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CBR900RR
TOO BIG TO FAIL (2011)
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We have no intention of dismantling
the regulatory agencies.
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00:00:08,209 --> 00:00:10,210
However,
we must come to grips with...
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00:00:10,211 --> 00:00:12,446
inefficient
and burdensome regulations.
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00:00:12,447 --> 00:00:14,314
We will eliminate those...
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00:00:14,315 --> 00:00:16,267
that are unproductive
and unnecessary.
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00:00:16,551 --> 00:00:18,584
Tearing down
these antiquated walls...
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00:00:18,585 --> 00:00:21,053
and granting banks
significant new authority.
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00:00:21,054 --> 00:00:23,422
In a victory for
the banking industry,
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00:00:23,423 --> 00:00:26,258
Congress has approved
legislation which will allow...
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00:00:26,259 --> 00:00:28,160
commercial and
investment banks to merge...
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00:00:28,161 --> 00:00:30,829
and form institutions
of unprecedented size...
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00:00:30,830 --> 00:00:32,347
and global reach.
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I think it's very important...
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for us not to introduce...
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regulation
for regulation's sake.
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I do believe
in the American dream.
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Owning a home
is a part of that dream.
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We are taking action...
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00:00:51,580 --> 00:00:54,081
to bring many thousands
of Americans...
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closer to owning
a home.
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This project
not only is good...
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00:00:58,352 --> 00:00:59,919
for the soul
of the country.
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It's good for the pocketbook
of the country as well.
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The housing market has reached
frantic proportions.
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00:01:04,823 --> 00:01:08,025
It seems that everybody is
building, buying or selling.
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The Dow and the S&P
both breaking records,
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profits soared 93%
at Goldman Sachs this year.
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Hotshot traders and bankers
can expect to take home...
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10... 25... and in some cases
50 million dollars.
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Things that are too good
to be true, are.
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- When you see something coming...
- The real estate bubble.
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- Housing bubble...
- Bubble.
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Don't put it off.
take action immediately.
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Will there be a soft landing
or will the bubble burst?
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The new story...
the mortgage meltdown.
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This morning in the mortgage meltdown,
new numbers showing...
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that a record number of Americans
are losing their homes.
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More than 70 mortgage companies
have failed...
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00:01:50,663 --> 00:01:52,463
in the last few months
in America.
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00:01:52,464 --> 00:01:55,465
and now the biggest of the big companies...
the Bear Stearns...
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00:01:55,466 --> 00:01:57,883
the big banks are caught
holding the bag.
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The fifth largest
investment bank in the country,
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Bear Stearns,
is being sold
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for just $2 a share
to J.P. Morgan.
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It's being assisted
by the government
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which is stepping in
to guarantee some $30 billion
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00:02:13,484 --> 00:02:16,403
in Bear's toxic
real estate assets.
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00:02:18,756 --> 00:02:21,157
You've got to imagine
that Hank Paulson
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00:02:21,158 --> 00:02:23,493
didn't think
he signed up for this
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00:02:23,494 --> 00:02:25,427
when President Bush
picked him
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to become
Treasury Secretary.
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Hank Paulson
may now have to undo
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some of the deregulation
measures...
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that he and his peers
on Wall Street pushed through
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when he ran Goldman.
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Treasury Secretary
Hank Paulson
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00:02:39,170 --> 00:02:41,171
telling Matt Lauer
this morning
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"We're all over it. I've got
great confidence in our markets.
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They're resilient.
They're flexible".
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Ali, the truth is
that Bear Stearns is...
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00:02:48,245 --> 00:02:50,913
only a very small fraction
of this story.
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our economy
could face
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00:02:52,915 --> 00:02:55,467
far worse
than a recession.
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00:02:57,620 --> 00:02:59,921
In the wake of
Bear's collapse,
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00:02:59,922 --> 00:03:02,524
Lehman Brothers is scrambling
to reassure investors
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00:03:02,525 --> 00:03:04,826
about the impact
of the mortgage crisis
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00:03:04,827 --> 00:03:06,627
on its own assets,
shares of the firm
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00:03:06,628 --> 00:03:08,463
under a great deal
of pressure this morning.
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00:03:08,464 --> 00:03:11,633
Dick Fuld, a 39-year veteran
of Lehman...
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and the longest-running CEO of a
major investment bank on Wall Street,
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00:03:14,837 --> 00:03:18,805
has pulled the firm back from
the brink during other crises.
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00:03:18,806 --> 00:03:21,474
But today, for the first time
that I'm hearing it,
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00:03:21,475 --> 00:03:24,210
investors are questioning
his leadership.
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- Motherfucker.
- One key question...
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investors have
for Lehman Brothers:
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What's the true earnings power
of this investment bank's business?
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Hey.
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Get up here.
We gotta start stacking sandbags.
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What are you
talking about?
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00:03:44,530 --> 00:03:47,097
We're down 21%.
On paper,
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I just lost 90 million dollars
personally.
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With investors pummeling
Lehman shares,
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00:03:53,203 --> 00:03:55,271
the big question
this morning is...
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00:03:55,272 --> 00:03:57,272
what options
does Fuld have?
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00:03:57,273 --> 00:03:59,641
So far he has failed
to raise new capital...
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00:03:59,642 --> 00:04:02,310
while virtually all of his
rivals have already done so.
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00:04:02,311 --> 00:04:04,711
And now hedge fund manager
David Einhorn...
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00:04:04,712 --> 00:04:07,248
is publicly questioning the accuracy
of the firm's numbers.
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00:04:07,249 --> 00:04:08,415
Anything good?
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00:04:08,416 --> 00:04:12,618
It's a red-tailed hawk,
the first one this year.
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00:04:12,619 --> 00:04:14,185
Dick Fuld's on one.
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They haven't been able
to provide credible answers.
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00:04:16,421 --> 00:04:18,456
So let's go through
a couple of those...
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00:04:18,457 --> 00:04:20,741
what you call
discrepancies, because...
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00:04:24,128 --> 00:04:25,594
Tough morning?
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00:04:25,595 --> 00:04:28,596
We show top-quality earnings.
We beat every prediction.
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00:04:28,597 --> 00:04:30,864
- Yeah.
- It's the damn short-sellers.
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00:04:30,865 --> 00:04:32,933
You know the game...
short and distort.
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00:04:32,934 --> 00:04:35,803
They're rumormongers.
And they're making a killing.
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00:04:35,804 --> 00:04:37,905
What are your plans
for a capital raise?
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00:04:37,906 --> 00:04:41,541
We're way ahead of you.
Now let me be clear:
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we don't need the cash.
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You know,
it's about perception.
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00:04:47,914 --> 00:04:49,615
Buffett, Buffett.
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00:04:49,616 --> 00:04:53,551
We're thinking of reaching out
to Warren Buffett.
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Great.
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00:04:54,552 --> 00:04:58,354
You and Buffett
go back, right?
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Do me a favor
and call him.
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00:05:00,891 --> 00:05:03,059
Tell him
Lehman is rock solid.
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00:05:03,060 --> 00:05:07,213
As Treasury Secretary, I can't
advocate for a specific investment.
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00:05:09,899 --> 00:05:15,102
Hank, you want me
to raise capital or not?
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Lehman Brothers is a hell of
a lot bigger than Bear Stearns.
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The market
is terrified.
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00:05:20,141 --> 00:05:22,876
When I was running Goldman,
I never even conceived
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00:05:22,877 --> 00:05:25,611
of asking the Treasury Secretary
to cut a deal for me.
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00:05:25,612 --> 00:05:27,078
Yeah, but the Bear
bailout created...
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00:05:27,079 --> 00:05:28,446
Please don't call it
a bailout.
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00:05:28,447 --> 00:05:32,483
Okay, the very large Bear Stearns
purchase assistance package
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00:05:32,484 --> 00:05:34,486
created an expectation.
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00:05:34,487 --> 00:05:36,354
Fuld's counting on direct
intervention from you.
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00:05:36,355 --> 00:05:38,723
Uh, Buffett's
a simple solution.
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00:05:38,724 --> 00:05:41,826
I think
you make the call.
