The Weekend That Changed Wall Street
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low, 36, 141
on subprime mortgages, 38
International Economic Forum, 202
International Monetary Fund, 175, 177
investment bankers, 12, 27, 35, 206
investment banking, 63, 112, 119, 124, 138, 139, 147, 150–51, 179, 191
as confidence game, 59, 73
end of traditional, 127–31
ethics and, 185
European, 139
mortgage-backed securities and, 37, 43–44
Iraq, 137
Ira W. Sohn Investment Research Conference, 66
Ireland, 136, 175
Isaac, Bill, 201
Italy, 175
Japan, 129, 130
Jordan, Vernon, 11
JPMorgan, 26, 211, 212
JPMorgan Chase, 11, 15, 16, 21, 29, 53, 69, 120, 129, 142, 214
Bear Stearns acquired by, 24, 32, 55–58, 63, 80, 87
Kashkari, Neel, 180–81
Kasparov, Garry, 192–93
Kelly, David, 21
Kelly, Robert, 16
Kennedy, Edward M., 200
Kolhatkar, Sheelah, 64
Korea Development Bank (KDB), 20, 69
Korologos, Ann McLaughlin, 75–76
Kovacevich, Dick, 149–50
LaBelle, Patti, 12
Lazear, Ed, 37–38, 127, 132–36
Lehman Brothers, 10, 13, 59, 166
attempted rescue of, 16–18, 24, 26–30, 32–34, 59–60, 68–69, 79–81, 83–90, 92, 94, 96–97, 99–106, 134, 180
bankruptcy of, 102, 103–6, 118–20, 128, 168, 210, 211, 216
bankruptcy as possibility for, 21, 24, 26, 34, 59, 97
CEO working groups and, 34
consequences of fall of, 32, 34, 86–87, 88–89
crisis at, 19–22, 27–29, 59–73, 92
doomed executives of, 145–46, 166
failure of, 110–16, 118, 124–26, 127, 130, 132, 134, 148, 150, 152, 161, 166–68, 170, 191, 194
financials of, 34
liquidity lacking in, 30
Long-Term Capital Management rescue and, 25–26, 69
North American investment banking business of, 118–19
overseas capital sought by, 70–71
stock ownership at, 22
stock price of, 19, 21, 70, 84
toxic assets of, 17–18, 85, 87, 96–97, 100
lending, 202
leverage, 12
economy based on, 21–22
excessive, 12, 21, 46, 114, 190, 206
on housing, 46
leveraging, in real estate, 13
Levin, Carl, 186
Lewis, Donna, 86
Lewis, Ken, 42–43, 85, 99, 215
Lehman and, 17–18, 80–81, 83, 85–86, 96, 106
Merrill Lynch buyout and, 89–90, 103, 110–12
Merrill Lynch fallout and departure of, 152–61
“liar loans,” 36
Liddy, Ed, 123, 180
life insurance, 92
liquidity, 12, 54, 56, 63, 123, 141, 191, 202–3
liquidity factories, 12
Long-Term Capital Management, 25–26, 69
Lynch, Eddie, 107
McCain, John, 113, 135, 139
McCarthy, Callum, 100–101
McCaskell, Claire, 186
McDade, Bart, 119
McDonald, Larry, 27–28, 166
McDonough, William, 25
Mack, John, 16–17, 32–33, 127–31, 147, 165
Madoff, Bernie, 168, 183–84, 212, 214
material adverse change (MAC), 154, 158
MBNA, 43
media:
Everquest scheme outed by, 47
Goldman as target of, 180
Mozilo’s blaming of, 39–40
resentment toward, 166
Thain criticized by, 154–55
Merrill, Charlie, 107–8
Merrill Lynch, 11, 16, 26, 31, 59, 80, 164, 211
Bank of America buyout of, 89–90, 96, 100, 103, 105–6, 107, 110–14, 118, 119–20, 128–29, 134, 152–61, 212, 215
concerns about being next to fall at, 32, 86–87, 88–89, 90
Mother Merrill and core values of, 107–10
toxic assets of, 153, 156
Merrill Lynch International, 108
Middle East, 97, 190
Mitsubishi, 128
Moody’s, 120, 175
moral hazard, 57
Morgan Stanley, 16, 26, 29, 32–33, 59, 89, 119, 124, 147, 175, 212–13
transformation to bank holding company by, 124, 127–31, 165
Morgan Stanley Smith Barney, 163
mortgage-backed securities, 37, 43–44, 47, 92, 153
mortgage-based assets, short-selling of, 44–46
mortgages, 47, 69, 88, 141, 196, 212
adjustable rate (ARMs), 36, 39, 41
nonbank, 36
qualifications for, 36
subprime, see subprime mortgages
Moynihan, Brian, 160–61, 215
Mozilo, Angelo, 39–43
Mudd, Dan, 73–79
