Bought and Paid For

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Bought and Paid For Page 32

by Charles Gasparino


  214 Pandit’s heated conversation with Sheila Bair from author’s interviews with people close to the matter and confirmed by Bair’s spokesman.

  215 Account of Michael Paese’s comments to Nides from author’s interviews with people familiar with the discussion.

  218 Details of SEC charge against Goldman from “SEC Charges Goldman Sachs with Fraud,” Wall Street Journal, April 17, 2010.

  219 Bear Stearns’s refusal to package Paulson’s CDOs from Gregory Zuckerman’s The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History, New York, Broad-way Books, 2009.

  221 Account of Census Bureau hiring practices from “Census Workers Share Their Horror Stories,” New York Post, June 1, 2010.

  222 Account of Dimon nearly punching a senior executive while at Citigroup from author’s interviews with people close to the matter.

  222 JPMorgan executives claim that they would not go through with the purchase of Bear Stearns again from author’s interviews with people close to the matter.

  224 Dimon’s reactions to criticisms made during JPMorgan’s annual meeting from “Mood Sours in a Year at JPM: Dimon Keeps a Title,” American Banker, May 19, 2010.

  226 Account of Obama inviting Bank of America’s Brian Moynihan and not Jamie Dimon to a state dinner from “President Obama Has Party, Does Not Invite Former Best Banker,” New York magazine, May 20, 2010.

  227 “The term too big to fail” from “No More ‘Too Big to Fail,’” Washington Post, November 13, 2009.

  229 Dimon’s directive to senior JPMorgan staff to begin contributing to the Republican Party from author’s interviews and “Irked, Wall St. Hedges Its Bet on Democrats,” New York Times, February 8, 2010.

  232 Citigroup’s, Goldman Sachs’s, and Morgan Stanley’s contributions to the Republican Party from Opensecrets.org.

  231 Account of meeting between Wall Street executives and Republican senators Mitch McConnell and John Cornyn from author’s interviews with people present during the meeting.

  233 Paul Volcker’s grading of financial reform from “Volcker Pushes for Reform, Regretting Past Silence,” New York Times, July 9, 2010.

  234 “As it was with Sarbanes-Oxley” from “The Ugly Truth About Financial Reform,” Daily Beast, July 14, 2010.

  235 “The Democrats who wrote the bill” from “The New Lords of Finance: Why Wall Street and Washington Both Like ‘Reform,’” Wall Street Journal, May 24, 2010.

  236 “Cheerleaders for” from “Triumph of the Regulators: The Dodd-Frank Financial Reform Bill Doubles Down on the Same System It Failed,” Wall Street Journal, June 28, 2010.

  236 “America—and our trading partners—need smart” from prepared testimony of Vikram S. Pandit, chief executive officer, Citigroup Inc., before the Congressional Oversight Panel, March 4, 2010.

  Afterword

  238 “Wall St. Hiring in Anticipation of an Economic Recovery,” New York Times, July 10, 2010.

  239 “An astonishing $1.8 trillion of cash” from “Obama’s CEO Problem—and Ours,” Washington Post, July 5, 2010.

  240 Immelt’s description of the business environment in the U.S. as “terrible” from “Immelt Hits Out at China and Obama,” Financial Times, July 1, 2010.

  INDEX

  ACORN

  AIG bailout

  Angelides, Phil

  Axelrod, David

  Ayers, William

  Bachus, Spencer

  Bailout. See Federal bailout

  Bair, Sheila

  Bank of America

  bailouts

  bonus payouts

  Moynihan as CEO

  postbailout profit

  TARP payback by

  See also Lewis, Ken

  Bear Stearns

  and Cayne

  collapse of

  Bernanke, Ben

  Big Government

  benefits to Wall St.

  defined

  See also Federal bailout; Wall Street-Washington connection

  BlackRock

  postbailout profit

  risk management expertise

  Blankfein, Lloyd

  biographical information

  earnings/bonuses

  on “God’s work,”

  letter to shareholders (2010)

  relationship with Geithner

  relationship with Obama

  ShoreBank rescue

  See also Goldman Sachs

  Bloomberg, Michael

  Boehner, John

  Bolten, Josh

  Bonds

  defined

  postbailout profit from

  ratings, fictitious

  Bonuses

  amounts of. See individual companies and CEOs

  cap under TARP

  Obama’s outrage about

  Brown, Scott

  Buffett, Warren

  Goldman bailout

  postbailout profit

  Burkman, Jack

  Bush, George W.