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00:05:41,827 --> 00:05:44,161
As what?
Warren's friend?
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00:05:44,162 --> 00:05:46,713
His former banker?
The Treasury Secretary?
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00:05:46,798 --> 00:05:49,198
No.
Fuld's calling him.
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00:05:49,199 --> 00:05:51,066
Hopefully he'll jump in
and we can all relax.
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00:05:51,067 --> 00:05:53,068
Relax? We just buried
one investment bank.
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00:05:53,069 --> 00:05:55,104
We got another one
that's barely breathing.
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00:05:55,105 --> 00:05:57,806
This is a confidence game.
People lose faith in Lehman...
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00:05:57,807 --> 00:05:59,807
these banks are gonna
drop like dominos...
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00:05:59,808 --> 00:06:02,911
and I don't have the authority
to do a thing about it.
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00:06:02,912 --> 00:06:04,880
We're late.
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00:06:04,881 --> 00:06:06,814
We've been late
on everything.
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00:06:06,815 --> 00:06:09,783
Neel's team is working on some
kind of a disaster scenario.
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00:06:09,784 --> 00:06:11,685
We're calling it
the break-the-glass plan...
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00:06:11,686 --> 00:06:14,354
what to ask Congress for
if your back's against the wall.
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00:06:14,355 --> 00:06:15,871
Money...
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00:06:16,756 --> 00:06:19,591
Is what you
ask them for.
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00:06:19,592 --> 00:06:23,027
The problem is,
Congress won't move
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00:06:23,028 --> 00:06:24,829
until we've already
hit the iceberg,
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00:06:24,830 --> 00:06:26,397
and at that point
it may be too late.
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00:06:26,398 --> 00:06:28,399
So you're saying,
with the full weight
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00:06:28,400 --> 00:06:31,003
of the United States Treasury
behind me,
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00:06:31,004 --> 00:06:34,772
all I can do is
call Warren Buffett?
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00:06:34,773 --> 00:06:38,742
Hi, Warren.
It's Hank.
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00:06:38,743 --> 00:06:41,511
I understand you've been
talking to Dick Fuld.
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00:06:41,512 --> 00:06:44,213
You know my
misgivings, Hank,
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00:06:44,214 --> 00:06:47,049
about investment banks.
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00:06:47,050 --> 00:06:49,784
As soon as they started
trading for themselves,
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00:06:49,785 --> 00:06:51,852
the risk managers
lost control.
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I had a very unpleasant time
with Solomon Brothers.
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That's fair enough.
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00:06:57,858 --> 00:06:59,493
But we both know
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00:06:59,494 --> 00:07:02,128
that investment banking
is a profitable business.
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00:07:02,129 --> 00:07:05,764
I figure it made you
a billionaire somewhat.
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00:07:05,765 --> 00:07:08,233
I gotta believe that
if the price was right,
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00:07:08,234 --> 00:07:09,969
you wouldn't
just walk away.
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You know a good deal
when you see one.
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00:07:12,706 --> 00:07:14,673
What say you?
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00:07:14,674 --> 00:07:17,459
I gotta leave that
to your judgment.
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00:07:18,477 --> 00:07:20,545
People act like
we're crack dealers.
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Nobody put a gun
to anybody's head and said,
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00:07:22,547 --> 00:07:24,448
"hey, Nimrod, buy a house
you can't afford.
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00:07:24,449 --> 00:07:26,183
And you know what?
While you're at it,
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00:07:26,184 --> 00:07:28,285
put a line of credit on that baby
and buy yourself a boat".
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00:07:28,286 --> 00:07:30,954
You heard anything
from Buffett?
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He's asking for
preferred shares at 40
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00:07:33,624 --> 00:07:35,458
with a dividend
of 9%.
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00:07:35,459 --> 00:07:37,959
We were just at 66.
What the fuck?
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00:07:37,960 --> 00:07:39,994
Maybe it's just
an opening gambit, Dick.
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Sounds more like
a goddamn insult.
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- Let me get that, Dick.
- Thank you.
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00:07:43,198 --> 00:07:44,898
We're at 36 right now.
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00:07:44,899 --> 00:07:48,334
We haven't been anywhere
near 66 in months.
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The markets
like Buffett.
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00:07:50,337 --> 00:07:52,104
His name will push
the price up overnight.
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00:07:52,105 --> 00:07:54,106
You know, I don't care
who he is,
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00:07:54,107 --> 00:07:56,909
I am not spending
$360 million a year
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00:07:56,910 --> 00:07:58,711
for the pleasure of doing
business with him.
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00:07:58,712 --> 00:07:59,879
Real estate
will come back.
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00:07:59,880 --> 00:08:01,514
The Koreans have been
sniffing around.
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00:08:01,515 --> 00:08:03,382
There you go.
And they won't steal us blind.
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00:08:03,383 --> 00:08:06,251
I've seen this before...
C.E.O.s panic and they sell out cheap.
185
00:08:06,252 --> 00:08:09,019
Right now the street's running
around with its hair on fire,
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00:08:09,020 --> 00:08:11,121
but the storm
always passes.
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00:08:11,122 --> 00:08:13,356
We stand strong,
and on the other side
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00:08:13,357 --> 00:08:15,741
we'll eat
Goldman's lunch.
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00:08:18,027 --> 00:08:19,761
So what do we do
about Buffett?
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00:08:19,762 --> 00:08:22,513
Screw Warren Buffett.
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00:08:24,400 --> 00:08:26,668
He passed?
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00:08:26,669 --> 00:08:28,603
Lehman dropped to 28 and 1/2
this morning.
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00:08:28,604 --> 00:08:30,038
What in the world
is he thinking?
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00:08:30,039 --> 00:08:31,873
He's not thinking.
He's delusional.
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00:08:31,874 --> 00:08:33,741
He thought the ask
was too high.
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00:08:33,742 --> 00:08:36,576
He's got to raise cash.
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00:08:36,577 --> 00:08:38,445
I told him that.
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00:08:38,446 --> 00:08:41,147
I spoke to Greenspan.
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00:08:41,148 --> 00:08:42,648
Really?
200
00:08:42,649 --> 00:08:45,184
He says there's too much
housing supply.
201
00:08:45,185 --> 00:08:48,320
That's the problem.
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00:08:48,321 --> 00:08:51,956
So we should buy up
all the vacant houses...
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00:08:51,957 --> 00:08:54,809
and burn them.
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00:08:59,997 --> 00:09:03,766
Dick needs a buyer...
someone with a grip on reality.
205
00:09:03,767 --> 00:09:06,035
Barclays expressed some interest
a couple of months ago,
206
00:09:06,036 --> 00:09:07,936
But I don't think
the price is low enough for them.
207
00:09:07,937 --> 00:09:09,872
Bank of America?
208
00:09:09,873 --> 00:09:13,042
Possible. Dick's put out
feelers there before.
209
00:09:13,043 --> 00:09:15,611
We have to keep it
quiet though.
210
00:09:15,612 --> 00:09:17,846
If anyone hears that
they're trying to sell...
211
00:09:17,847 --> 00:09:20,982
Lehman will be dead
within the hour.
212
00:09:20,983 --> 00:09:23,686
The real estate investments
are killing the firm.
213
00:09:23,687 --> 00:09:26,289
We have to admit publically
we've made some mistakes.
214
00:09:26,290 --> 00:09:28,524
We need to make
a senior management change,
215
00:09:28,525 --> 00:09:30,626
Signal to the market
that we get it.
216
00:09:30,627 --> 00:09:33,028
Meaning what?
217
00:09:33,029 --> 00:09:35,263
Meaning Joe Gregory.
218
00:09:35,264 --> 00:09:37,881
Get the fuck
out of here.
219
00:09:39,167 --> 00:09:41,701
You are not gonna tell me
how to run my company.
220
00:09:41,702 --> 00:09:44,504
Joe hasn't had your back on risk,
and everyone knows it.
221
00:09:44,505 --> 00:09:46,172
Erin Callan's
gotta go too.
222
00:09:46,173 --> 00:09:48,240
As far as the street's
concerned, she's a joke.