Mudd, Roger, 73
naked short-selling, 128
New Century Financial Corporation, 43
New York, N.Y., 54, 135, 182, 190, 203
New York Stock Exchange (NYSE), 3, 10, 18–20, 31, 110, 112, 117, 135, 181, 196–97, 208
New York Times, 180
Niederauer, Duncan, 181
9/11, 14, 118, 204
North Carolina National Bank, 85
North Korea, 207
Northern Rock, 211
Obama, Barack, 23, 135, 142, 143, 184, 200
Jobs Council, 215
Obama administration, 172, 181, 184
Office of Federal Housing Enterprise Oversight (OFHEO), 76
Office of Management and Budget (OMB), 74
Old Lane Partners, 33
O’Neal, Stan, 11, 31, 108–10, 113, 157–58, 164
One Year Later: Reflections from the Street, 164–66
Oppenheimer Funds, 21, 114
Pandit, Vikram, 16, 33–34, 88–89, 129, 161, 163–64, 202–3, 210, 212
Papaconstantinou, Giorgos, 176, 179
Pataki, George, 11
Patterson, Mark, 181
Paulson, Henry “Hank,” 22, 23–24, 135, 147, 192–93
AIG crisis and, 90–92, 122–23
Bear Stearns bailout and, 15, 24, 25, 55, 57–58, 80, 115
Bush meeting of, 131–32
on credit freeze, 46
departure from Treasury of, 151–52, 161
on Fannie Mae, 77, 79
on foreign debt, 172–73
at Goldman Sachs, 23, 89, 91, 180–81, 182
Lehman Brothers crisis and, 16–18, 21, 23, 26–27, 30, 32, 59–60, 68, 79–81, 85, 87, 88–89, 92, 96–97, 100–102, 115, 152, 175, 194
on Morgan Stanley, 129–30
top firms encouraged to share burden by, 32
Paulson, John, 44–46, 182
Paulson Credit Opportunities Fund, 44, 182
Pellegrini, Paolo, 45–46
Perelman, Ronald, 8
“Pick-a-Pay” program, 148
Pimco, 12, 78
popcorn theory, 133–34
Portugal, 175
Prince, Chuck, 31, 33, 140–41, 162, 164
private equity, 8–9
private equity investing, 91
private sector, backstop from, 17, 24, 32
Procter & Gamble, 197
proprietary trading, 195, 200
ProPublica, 149
QE2, 211
Raines, Franklin, 74–76, 79, 164
Rajaratnam, Raj, 214–15
Ranieri, Lewis, 37
Reagan administration, 24, 108
real estate, 13, 146
as bad asset, 63
barriers of entry to, 39–40, 144, 206
boom in, 36, 39
and cracks in industry, 39
crisis in, 94
home foreclosures in, 40
as overleveraged,
13, 46
price increases in, 38
unsustainable prices in, 35, 40, 81
real estate bubble, 13, 35–47
real estate values, 3, 23
recession, 155, 174
Reed, John, 139
Regan, Don, 108
regulators, 39, 165, 194, 204
British, 18, 30, 97, 100
Dodd Amendment, powers of, 169
failure of, 5, 206
re-IPO, 210
Repo 105, 167–68
Republican party, 32, 113, 139, 200, 206–7
resolution authority, 194
retail, decline in, 3
retirement plans, 3, 92, 143, 216
Rise and Fall of Bear Stearns, The (Greenberg), 48
risk management, 165
Rochdale Securities, 201
Rockefeller, John D., 7
Rogers, Jim, 144–45, 164
Rogoff, Kenneth, 137, 171, 173–74
Rose, Charlie, 9, 11
Rubenstein, David, 7, 9, 14, 204
Rubin, Robert, 23, 25, 138, 180
Russia, 93, 172–73, 202, 207
Russo, Tom, 13
Salomon Brothers, 37
Sambol, David, 40, 43
Sandler, Herb, 148–49
Sandler, Marion, 148–49
Saudi Arabia, 162
savings, 216
Schapiro, Mary, 167–68, 184, 198, 203–4, 212
Schumer, Chuck, 17
Schwartz, Alan, 49–51, 53–55
Schwarzman, Christine, 7, 11–12
Schwarzman, Steve, 7, 8, 11–12
Seattle Post Intelligencer, 148
SEC, 16, 24–25, 26, 28, 43, 53, 67, 103, 128, 212
Goldman investigated by, 182, 183–87
inadequate oversight by, 167–69, 183, 198, 203–4
Lehman bankruptcy and, 103–4
regulators at, 35, 104
securities:
illiquid, 124
mortgage-backed, 37
separation of banking from, 5
securities fraud, 43
Senate, U.S., 180
Banking Committee of, 139
Dodd Amendment in, 169
financial reform proposals in, 194, 198–200
Permanent Subcommittee on Investigations of, 186–87
see also Congress, U.S.; House of Representatives, U.S.