  pro-Wall St. actions

  Wall St. rejection of

  Campaign contributions

  from Wall St., scope of

  See also individual companies

  Carry trade

  Cavanaugh, Mike

  Cayne, James

  Citigroup

  bailout

  bonus payouts

  contributions to Obama

  creation of

  failure and Rubin

  postbailout profit

  ring-fenced assets

  TARP payback by

  too-big-to-fail status

  See also Pandit, Vikram; Rubin, Robert; Weill, Sandy

  Citron, Robert

  Clinton, Bill

  Glass-Steagall repeal by

  and housing bubble

  and Rubin

  Clinton, Hillary, Wall St. opposition to

  2008 presidential campaign and

  Cohn, Gary

  conflict with Reid

  as Obama supporter

  Collateralized debt obligations (CDOs)

  Commercial bank, defined

  Commodity Futures Trading Commission (CFTC)

  Community Reinvestment Act

  Conservatives and right

  tax agenda of

  Wall St. ties, myth of

  See also Republican Party

  Cornyn, John

  Countrywide Financial

  Craig, Greg

  Credit-default swap

  Cuomo, Andrew

  Daley, Bill

  Davis, Evelyn Y.

  Davis, Steve

  Democratic Party

  Wall St. donors to

  See also Liberals and left

  Deregulation

  Derivatives

  boom in market for

  collateralized debt obligations

  credit-default swap

  defined

  See also Mortgage-backed bonds

  D.E. Shaw

  Dimon, Jamie

  and “bankers’ meeting,”

  earnings/bonuses

  Federal Reserve Board and

  financial reform, reaction to

  relationship with Obama

  too-big-to-fail, criticism of

  turns to right

  See also JPMorgan Chase

  Dinkins, David

  Discount window

  Dodd, Chris

  as banking bill architect

  Wall St. contributions to

  Emanuel, Rahm

  as chief of staff

  Wall St. ties

  Fannie Mae/Freddie Mac

  bailout

  functions of

  Federal bailout

  AIG

  bank survival, guarantee of. See Too-big-to-fail

  cost of

  defined

  mark-to-market accounting, relaxing

  money-making status quo, preserving

  mortgage-backed securities purchase

  necessity of

  a
nd Paulson

  postbailout profit, scope of

  TARP

  See also Wall Street-Washington connection; individual companies

  Federal debt

  Federal Deposit Insurance Corporation (FDIC)

  Federal Reserve

  chairmen. See Bernanke, Ben; Greenspan, Alan; Volcker, Paul

  expanded powers of

  functions of

  and interest rates. See Interest rates

  Feinberg, Ken

  Financial collapse

  blame, accusations of

  causes of

  and deregulation

  and 2008 campaign

  Wall St. survival. See Federal bailout; Wall Street-Washington connection

  Financial Crisis Inquiry Committee

  Financial Industry Regulatory Authority (FINRA)

  Financial reform

  consumer protection agency proposal

  Dodd-Frank bill

  effectiveness, speculation on

  FDIC authority

  Fed, power of

  Lincoln proposal

  proprietary trading, curtailing

  Republican-Wall St. ties, postbailout

  systemic risk regulation

  Volcker rule

  Wall St. reaction to

  and Wall St. survival

  Fink, Larry

  doubts about Obamanomics

  as Obama supporter

  See also BlackRock

  Fitch

  Fleming, Greg, as Obama supporter

  Forstmann, Teddy

  Fortress Capital

  Frank, Barney

  as banking bill architect

  as Wall St. ally

  Wall St. contributions to

  Freddie Mac. See Fannie Mae/Freddie Mac

  Froman, Michael, in Obama administration

  Fuld, Richard (“Dick”)

  as Obama supporter

  See also Lehman Brothers

  Gallogly, Mark, and Wall St.-Obama ties

  Geithner, Timothy

  stabilization plan

  as Treasury secretary

  Wall St. ties

  General Electric, profits after bailout

  Gensler, Gary

  in Obama administration

  Wall St. ties

  Gillibrand, Kirsten

  Giuliani, Rudy

  Glass-Steagall Act

  profits after bailout

  provisions

  renewal proposal

  repeal of

  Goldman Sachs

  Abacus deal

  bailout

  as bank versus hedge fund

  bonus payouts

  contributions to Obama

  and Greek financial crisis

  legal charges against

  myth of

  postbailout profit

  profiteering, PR strategy about

  public outrage toward

  Rubin at

  shorting housing market

  TARP payback by

  transformation under Blankfein

  Volcker rule impact on

  Wells notice

  See also Blankfein, Lloyd

  Gorman, James

  earnings/bonuses

  See also Morgan Stanley

  Government-sponsored enterprises

  Grasso, Richard

  Greece, financial crisis and Goldman

  Green agenda, big business profits from

  Greenberg, Alan (“Ace”)

  Greenberg, Hank

  Greenspan, Alan

  federal career of

  and Wall St. prosperity

  Hall, Andy

  Health-care reform

  Hedge funds

  collapse of

  defined

  Hedging, defined

  Heilemann, John

  Housing market

  collapse of

  and toxic loans. See Mortgage-backed bonds

  Immelt, Jeffrey

  Interest rates

  low, benefit to Wall St.

