Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the FinancialSyst

Acquire Banking Operations of Wachovia; Crisis on Wall Street,” New York Times, September 30, 2008.

501 “They claim to be free market advocates”: Pelosi delivered this speech from the House floor on September 29, 2008. “Speaker Pelosi Speaks in Support of Emergency Economic Stabilization Act of 2008,” US Fed News, September 30, 2008.

502 “They wouldn’t have brought this bill ”: Michele Davis, appearing on PBS’s Frontline, April 9, 2009.

502 bailout was rejected 228 to 205: “US Bailout Plan Rejected,” Nation, September 29, 2008.

504 “Citibank is honored to enter into a partnership”: From an ad that ran in USA Today that Friday, according to David Enrich and Dan Fitzpatrick, “Wachovia Chooses Wells Fargo, Spurns Citi,” Wall Street Journal, October 4, 2008.

507 Increasing FDIC insurance on new bailout bill: Meena Thiruvengadam, “Some Ex-FDIC Officials See No Reason to Hike Insurance Limit,” Dow Jones Newswires, October 3, 2008.

507 “We have shown the world that the United States”: David M. Herszenhorn, “Bailout Plan Wins Approval; Democrats Vow Tighter Rules,” New York Times, October 3, 2008.

509 “If you haven’t discovered your role”: “The Guilty Men of Wall Street,” Economist, October 14, 2008.

509 “I want to be very clear”: From transcripts of Fuld’s testimony on the causes and effects of the Lehman Brothers bankruptcy, Hearing of the House Oversight and Government Reform Committee, chaired by Representative Henry Waxman, Monday, October 6, 2008.

509 “Your company is now bankrupt”: Ibid.

509 “the majority of my compensation”: Ibid.

510 “Not that anybody on this committee cares about this”: Ibid.

511 “Some critics have worried that Treasury”: Author obtained Buffett’s letter to Paulson from a confidential source.

513 “We have been made aware of rumors”: “MUFG Issues Statement Regarding Transaction with Morgan Stanley,” Business Wire, October 8, 2008.

513 “We can buy these preferred shares”: Representative Barney Frank said to taxpayers in Providence, Rhode Island, on October 8, 2008. Glenn Somerville, “Treasury Says Has Power to Inject Bank Capital,” Reuters, October 9, 2008.

513 UK to invest $87 billion in Barclays: Banks eligible to participate included Abbey, Barclays Plc, HSBC Holdings Plc, Lloyds TSB Group Plc, Royal Bank of Scotland (RBS, HBOS), Nationwide Building Society, and Standard Chartered Plc. Ben Livesey and Jon Menon, “U.K. to Inject About $87 Billion in Country’s Banks,” Bloomberg News, October 8, 2008.

514 “The Brown government has shown itself ”: Paul Krugman, “Gordon Does Good,” October 12, 2008.

521 “We Have The Check!!!” Author obtained copy of Kindler’s e-mail to Morgan Stanley staffers from a confidential source.

CHAPTER TWENTY

522 “Nick Calio just called me”: This and all following e-mails cited were obtained by Judicial Watch, a public interest group, in response to Freedom of Information Act requests it filed on October 16, 2008. For the first batch of e-mails see http://www.judicialwatch.org/files/documents/2009/Treasur yDocsPart1.pdf.

524 A little after 2:00 p.m.: Confirmed by Christal West’s e-mail, sent at 10:55 a.m. on Monday, October 13, 2008: “There will be a principals only Meeting today prior to the 3:00 pm meeting with CEOs… . Principals Meeting 2:15 pm-3:00 pm Hank’s Office (Room 3330).”

524 “To encourage wide participation”: From “Talking Points” documents, also obtained by Judicial Watch.

524 Meeting background: Nina Easton, “How the Bailout Bashed the Banks,” Fortune, June 22, 2009.

526 “They’re all in”: This and all succeeding e-mails to the end of this chapter come from the second batch of FOIA-requested e-mails, courtesy of Judicial Watch. See http://www.judicialwatch.org/files/documents/2009/TreasuryDocsPart2.pdf

527 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

533 “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.

534 “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.

534 “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.

534 Government increasing Citigroup stake/funds: Eric Dash, “U.S. Agrees to Raise Its Stake in Citigroup,” New York Times, February 28, 2009.