service IPOs, 64
740 Park Avenue, 7–8, 9
shareholders, equity of, 107
short-selling, 32, 44–46, 49, 67, 128–29
naked, 128
Sieracki, Eric, 43
60 Minutes, 149
Smith, Winthrop “Win”, Jr., 107–10, 113–14
Smith Barney, 52, 212
solvency, 56
sovereign debt, 171–76
Spain, 175
Speyer, Jerry, 11
Spitzer, Eliot, 49–50, 93
Standard & Poor’s, 120
Stanford University, Hoover Institution at, 189–91
Starr, Cornelius Vander, 93
Steagall, Henry Bascom, 138
Steel, Bob, 147–49, 180
Steinberg, Jonathan, 7, 9
Steinberg, Saul, 7–8
Stewart, Rod, 12
stimulus, economic, 193
stock market:
boom in, 46
confidence lacking in, 169
global concerns and, 178
stock market crash of 1929, 108, 135
stocks, 197
subprime mortgages, 28, 35–38, 39–41, 43–44, 53
crisis in, 73, 79, 108, 148, 177
defaults on, 36–37, 38, 39, 41
Sullivan, Martin, 13, 93–95
Summers, Larry, 138
SunAmerica, 94
Syron, Richard, 77
Taleb, Nassim, 177
taxes, on financial firms, 200
taxpayers, in government bailouts, 5, 57, 115, 155, 174–75
Tea Party libertarians, 207
terrorism, 13
Thain, John, 11, 16, 31–32, 108, 182
Bank of America buyout deal and, 89–90, 96, 103, 106, 110–14
departure from Merrill of, 152–60
fears for Merrill of, 86–87, 88–89
office renovations of, 155, 157–58
tier-three assets, 37
Times (London), 182
Today show, 110, 117, 135
“too big to fail,” 5, 21, 120, 136, 160–61, 169, 174, 190, 194, 200
Tourre, Fabrice, 185–86
toxic assets:
of Fannie Mae and Freddie Mac, 76
of Lehman Brothers, 17–18, 85, 87, 96–97, 100
of Merrill Lynch, 153, 156
Travelers Insurance, 139–40
Treasury Department, U.S., 15, 16, 23–24, 25, 45–47, 55, 58, 68, 78, 88, 91, 104–5, 108, 137, 138, 147, 151–52, 159, 161, 169, 172, 178, 180–81, 182, 196, 199
Troubled Asset Relief Program (TARP), 105, 134–35, 137, 143, 152, 162, 180, 192–93, 201
Trump, Donald, 11
Trump, Melania, 11
UBS Group, 16, 33, 96
unemployment, 17, 166, 176, 211, 214
United Kingdom, see Great Britain
United States, 190
AIG bailout by, 120, 122–23
bailouts by, 5, 136, 143, 161, 164, 172–73, 174–75, 178, 181, 189, 192–93, 207
bailouts for auto companies by, 142
Bear Stearns bailout and, 15, 19, 21, 24, 30, 32, 55, 57, 115
economy of, 113, 204
Lehman not rescued by, 17–18, 27, 29–30, 32, 59, 87–88, 97, 101, 104–5, 115, 119, 123, 152
sovereign debt and, 172–74, 175
stimulus funds to Merrill and Bank of America by, 154–56
U.S. Treasuries, foreign holding of, 172–73
Varley, John, 87, 96–97, 100
Volcker, Paul, 84, 99, 195
Volcker Rule, 195, 200
Wachovia, 114, 134, 147–50, 212
Wall Street, 19, 53
bonuses for, 143–44, 164
borrowing power of, 8
concerns of, 32, 34, 59
conscience of, 191
Depression-era, 138
financial regulations tightened for, 172, 183–84, 194–204
interconnectedness of, 44, 54, 59, 86–87, 88–89, 123, 130, 136, 162, 175
one year after the collapse, 164–66
2008 collapse of, 3–5, 35, 113, 129, 132, 134–35, 164–66, 172, 175, 181–82, 183, 187, 189–91, 197, 204–6
volatility of, 197
Wall Street Journal, 48, 64, 69–71, 109, 172
Walters, Barbara, 11
Ward, John Quincy Adams, 208
Warren, Elizabeth, 193, 212
Washington, D.C., 17, 53, 54, 74, 115, 120, 135, 151, 158, 168, 180, 183, 194
Washington Mutual, 114, 134, 149, 210, 212
Waxman, Henry, 125–26, 141
Weber, Axel, 178, 179
Webman, Jerry, 21–22
Weill, Sandy, 8, 11, 51–53, 94, 139–41, 161–62, 164
Wells Fargo, 149–50, 212
West Wing, The, 132
White, Mary Jo, 160
White House, 137, 140
Whitney, Meredith, 113, 114
Wilkinson, Jim, 18
Willumstad, Bob, 92, 94–95, 120–21, 123, 180
Wolf, Robert, 16, 33, 96
World Economic Forum, 12–13, 156, 171, 173
World Financial Center, 118
Yankee Stadium, 127
Zell, Sam, 8
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