223
00:09:48,241 --> 00:09:50,276
Joe Gregory has been
with me
224
00:09:50,277 --> 00:09:53,345
for 30 years.
225
00:09:53,346 --> 00:09:55,347
And you want me
to kick him to the curb
226
00:09:55,348 --> 00:09:56,915
because we have
a bad quarter?
227
00:09:56,916 --> 00:09:58,550
It's not just
a bad quarter.
228
00:09:58,551 --> 00:10:00,518
The stock hit 23.
229
00:10:00,519 --> 00:10:04,120
23. Most of our guys are
paid in stock they can't sell for years.
230
00:10:04,121 --> 00:10:07,090
They've lost most of their net worth
over the last six months.
231
00:10:07,091 --> 00:10:09,091
You don't stabilize
the price,
232
00:10:09,092 --> 00:10:11,059
Your traders
are gonna jump ship.
233
00:10:11,060 --> 00:10:12,894
Selfish fucks.
234
00:10:12,895 --> 00:10:15,129
It's not just bankers
and traders, Dick.
235
00:10:15,130 --> 00:10:16,797
Clients are pulling
their money.
236
00:10:16,798 --> 00:10:19,117
There's gonna be a run
on this bank.
237
00:10:23,172 --> 00:10:25,272
Sources tell CNBC
that both
238
00:10:25,273 --> 00:10:28,810
Erin Callan and Joseph Gregory
are out at Lehman Brothers.
239
00:10:28,811 --> 00:10:31,312
In a statement, the company's
chairman Dick Fuld said
240
00:10:31,313 --> 00:10:34,114
Replacing Gregory with
48-year-old Bart McDade
241
00:10:34,115 --> 00:10:37,534
has been one of the most
difficult decisions he's had to make.
242
00:10:39,152 --> 00:10:42,420
Dick, the Koreans just
arrived at Sullivan.
243
00:10:42,421 --> 00:10:44,522
Let's make this happen.
244
00:10:44,523 --> 00:10:47,843
My take is you'd be better off
staying here for now.
245
00:10:49,229 --> 00:10:51,196
We need you to be
our missing man.
246
00:10:51,197 --> 00:10:54,132
We'll go in and push
the deal as far as we can,
247
00:10:54,133 --> 00:10:57,902
And then we'll bring you in
at the end to top it off.
248
00:10:57,903 --> 00:10:59,136
All right, fine.
249
00:10:59,137 --> 00:11:02,021
Okay.
250
00:11:07,511 --> 00:11:10,395
We are committed
to our presence in New York.
251
00:11:12,481 --> 00:11:15,867
But we need to know that the
underlying numbers make sense.
252
00:11:18,554 --> 00:11:20,488
We realize
how things look.
253
00:11:20,489 --> 00:11:23,923
But our stock is getting
hammered by the shorts.
254
00:11:23,924 --> 00:11:26,075
The value
is still there.
255
00:11:27,494 --> 00:11:29,729
We just started.
Min is excited,
256
00:11:29,730 --> 00:11:31,430
but we haven't heard
the terms.
257
00:11:31,431 --> 00:11:34,033
Where are you?
258
00:11:34,034 --> 00:11:35,701
I just stepped out
to take the call.
259
00:11:35,702 --> 00:11:38,237
Get back in there.
Don't be rude.
260
00:11:38,238 --> 00:11:40,156
Okay.
261
00:11:41,475 --> 00:11:44,378
We simply take the assets
you don't find appealing,
262
00:11:44,379 --> 00:11:47,531
spin them off
into a separate company.
263
00:11:49,251 --> 00:11:51,986
- You don't buy that bank.
- I'm very sorry.
264
00:11:51,987 --> 00:11:55,539
You buy the good bank.
265
00:11:56,524 --> 00:11:58,423
They don't like
the real estate.
266
00:11:58,424 --> 00:11:59,857
What do you mean,
they don't like it?
267
00:11:59,858 --> 00:12:01,859
Dick, we're making
real progress here, okay?
268
00:12:01,860 --> 00:12:03,877
Let me stay on it
for now.
269
00:12:19,511 --> 00:12:21,912
Min, how are you?
270
00:12:21,913 --> 00:12:24,348
Great to see you.
271
00:12:24,349 --> 00:12:26,917
I don't want
to interrupt.
272
00:12:26,918 --> 00:12:28,852
Dick, great timing.
273
00:12:28,853 --> 00:12:31,922
We seem to be in sync on the
broad strokes of the deal.
274
00:12:31,923 --> 00:12:34,424
Shall we get back
to the letter of intent?
275
00:12:34,425 --> 00:12:36,693
Min, I have to
tell you,
276
00:12:36,694 --> 00:12:39,395
I think you're making
a big mistake here.
277
00:12:39,396 --> 00:12:42,065
There's great value
in the real estate assets.
278
00:12:42,066 --> 00:12:45,233
How about we walk
through the portfolio
279
00:12:45,234 --> 00:12:47,719
and I'll show you?
280
00:12:49,271 --> 00:12:51,606
We have looked at them.
281
00:12:51,607 --> 00:12:53,541
Well, then you...
282
00:12:53,542 --> 00:12:55,710
you must have looked at them
in the wrong way.
283
00:12:55,711 --> 00:12:59,412
I just don't want to see you
leave money on the table.
284
00:12:59,413 --> 00:13:01,798
Perhaps we should
take a break.
285
00:13:08,023 --> 00:13:10,158
Min, I'm so sorry.
286
00:13:10,159 --> 00:13:12,160
We have negotiated
in good faith.
287
00:13:12,161 --> 00:13:14,394
Now all of a sudden
we are going backward?
288
00:13:14,395 --> 00:13:15,995
We can work with you
on the price.
289
00:13:15,996 --> 00:13:17,929
It is not about
the price.
290
00:13:17,930 --> 00:13:21,181
It is about the way
you have conducted this.
291
00:13:26,635 --> 00:13:30,271
I'd like to thank you,
all of you,
292
00:13:30,272 --> 00:13:33,290
but I don't think we have
a structure that works.
293
00:13:39,413 --> 00:13:41,483
What, that's it?
294
00:13:41,484 --> 00:13:43,699
You're just gonna pack up
and go back to Korea?
295
00:13:57,028 --> 00:13:59,163
- Hello.
- Neel, it's Dick Fuld.
296
00:13:59,164 --> 00:14:02,199
Listen, you know,
297
00:14:02,200 --> 00:14:04,101
if Hank wants me
to find a buyer,
298
00:14:04,102 --> 00:14:05,836
you guys need
to step up and help.
299
00:14:05,837 --> 00:14:08,173
The Koreans just
walked out, okay?
300
00:14:08,174 --> 00:14:10,175
Look, I'm just speaking
for myself here,
301
00:14:10,176 --> 00:14:12,778
but I think you need to do
what's right for the firm.
302
00:14:12,779 --> 00:14:14,413
Do what's right?
303
00:14:14,414 --> 00:14:16,148
What is that supposed
to mean?
304
00:14:16,149 --> 00:14:18,116
If your stock price
keeps sliding,
305
00:14:18,117 --> 00:14:21,153
you may get an offer at a price
that doesn't look all that compelling,
306
00:14:21,154 --> 00:14:23,989
but you may have to take it just
to keep the company intact.
307
00:14:23,990 --> 00:14:25,824
What kind of price
are you talking about?
308
00:14:25,825 --> 00:14:27,458
Could be...
309
00:14:27,459 --> 00:14:30,077
I mean, it might be
low single digits.
310
00:14:31,797 --> 00:14:34,265
Last February
311
00:14:34,266 --> 00:14:37,669
we were
at 66 a share.
312
00:14:37,670 --> 00:14:42,175
Lehman Brothers is not
bear stearns.
313
00:14:42,176 --> 00:14:44,010
We've got
a great business.
314
00:14:44,011 --> 00:14:45,911
Real estate's gonna
come back.
315
00:14:45,912 --> 00:14:49,147
I am not fucking
giving this company away!
