk about AIG”: During that week, Hank Greenberg appeared on two consecutive episodes of Charlie Rose. The first was simply to discuss AIG’s crisis, and the second to speak about the federal bailout. See The Charlie Rose Show, “More Crises on Wall Street,” September 16, 2008 and “Former AIG Chair Discusses Bail Out,” September 17, 2008.
The gathering had been hastily organized: Langley, Solomon, and Karnitschnig, “Bad Bets and Cash Crunch,” Wall Street Journal.
had sent him an e-mail: facsimile of Herzog’s e-mail appeared in Fortune, where this was first reported. Carol J. Loomis, “AIG’s Rescue Has a Long Way to Go,” Fortune, December 29, 2008.
CHAPTER SEVENTEEN
“Reserve Primary Fund, had broken the buck”: It was the first time in fourteen years that a fund’s net asset value had fallen below $1, or “broken the buck.” Particularly unsettling was the fact that the Primary Fund’s owner, the Reserve Management Corporation, invented the money fund in 1970. See Christopher Condon, “Reserve Primary Money Fund Falls Below $1 a Share,” Bloomberg, September 16, 2008.
4.04 percent annual return: According to Morningstar Inc., the Reserve Primary Fund posted a return of 4.04 percent over a twelve-month period, versus a 2.75 percent average among more than twenty-one hundred money market funds it tracks. See Binyamin Appelbaum, “Beyond Wall St., Losses Spill Over,” Washington Post, September 18, 2008; Eleanor Laise, “Market Rescue: Money Funds Offer