  raising, impact of

  Jackson, Jesse

  Jarrett, Valerie

  Jones, Van

  JPMorgan Chase

  bailout

  Bear Stearns purchased by

  bonus payouts

  contributions to Obama

  Dodd bill, impact on

  postbailout profit

  profiteering, PR strategy about

  TARP payback by

  Volcker rule impact on

  See also Dimon, Jamie

  Kennedy, Teddy

  King, Peter

  Koenen, Austin

  Komansky, David

  Langone, Ken

  Lehman Brothers, collapse of

  liquidation of

  Leverage

  Levitt, Arthur

  Levy, Harold

  Lewis, Ken

  on postbailout progress

  See also Bank of America

  Liberation theology

  Liberals and left

  tax agenda of

  Wall St. bias toward

  See also Democratic Party

  Lincoln, Blanche

  Long-Term Capital Management

  Ludwig, Eugene

  McCain, John

  antibank position

  Wall St. rejects

  McConnell, Mitch

  Mack, John

  politics and policies of

  postbailout high road

  retirement of

  See also Morgan Stanley

  McKenna, Andy

  Madoff, Bernie

  Maloney, Carolyn

  Mark-to-market accounting

  Merrill Lynch

  Mexican peso crisis

  Miller, Paul

  Moody’s Investor Service

  Moral hazard

  Morgan Stanley

  bailout

  bonus payouts

  contributions to Obama

  postbailout loss

  postbailout profit

  public outrage toward

  TARP payback by

  See also Mack, John

  Mortgage-backed bonds

  defined

  development of

  federal purchase of

  and financial collapse

  resurgence after bailout

  Moynihan, Brian

  Mozilo, Angelo

  Municipal bonds

  defined

  political connection to

  Nanny state

  New York City, shady fiscal practices

  Nides, Tom

  on health-care reform

  as Obama supporter

  postelection positions

  Wall St. ties

  Obama, Barack

  anti-Wall St. actions. See Financial reform

  approval ratings decline

  attacks bonuses/Wall St.

  and big banks. See Wall Street- Washington connection

  as community organizer

  economy, approach to. See Federal bailout; Financial reform; Obamanomics; Stimulus package

  economy, lack of understanding of

  “fat cats” statement

  health-care reform

  “savvy businessmen” statement

  ultraliberalism of

  Wall St. contributions to

  Wall St. execs in administration of

  Wall St. initial contact with

  Obamanomics

  banking regulation. See Financial reform inequity for middle Americans See also Small business; Unemployment rate

  public attacks on

  stimulus package, failure of

  tax agenda

  Wall St. misgivings about

  Wall St. profiteering from. See Federal bailout

  O’Neal, Stanley

  Orange County, Calif., shady fiscal practices

  Paese, Michael

  Palin, Sarah

  Pandit, Vikram

  ineffectiveness of

  support of financial reform

  See als
o Citigroup

  Parsons, Dick

  Paulson, Hank

  as bailout architect

  opposition from McCain

  Wall St. ties

  Paulson, John

  Paulson & Co.

  Pelosi, Nancy

  Perella, Joe

  Prince, Charles (“Chuck”)

  Proprietary trading, reform of

  Reed, John

  Regulation. See Financial reform

  Reid, Harry

  Republican Party

  and election 2000

  financial collapse, blame on

  Wall St. donors to

  Wall St. support, postbailout

  See also Conservatives and right

  Rezko, Tony

  Ring-fenced assets

  Roubini, Nouriel

  Rubin, James

  Rubin, Robert

  and Citi failure

  earnings/bonuses

  at Treasury department

  Wall St. ties

  Run on the bank

  Savings and loan (S&L)

  Schapiro, Mary

  Schumer, Charles (“Chuck”)

  Schwarzman, Steve

  Securities and Exchange Commission (SEC)

  functions of

  Goldman investigation

  Securities Industry and Financial Markets Association (SIFMA)

  Securitization

  Seidenberg, Ivan

  Shapiro, Mark

  ShoreBank, Wall St. rescue of

  Shorting, by Goldman

  Sidoti, Peter

  Simmons, Adele

  Small business

  Obamanomics, negative impact on

  recession, survival tactics

  Soros, George

  Spector, Warren

  fired from Bear Stearns

  as Obama campaign worker

  as Obama supporter

  Spitzer, Eliot

  Stamenson, Michael

  Standard & Poors

  States, stimulus package, failure of

  Stimulus package

  cost of

  failure of

  and green agenda

  Summers, Larry

  as chief economic adviser

  and peso crisis

  Wall St. ties

  Systemic risk

  TARP (Troubled Asset Relief Program)

  in bailout

  bonus cap under

  cost of

  payback by banks

  Taxes

  conservative approach

  liberal approach

  Obama agenda

  Tea Party

  Thain, John

  Too-big-to-fail

  and borrowing by banks

  and Citigroup

 

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