316
00:14:49,148 --> 00:14:50,688
While the real estate market
317
00:14:50,689 --> 00:14:52,218
has put Lehman Brothers shares
under pressure,
318
00:14:52,219 --> 00:14:54,553
mortgage giants Fannie Mae
and Freddie Mac stocks
319
00:14:54,554 --> 00:14:57,122
are suddenly plummeting
this morning after reports
320
00:14:57,123 --> 00:14:59,859
the companies may need
to raise $75 billion
321
00:14:59,860 --> 00:15:03,062
just to remain solvent.
Because they guarantee
322
00:15:03,063 --> 00:15:05,500
such an enormous percentage
of the nation's mortgages,
323
00:15:05,501 --> 00:15:07,702
there is renewed speculation
that the government
324
00:15:07,703 --> 00:15:09,370
may have to step in
and take them over...
325
00:15:09,371 --> 00:15:13,740
a possibility Barack Obama has
now raised on the campaign trail.
326
00:15:13,741 --> 00:15:16,076
If Fannie Mae and
Freddie Mac collapsed,
327
00:15:16,077 --> 00:15:19,813
then probably
the financial system
328
00:15:19,814 --> 00:15:22,248
would receive
such a body blow
329
00:15:22,249 --> 00:15:24,851
that it could be
disastrous.
330
00:15:24,852 --> 00:15:27,286
Freddie just
dropped another 8%.
331
00:15:27,287 --> 00:15:29,755
Fannie's down 5%.
332
00:15:29,756 --> 00:15:32,625
There's... there's no
bottom here.
333
00:15:32,626 --> 00:15:35,861
We need to do
something now.
334
00:15:35,862 --> 00:15:37,829
We're working on
a proposal for Congress,
335
00:15:37,830 --> 00:15:40,365
see if we can get the authority
to put some money in.
336
00:15:40,366 --> 00:15:42,400
I'd rather not go
that way,
337
00:15:42,401 --> 00:15:44,701
but if we get there...
338
00:15:44,702 --> 00:15:47,720
Uh, I think...
I think we're already there.
339
00:15:49,372 --> 00:15:51,139
How much are you
gonna ask for?
340
00:15:51,140 --> 00:15:52,774
A blank check.
341
00:15:52,775 --> 00:15:56,177
It has to be enough of a statement
to reassure the market.
342
00:15:56,178 --> 00:16:00,081
They need to think I've got
a bazooka in my pocket.
343
00:16:00,082 --> 00:16:02,084
I'm not saying
that we use it,
344
00:16:02,085 --> 00:16:04,086
but if we have
the authority,
345
00:16:04,087 --> 00:16:06,087
everyone who's dumping
their shares
346
00:16:06,088 --> 00:16:08,156
will calm down,
back off.
347
00:16:08,157 --> 00:16:10,157
Okay, well, if you're
going to Congress,
348
00:16:10,158 --> 00:16:11,925
why don't we give
to the banks too?
349
00:16:11,926 --> 00:16:14,193
'Cause Lehman is looking like shit
and Merrill's not far behind.
350
00:16:14,194 --> 00:16:17,029
We'll be lucky to get them to move
on Fannie and Freddie.
351
00:16:17,030 --> 00:16:19,548
We do what we can do.
352
00:16:30,341 --> 00:16:32,841
Secretary, Mrs. Paulson,
over here.
353
00:16:32,842 --> 00:16:35,910
Over here, please.
354
00:16:35,911 --> 00:16:38,480
Mr. and Mrs. Paulson.
355
00:16:38,481 --> 00:16:42,518
- Secretary Paulson.
- Mrs. Paulson. Thank you.
356
00:16:42,519 --> 00:16:44,220
Mrs. Paulson.
357
00:16:44,221 --> 00:16:46,088
Mr. Paulson.
358
00:16:46,089 --> 00:16:48,740
Mr. and Mrs. Paulson,
this way, please.
359
00:16:52,159 --> 00:16:54,226
Mr. Secretary, please.
360
00:16:54,227 --> 00:16:56,212
I got her.
361
00:16:57,631 --> 00:17:00,033
Right over here,
Secretary Paulson, please.
362
00:17:00,034 --> 00:17:01,935
Big smile.
Thank you.
363
00:17:01,936 --> 00:17:04,503
That's just what I need...
press photos
364
00:17:04,504 --> 00:17:07,137
of the Treasury Secretary
waving the Chinese flag.
365
00:17:07,138 --> 00:17:09,672
Paulson the Communist.
366
00:17:09,673 --> 00:17:12,641
The look on your face
was priceless.
367
00:17:12,642 --> 00:17:17,297
Hank, I must ask you
about Fannie and Freddie.
368
00:17:19,550 --> 00:17:21,852
We have hundreds
of billions invested.
369
00:17:21,853 --> 00:17:24,922
You've assured us
the investment is safe.
370
00:17:24,923 --> 00:17:27,791
And it is,
absolutely.
371
00:17:27,792 --> 00:17:31,795
We're watching a great deal
of our money disappear.
372
00:17:31,796 --> 00:17:34,231
Share prices
have dropped 60%
373
00:17:34,232 --> 00:17:36,333
in the last
two months.
374
00:17:36,334 --> 00:17:39,069
Carrying your bazooka around
has not helped matters.
375
00:17:39,070 --> 00:17:41,571
Congress gave you
the power.
376
00:17:41,572 --> 00:17:43,372
Perhaps it is time
to use it.
377
00:17:43,373 --> 00:17:45,307
The market
will stabilize.
378
00:17:45,308 --> 00:17:47,209
We just have
to give it some time.
379
00:17:47,210 --> 00:17:51,079
There was an approach
last month from Russia.
380
00:17:51,080 --> 00:17:53,348
They have
considerable holdings
381
00:17:53,349 --> 00:17:55,049
in Fannie and Freddie
as well.
382
00:17:55,050 --> 00:17:57,886
They suggested
we coordinate
383
00:17:57,887 --> 00:17:59,954
and without warning dump
hundreds of billions
384
00:17:59,955 --> 00:18:02,439
of Fannie and Freddie's bonds
onto the market.
385
00:18:04,659 --> 00:18:06,360
That would be...
386
00:18:06,361 --> 00:18:08,395
Yes.
387
00:18:08,396 --> 00:18:11,464
The amount of debt
your country carries
388
00:18:11,465 --> 00:18:14,450
is a terrible
vulnerability.
389
00:18:18,270 --> 00:18:19,504
But you...
390
00:18:19,505 --> 00:18:22,923
we declined
respectfully.
391
00:18:25,177 --> 00:18:27,278
Even in the U.S.
it seems
392
00:18:27,279 --> 00:18:30,948
the relationship between the
government and private industry
393
00:18:30,949 --> 00:18:33,299
isn't so simple.
394
00:18:36,253 --> 00:18:37,953
Was it a threat?
395
00:18:37,954 --> 00:18:41,457
No no, it was
a friendly reminder
396
00:18:41,458 --> 00:18:43,459
that with a single
phone call to Moscow
397
00:18:43,460 --> 00:18:46,011
they can take down
the entire U.S. economy.
398
00:18:53,537 --> 00:18:56,205
Well, the book says
399
00:18:56,206 --> 00:18:58,274
Fannie and Freddie
are a nightmare.
400
00:18:58,275 --> 00:19:00,609
They are in the hole easily
tens of billions of dollars.
401
00:19:00,610 --> 00:19:03,412
In another few weeks they're
gonna start defaulting on their debts.
402
00:19:03,413 --> 00:19:04,913
We're gonna have to
step in.
403
00:19:04,914 --> 00:19:08,166
I don't see
how we can avoid it.
404
00:19:09,686 --> 00:19:11,820
Turns out a bazooka's
not that useful
405
00:19:11,821 --> 00:19:13,772
unless you fire it.
406
00:19:15,291 --> 00:19:17,425
Lehman's down
another 10%.
407
00:19:17,426 --> 00:19:19,860
You are not gonna let me
get down a single bite, are you?
408
00:19:19,861 --> 00:19:21,429
That's why
I have oatmeal.
409
00:19:21,430 --> 00:19:24,132
Dick is trotting around the world
with his head in his hands
410
00:19:24,133 --> 00:19:25,934
and no one will
give him any money.
411
00:19:25,935 --> 00:19:28,236
Korea walked out on him.
Mexico told him to shove it.
412
00:19:28,237 --> 00:19:30,438
No one's interested.
All the dumb money's already in.
413
00:19:30,439 --> 00:19:32,307
What about B of A?
Are they still in the mix?
414
00:19:32,308 --> 00:19:34,709
And Barclays is
sniffing around again,
415
00:19:34,710 --> 00:19:36,577
now that they think
it's a fire sale.
416
00:19:36,578 --> 00:19:37,945
That's promising.
417
00:19:37,946 --> 00:19:39,881
I don't know.
The British...
418
00:19:39,882 --> 00:19:43,584
they do a lot of talking.
They never close.
419
00:19:43,585 --> 00:19:45,720
B of A is still
our best bet.
420
00:19:45,721 --> 00:19:47,255
This can't be
another Bear.
421
00:19:47,256 --> 00:19:48,404
Absolutely not.
422
00:19:48,405 --> 00:19:50,225
They want Lehman...
they buy it outright.
423
00:19:50,226 --> 00:19:51,994
But they may need
a little hand-holding.
424
00:19:51,995 --> 00:19:54,530
They just bought Countrywide.
They're spread a little thin.
425
00:19:54,531 --> 00:19:56,431
You may have to
give them a break
426
00:19:56,432 --> 00:19:58,166
with the capital
requirements.
427
00:19:58,167 --> 00:20:01,336
You want me to allow them
to raise their leverage
428
00:20:01,337 --> 00:20:03,872
so they can buy a bank
that's about to fail
429
00:20:03,873 --> 00:20:06,074
because it was
overleveraged?
430
00:20:06,075 --> 00:20:09,077
You got a better idea?
431
00:20:09,078 --> 00:20:12,214
Breaking news just coming in:
Sources telling CNBC
432
00:20:12,215 --> 00:20:14,450
that the government
has just taken control
433
00:20:14,451 --> 00:20:16,719
of Fannie Mae
and Freddie Mac.
434
00:20:16,720 --> 00:20:18,723
Back in July, you remember,
Hank Paulson said
435
00:20:18,724 --> 00:20:20,725
that he wanted
the power to step in,
436
00:20:20,726 --> 00:20:22,561
but he probably
wouldn't use it.
437
00:20:22,562 --> 00:20:24,363
It certainly sounds
like Paulson
438
00:20:24,364 --> 00:20:26,032
just pulled the trigger
on that bazooka.
439
00:20:26,033 --> 00:20:28,268
Despite the move nationalize
Fannie and Freddie,
440
00:20:28,269 --> 00:20:31,471
the market is still in negative
territory across the board.
441
00:20:31,472 --> 00:20:34,775
Investors now focusing their attention
on Lehman Brothers
442
00:20:34,776 --> 00:20:37,877
amid fresh reports that the nation's
fourth largest investment bank
443
00:20:37,878 --> 00:20:40,179
may be on the brink
of bankruptcy.
444
00:20:40,180 --> 00:20:42,481
- Rodge.
- Chris.
445
00:20:42,482 --> 00:20:45,198
Bring your money
today, huh?
446
00:20:47,783 --> 00:20:51,184
Make sure Fuld's not keeping
any bad news out of the mix.
447
00:20:51,185 --> 00:20:54,286
It's open kimono,
to quote Dick.
448
00:20:54,287 --> 00:20:57,071
There's a revolting image.
449
00:20:59,524 --> 00:21:02,392
Did you get a look
at the numbers?
450
00:21:02,393 --> 00:21:04,027
The real estate's
the issue.
451
00:21:04,028 --> 00:21:06,030
They got it marked
at $30 billion.
452
00:21:06,031 --> 00:21:08,065
It's worth maybe
half of that.
453
00:21:08,066 --> 00:21:10,000
Don't look so nervous.
454
00:21:10,001 --> 00:21:13,170
You're about to get a Wall Street
bank for the price of a hot dog.
455
00:21:13,171 --> 00:21:16,674
I know that Paulson told Ken Lewis
that he's not gonna pay for this.
456
00:21:16,675 --> 00:21:18,376
And I don't see
how we can do it
457
00:21:18,377 --> 00:21:20,478
unless the government takes
some of the downside.
458
00:21:20,479 --> 00:21:22,246
Paulson is posturing.
459
00:21:22,247 --> 00:21:23,948
He'll write a check
just like he did
460
00:21:23,949 --> 00:21:25,583
for Jamie Dimon
on the Bear deal.
461
00:21:25,584 --> 00:21:27,066
He has to.
He can't lose
462
00:21:27,067 --> 00:21:29,386
another major bank
in an election year.
463
00:21:29,387 --> 00:21:31,388
Besides,
the guy made, like,
464
00:21:31,389 --> 00:21:33,590
a half a billion bucks
at Goldman Sachs.
465
00:21:33,591 --> 00:21:36,660
He lets Lehman die...
Goldman's biggest competitor...
466
00:21:36,661 --> 00:21:38,929
makes him look like
he's still working for Goldman,
467
00:21:38,930 --> 00:21:42,082
he's just doing it
out of the desk at Treasury.
468
00:21:43,568 --> 00:21:46,938
Where are the donuts?
469
00:21:46,939 --> 00:21:49,407
Exactly. If you're the CEO
of one of these financial firms,
470
00:21:49,408 --> 00:21:51,977
you've already seen what the
government was willing to do.
471
00:21:51,978 --> 00:21:54,346
Why wouldn't you play
chicken with them and say,
472
00:21:54,347 --> 00:21:57,850
"Sure I'll help you out.
But you gotta throw in a sweetener,
473
00:21:57,851 --> 00:21:59,769
just like you did
for those guys"?
474
00:22:01,288 --> 00:22:04,257
They just assume
I'm gonna bail out Dick Fuld...
475
00:22:04,258 --> 00:22:07,426
like I'm the guy behind the
elephant with the shovel.
476
00:22:07,427 --> 00:22:09,395
They're all drawing
a line from Bear
477
00:22:09,396 --> 00:22:11,296
and Fannie and Freddie
right to Lehman.
478
00:22:11,297 --> 00:22:13,131
There's no way the taxpayers
are gonna go for another bailout...
479
00:22:13,132 --> 00:22:15,767
A very large
purchase assistance package.
480
00:22:15,768 --> 00:22:18,937
We need to come up with
a private-sector solution,
481
00:22:18,938 --> 00:22:21,272
get the investment banks
to bridge the gap.
482
00:22:21,273 --> 00:22:23,106
Okay, but that's
never gonna work,
483
00:22:23,107 --> 00:22:25,008
unless they believe
that you've drawn a line.
484
00:22:25,009 --> 00:22:28,527
I know you don't like leaking,
but let us reach out to the press.
485
00:22:34,449 --> 00:22:36,033
Okay.
486
00:22:38,252 --> 00:22:40,453
Mr. Flowers,
487
00:22:40,454 --> 00:22:42,857
there's a call for you...
Bob Willumstad from A.I.G.
488
00:22:42,858 --> 00:22:45,275
He's very insistent.
489
00:22:50,197 --> 00:22:52,365
Mr. Flowers.
490
00:22:52,366 --> 00:22:54,733
My people tell me
you're the man to talk to.
491
00:22:54,734 --> 00:22:56,267
We've got a real
problem here.
492
00:22:56,268 --> 00:22:57,835
Yeah? What kind
of problem?
493
00:22:57,836 --> 00:23:01,105
It looks very much like we are
about to run out of cash.
494
00:23:01,106 --> 00:23:02,540
A.I.G.?
495
00:23:02,541 --> 00:23:04,642
We've sent over a document.
It's a spreadsheet.
496
00:23:04,643 --> 00:23:07,544
It's confidential, of course,
but it might give you some insight.
497
00:23:07,545 --> 00:23:10,214
I'm in the middle of Lehman.
I'm working with B of A.
498
00:23:10,215 --> 00:23:13,117
Is there any way
you could come over tomorrow?
499
00:23:13,118 --> 00:23:15,219
I'll take a look
at the numbers
500
00:23:15,220 --> 00:23:17,504
and we'll talk.
501
00:23:22,494 --> 00:23:24,812
Mr. Flowers.
502
00:23:28,067 --> 00:23:29,801
Somebody put
the TV on.
503
00:23:29,802 --> 00:23:32,387
CNBC's talking
about Lehman.
504
00:23:36,909 --> 00:23:40,213
...Person familiar
with Paulson's...
505
00:23:40,214 --> 00:23:42,382
Treasury Secretary
Hank Paulson's thinking,
506
00:23:42,383 --> 00:23:44,917
and he is saying there will
be no government money
507
00:23:44,918 --> 00:23:47,219
in the resolution
of this situation.
508
00:23:47,220 --> 00:23:49,889
They're saying two things
make the Lehman deal different:
509
00:23:49,890 --> 00:23:52,091
The market's been aware
and had time to prepare
510
00:23:52,092 --> 00:23:54,460
for over six months;
And the second is...
511
00:23:54,461 --> 00:23:57,029
Is that just
TV bullshit,
512
00:23:57,030 --> 00:24:00,314
or is that Paulson
sending us a message?
513
00:24:01,100 --> 00:24:02,717
Chris?
514
00:24:09,743 --> 00:24:11,627
Yeah? Sorry.
515
00:24:14,680 --> 00:24:15,998
What exactly does
516
00:24:15,999 --> 00:24:18,349
"a person familiar with
the Treasury Secretary" mean?
517
00:24:18,350 --> 00:24:20,484
That could mean
a lot of things.
518
00:24:20,485 --> 00:24:22,252
Did one of your
staffers do this?
519
00:24:22,253 --> 00:24:24,387
Please tell me someone got fired
10 minutes ago.
520
00:24:24,388 --> 00:24:26,605
The leak came from me.
521
00:24:28,358 --> 00:24:30,192
Hank, a public statement
like that
522
00:24:30,193 --> 00:24:32,194
can have a lot of
unintended consequences.
523
00:24:32,195 --> 00:24:34,162
We had to send a message
to the other banks.
524
00:24:34,163 --> 00:24:35,376
They need to step up.
525
00:24:35,377 --> 00:24:37,440
I don't have another rabbit
I can pull out of my hat.
526
00:24:38,401 --> 00:24:41,136
Rodgin Cohen
just called me.
527
00:24:41,137 --> 00:24:44,542
The B of A team is sitting there
playing brick breaker on their phones.
528
00:24:44,543 --> 00:24:46,012
They don't want this deal.
529
00:24:46,013 --> 00:24:48,516
The deal is hanging
by a thread
530
00:24:48,517 --> 00:24:50,386
because the closer
they get to Lehman
531
00:24:50,387 --> 00:24:52,689
the more it looks
like a toxic waste dump.
532
00:24:52,690 --> 00:24:56,126
Which is why at the end of the day
we may have to help them,
533
00:24:56,127 --> 00:24:59,863
which would be a lot easier
if we didn't publicly state that...
534
00:24:59,864 --> 00:25:01,965
We can't, Tim.
Legally we can't.
535
00:25:01,966 --> 00:25:04,268
Legally we haven't
figured out
536
00:25:04,269 --> 00:25:08,138
how yet.
537
00:25:08,139 --> 00:25:12,109
I am concerned
538
00:25:12,110 --> 00:25:14,777
we are limiting
our options
539
00:25:14,778 --> 00:25:18,046
at a time when we have
very few,
540
00:25:18,047 --> 00:25:20,230
if any, available.
541
00:25:22,650 --> 00:25:26,286
I want all the C.E.O.s
in a room.
542
00:25:26,287 --> 00:25:28,255
We've got the weekend.
543
00:25:28,256 --> 00:25:30,658
We lock them in a room
at the Fed
544
00:25:30,659 --> 00:25:34,363
and we don't let them out until
they have a solution on Lehman.
545
00:25:34,364 --> 00:25:36,398
Your oatmeal's
getting cold.
546
00:25:36,399 --> 00:25:39,583
They'll figure it out.
They'll all throw in some money.
547
00:25:41,102 --> 00:25:43,103
Well, Tim is
advocating strongly
548
00:25:43,104 --> 00:25:45,139
that we reconsider
some kind of Fed support.
549
00:25:45,140 --> 00:25:47,374
Tim wants us to pick up
the tab on everyone.
550
00:25:47,375 --> 00:25:49,909
I can't be
Mr. bailout.
551
00:25:49,910 --> 00:25:53,446
The Lehman hole is
twice what Bear's was.
552
00:25:53,447 --> 00:25:55,447
Investors are pulling
their accounts.
553
00:25:55,448 --> 00:25:58,016
You want to lend
into a run?
554
00:25:58,017 --> 00:26:00,251
What about Barclays?
Are they still interested?
555
00:26:00,252 --> 00:26:03,088
They can't afford the risk
any more than B of A can.
556
00:26:03,089 --> 00:26:06,626
I don't doubt your ability to talk
anybody into submission,
557
00:26:06,627 --> 00:26:08,795
but it is still
a long shot.
558
00:26:08,796 --> 00:26:12,666
And there's a very real possibility
that Lehman goes under.
559
00:26:12,667 --> 00:26:16,136
There's a deal
to be made here.
560
00:26:16,137 --> 00:26:18,938
I'm gonna make the deal.
561
00:26:18,939 --> 00:26:21,041
With just a little more
than an hour
562
00:26:21,042 --> 00:26:22,909
left until
the market closes,
563
00:26:22,910 --> 00:26:25,312
shares of Lehman Brothers
have taken another tumble.
564
00:26:25,313 --> 00:26:27,381
The stock is now
trading at a new low...
565
00:26:27,382 --> 00:26:29,318
under $4 a share.
566
00:26:29,319 --> 00:26:31,320
And judging from
the selling,
567
00:26:31,321 --> 00:26:34,239
there doesn't appear to be
a bottom in sight.
568
00:26:36,860 --> 00:26:38,862
So Blankfein
has a speech
569
00:26:38,863 --> 00:26:40,931
he's trying to get out of,
but the rest have confirmed.
570
00:26:40,932 --> 00:26:43,400
- Tell him it's not optional.
- Yeah.
571
00:26:43,401 --> 00:26:45,901
Good afternoon, Chairman.
Thank you so much for joining us.
572
00:26:45,902 --> 00:26:47,336
Whose plane is this?
573
00:26:47,337 --> 00:26:49,304
Uh, that's a rental.
574
00:26:49,305 --> 00:26:51,773
Hank put it
on his card.
575
00:26:51,774 --> 00:26:54,676
Sir, you know Neel and
Michele Davis, public affairs.
576
00:26:54,677 --> 00:26:55,944
Hi. Pleasure.
577
00:26:55,945 --> 00:26:57,645
This is Dan Jester...
our new numbers guy.
578
00:26:57,646 --> 00:26:58,623
Hi.
579
00:26:58,624 --> 00:27:00,149
I've talked him into
coming out of retirement.
580
00:27:00,150 --> 00:27:02,652
- Excuse me? Retirement?
- He was with us at Goldman.
581
00:27:02,653 --> 00:27:05,019
Got anybody at Treasury
who wasn't at Goldman?
582
00:27:05,020 --> 00:27:06,853
Chairman,
just to be clear,
583
00:27:06,854 --> 00:27:08,922
there's no question of
conflict of interest.
584
00:27:08,923 --> 00:27:11,557
Hank sold all of his Goldman stock
before he took office.
585
00:27:11,558 --> 00:27:13,292
I wasn't implying
anything.
586
00:27:13,293 --> 00:27:15,060
Sorry.
We're a little touchy
587
00:27:15,061 --> 00:27:17,762
about the whole
government-Sachs thing.
588
00:27:17,763 --> 00:27:19,680
Shall we?
589
00:27:22,667 --> 00:27:25,235
B of A keeps finding
more toxic assets.
590
00:27:25,236 --> 00:27:27,271
They want you
to reconsider a Jamie deal.
591
00:27:27,272 --> 00:27:29,172
They'll split the first
billion in losses,
592
00:27:29,173 --> 00:27:31,107
but they want you on the hook
for the next 40.
593
00:27:31,108 --> 00:27:33,342
You did it for Bear.
594
00:27:33,343 --> 00:27:35,643
Greg, let me
get back to you.
595
00:27:35,644 --> 00:27:38,112
What do I have to...
tattoo it on my forehead?
596
00:27:38,113 --> 00:27:39,780
We are not
bailing out Lehman.
597
00:27:39,781 --> 00:27:41,448
Wall Street has
a gambling problem.
598
00:27:41,449 --> 00:27:43,483
If government keeps
covering their losses,
599
00:27:43,484 --> 00:27:45,702
they never learn
anything.
600
00:27:46,453 --> 00:27:48,154
What?
601
00:27:48,155 --> 00:27:50,923
I didn't know if you wanted
to keep lecturing me on moral hazard
602
00:27:50,924 --> 00:27:53,658
or if I should just
call B of A back.
603
00:27:53,659 --> 00:27:55,762
We need to keep them at the table
604
00:27:55,763 --> 00:27:57,931
until they come up with
a private-sector solution.
605
00:27:57,932 --> 00:28:00,433
Tell them
to stay with us.
606
00:28:00,434 --> 00:28:02,636
- Alistair, hello.
- Hello, Henry.
607
00:28:02,637 --> 00:28:04,888
Hold on one second.
608
00:28:05,940 --> 00:28:07,941
Chancellor of
the Exchequer.
609
00:28:07,942 --> 00:28:11,345
I understand Barclays is one of
your potential buyers for Lehman.
610
00:28:11,346 --> 00:28:14,248
My banks are already under
a great deal of stress.
611
00:28:14,249 --> 00:28:16,550
They don't want
to become overextended.
612
00:28:16,551 --> 00:28:18,819
Lehman is problematic,
but there's value there.
613
00:28:18,820 --> 00:28:21,121
We will find a way
to make it attractive.
614
00:28:21,122 --> 00:28:23,323
Just stay with us.
615
00:28:23,324 --> 00:28:24,958
Talk soon.
616
00:28:24,959 --> 00:28:26,393
Bye.
617
00:28:26,394 --> 00:28:28,395
We'll keep Barclays
in the mix,
618
00:28:28,396 --> 00:28:31,231
but B of A is still
our best bet.
619
00:28:31,232 --> 00:28:34,668
We've got the C.E.O.s of every
major bank coming here tonight.
620
00:28:34,669 --> 00:28:38,038
We have to make it clear
that this their problem,
621
00:28:38,039 --> 00:28:41,440
that we are their advisors
and their allies,
622
00:28:41,441 --> 00:28:45,627
but we are not
their safety net.
623
00:28:46,779 --> 00:28:48,596
What should we expect
from these guys?
624
00:28:59,126 --> 00:29:01,127
Jamie is smart.
625
00:29:01,128 --> 00:29:03,229
He doesn't have as much
cash to work with
626
00:29:03,230 --> 00:29:05,931
since he bought Bear.
627
00:29:05,932 --> 00:29:08,733
Lloyd's a superstar.
628
00:29:08,734 --> 00:29:11,502
Goldman's the smartest
shop on the block.
629
00:29:11,503 --> 00:29:13,505
And just because
I used to be his boss,
630
00:29:13,506 --> 00:29:17,008
it doesn't mean
he's gonna listen to me.
631
00:29:17,009 --> 00:29:19,911
John Mack used to run
around the floor screaming,
632
00:29:19,912 --> 00:29:23,682
"there's blood in the water!
Let's go kill someone!"
633
00:29:23,683 --> 00:29:26,368
He's a fighter.
634
00:29:28,019 --> 00:29:29,886
Thain was my number two
at Goldman.
635
00:29:29,887 --> 00:29:31,887
He's selfish.
He's a pragmatist.
636
00:29:31,888 --> 00:29:35,840
He knows... if Lehman goes,
Merrill's next.
637
00:29:36,993 --> 00:29:40,429
Vikram Pandit is the new guy
at Citigroup.
638
00:29:40,430 --> 00:29:43,198
No one knows
if he's running Citi
639
00:29:43,199 --> 00:29:45,550
or if Citi's
running him.
640
00:30:08,286 --> 00:30:12,455
Thanks for coming down here
on such short notice.
641
00:30:12,456 --> 00:30:14,524
Monday morning Lehman
will no longer be able
642
00:30:14,525 --> 00:30:16,810
to honor
its obligations.
643
00:30:18,864 --> 00:30:22,133
We have two potential buyers...
B of A and Barclays.
644
00:30:22,134 --> 00:30:24,435
Neither will take the company
unless someone else
645
00:30:24,436 --> 00:30:26,737
finances part of the deal.
646
00:30:26,738 --> 00:30:30,357
The government is not
in a position to step in.
647
00:30:31,543 --> 00:30:34,544
I did the last one.
You're gonna do this one.
648
00:30:34,545 --> 00:30:35,945
Where is Dick Fuld?
649
00:30:35,946 --> 00:30:38,213
Dick's in no condition
to make any decisions.
650
00:30:38,214 --> 00:30:41,383
We're breaking you
into three groups.
651
00:30:41,384 --> 00:30:44,220
The first one
will try to value
652
00:30:44,221 --> 00:30:46,156
Lehman's toxic assets.
653
00:30:46,157 --> 00:30:48,226
The second one will work
on some sort of structure
654
00:30:48,227 --> 00:30:50,429
for you all to invest
in Lehman.
655
00:30:50,430 --> 00:30:54,134
And the third one works
on the lights-out plan.
656
00:30:54,135 --> 00:30:56,570
If Lehman files for bankruptcy,
we need to figure out
657
00:30:56,571 --> 00:30:58,872
how to contain the damage
to the rest of you.
658
00:30:58,873 --> 00:31:00,074
Christ.
659
00:31:00,075 --> 00:31:02,043
We've all seen
this coming for miles.
660
00:31:02,044 --> 00:31:05,248
I don't think the Lehman bankruptcy
takes down our firms.
661
00:31:05,249 --> 00:31:07,886
What, are we
crossing our fingers?
662
00:31:07,887 --> 00:31:10,555
You're asking us
to save a competitor.
663
00:31:10,556 --> 00:31:13,025
Let's not act like you're
doing us a favor.
664
00:31:13,026 --> 00:31:17,230
Gentlemen, gentlemen,
you are great Americans
665
00:31:17,231 --> 00:31:19,198
undertaking
a patriotic duty.
666
00:31:19,199 --> 00:31:21,966
Your travail
will earn you
667
00:31:21,967 --> 00:31:25,435
the love and gratitude
of your country.
668
00:31:25,436 --> 00:31:27,703
I think it was Thomas Paine
who said that these are...
669
00:31:27,704 --> 00:31:29,904
Lehman is a trading partner
for every bank in this room.
670
00:31:29,905 --> 00:31:32,706
And their failure will be a
massive blow to all of you.
671
00:31:32,707 --> 00:31:34,440
This is
your problem.
672
00:31:34,441 --> 00:31:36,908
We can all argue about
how we got here...
673
00:31:36,909 --> 00:31:39,243
deregulation,
derivatives,
674
00:31:39,244 --> 00:31:41,011
Dick Fuld made
bad decisions.
675
00:31:41,012 --> 00:31:44,648
We're all responsible.
It's a catastrophic mess.
676
00:31:44,649 --> 00:31:47,049
The government's done
whatever it can do.
677
00:31:47,050 --> 00:31:48,417
It's on you now.
678
00:31:48,418 --> 00:31:51,386
You need to fix it
and you need to pay for it.
679
00:31:51,387 --> 00:31:54,856
Let me be clear:
680
00:31:54,857 --> 00:31:56,858
We will remember
681
00:31:56,859 --> 00:31:59,677
anyone who's not helpful.
682
00:32:22,484 --> 00:32:24,919
Do you notice a little
pattern here?
683
00:32:24,920 --> 00:32:27,722
We don't deal with things until there's
some kind of emergency on the table.
684
00:32:27,723 --> 00:32:30,024
Yeah, we don't deal
with things until Friday...
685
00:32:30,025 --> 00:32:32,393
Some kind of a weekend thing.
When are we gonna figure out
686
00:32:32,394 --> 00:32:34,596
exactly how to handle the failure
of an investment bank?
687
00:32:34,597 --> 00:32:36,164
Well, let's do it
over a weekend.
688
00:32:36,165 --> 00:32:38,199
Just I talked to a person
who is monitoring
689
00:32:38,200 --> 00:32:40,536
The situation out there,
and the person said
690
00:32:40,537 --> 00:32:43,873
they all want the same deal
Jamie Dimon got,
691
00:32:43,874 --> 00:32:45,908
and they're not
going to get it.
692
00:32:45,909 --> 00:32:48,344
Just a heads up...
Chris Flowers is in the lobby.
693
00:32:48,345 --> 00:32:51,397
He's consulting
for B of A on Lehman.
694
00:32:53,116 --> 00:32:55,951
Hank pushed Flowers
out of Goldman.
695
00:32:55,952 --> 00:32:57,720
Yesterday we thought
Lehman was holding
696
00:32:57,721 --> 00:32:59,655
$30 billion in crap.
Today it's $70...
697
00:32:59,656 --> 00:33:03,156
$70 billion in assets that
we're valuing with a dartboard.
698
00:33:03,157 --> 00:33:04,525
No, we're gonna
work this out.
699
00:33:04,526 --> 00:33:06,827
Unless you step in,
we're ending this.
700
00:33:06,828 --> 00:33:08,261
Don't forget
about Dick.
701
00:33:08,262 --> 00:33:10,063
Yeah, Dick Fuld
keeps calling,
702
00:33:10,064 --> 00:33:11,981
hammering us
to raise the price.
703
00:33:13,601 --> 00:33:15,751
Excuse me.
704
00:33:20,107 --> 00:33:23,008
$70 fucking billion
705
00:33:23,009 --> 00:33:26,678
and no collateral?
706
00:33:26,679 --> 00:33:29,247
If Lehman Brothers fails
this weekend,
707
00:33:29,248 --> 00:33:31,549
there's little doubt
amongst the people I speak to
708
00:33:31,550 --> 00:33:33,650
that Merrill Lynch
will be next.
709
00:33:33,651 --> 00:33:35,987
Confidence is a very
fragile thing.
710
00:33:35,988 --> 00:33:39,692
And in our financial markets
it is eroding very quickly.
711
00:33:39,693 --> 00:33:41,926
Lehman's not gonna
make it.
712
00:33:41,927 --> 00:33:44,928
We're next.
We need to do something right now.
713
00:33:44,929 --> 00:33:47,197
B of A's the only one
out there.
714
00:33:47,198 --> 00:33:49,633
I can put in a call.
It screws Lehman, but...
715
00:33:49,634 --> 00:33:52,535
Lehman screwed themselves.
Paulson has drawn a line in the sand.
716
00:33:52,536 --> 00:33:54,470
Lehman is dead.
717
00:33:54,471 --> 00:33:56,855
Make the call.
718
00:33:59,541 --> 00:34:02,745
We'd like you guys
to look at taking a stake in Merrill,
719
00:34:02,746 --> 00:34:05,781
something in
the neighborhood of 10%.
720
00:34:05,782 --> 00:34:09,218
Well, I don't know
if I can generate any interest in 10%,
721
00:34:09,219 --> 00:34:12,321
but if the whole
company's in play,
722
00:34:12,322 --> 00:34:15,590
I bet that's something
that we'd consider.
723
00:34:15,591 --> 00:34:17,692
Us and Lehman?
724
00:34:17,693 --> 00:34:20,811
Deal of this size...
there's only room for one.
725
00:34:27,301 --> 00:34:29,502
It is a lot of risk,
no question,
726
00:34:29,503 --> 00:34:31,504
but if you stay
in the game,
727
00:34:31,505 --> 00:34:33,872
we all will find
a private solution.
728
00:34:33,873 --> 00:34:35,891
Absolutely.
729
00:34:36,910 --> 00:34:38,911
Don't get scared
by the numbers.
730
00:34:38,912 --> 00:34:41,447
We'll figure it out.
Lehman is worth owning.
731
00:34:41,448 --> 00:34:44,298
Guys, you got a second?
732
00:34:47,552 --> 00:34:49,553
I was at A.I.G.
yesterday.
733
00:34:49,554 --> 00:34:51,554
Next Wednesday
they got
734
00:34:51,555 --> 00:34:54,455
a $5 billion hole,
minimum.
735
00:34:54,456 --> 00:34:56,956
I called
Warren Buffett.
736
00:34:56,957 --> 00:34:59,924
He wouldn't touch it
with a stick.
737
00:34:59,925 --> 00:35:01,759
We're looking
into it.
738
00:35:01,760 --> 00:35:04,012
It's a very big company.
739
00:35:06,231 --> 00:35:08,198
Thanks, Chris.
740
00:35:08,199 --> 00:35:10,483
I appreciate
all your help.
741
00:35:16,741 --> 00:35:19,693
They're not
on top of it.
742
00:35:25,585 --> 00:35:27,837
Look at this.
743
00:35:31,526 --> 00:35:34,096
Is this even possible?
744
00:35:34,097 --> 00:35:35,998
A.I.G.?
745
00:35:35,999 --> 00:35:37,617
Holy shit.
746
00:35:38,903 --> 00:35:41,154
Get into this.
747
00:35:42,974 --> 00:35:45,727
John.
748
00:35:49,382 --> 00:35:52,685
Do you see
what's happening here?
749
00:35:52,686 --> 00:35:54,854
Are you watching out
for yourself?
750
00:35:54,855 --> 00:35:56,822
I'm not thick.
751
00:35:56,823 --> 00:35:59,708
I'm working
on something.
752
00:36:02,797 --> 00:36:06,082
You're talking
to B of A.
753
00:36:07,134 --> 00:36:09,235
I'm sorry.
754
00:36:09,236 --> 00:36:11,069
I know it's not good
for Lehman,
755
00:36:11,070 --> 00:36:12,637
but I have to take care
of Merrill.
756
00:36:12,638 --> 00:36:16,073
Let me worry
about Lehman.
757
00:36:16,074 --> 00:36:18,926
Barclays is still
in the game.
758
00:36:20,445 --> 00:36:22,596
Just get it done.
759
00:36:33,525 --> 00:36:37,345
B of A is gonna
buy Merrill.
760
00:36:39,197 --> 00:36:41,465
We need to make
Barclays work.
761
00:36:41,466 --> 00:36:45,003
I thought you said
the British never close.
762
00:36:45,004 --> 00:36:46,971
They're here.
763
00:36:46,972 --> 00:36:49,340
They seem to really
want it.
764
00:36:49,341 --> 00:36:52,844
If we hold their hands,
they'll close.
765
00:36:52,845 --> 00:36:54,979
Rodgin,
what the fuck?
766
00:36:54,980 --> 00:36:58,116
I can't get Geithner.
I can't get Paulson.
767
00:36:58,117 --> 00:37:01,253
I can't even get my own goddamn
employees to pick up the phone.
768
00:37:01,254 --> 00:37:03,322
There's a lot happening
down here, Dick.
769
00:37:03,323 --> 00:37:04,790
Oh fuck.
770
00:37:04,791 --> 00:37:07,293
You know what?
You tell Geithner,
771
00:37:07,294 --> 00:37:10,630
he doesn't pull my ass out of the fire...
Merrill's gonna be next.
772
00:37:10,631 --> 00:37:13,900
He knows that.
Dick, he just told me
773
00:37:13,901 --> 00:37:16,619
they're working
on a solution for Merrill.
774
00:37:19,306 --> 00:37:21,841
Those cocksuckers are
gonna bail out Merrill?
775
00:37:21,842 --> 00:37:23,476
No no, not the Fed.
776
00:37:23,477 --> 00:37:25,478
Well, there's no
private buyers.
777
00:37:25,479 --> 00:37:28,516
There's just B of A
and...
778
00:37:28,517 --> 00:37:31,151
they're gonna put B of A
together with Merrill?
779
00:37:31,152 --> 00:37:33,720
We still have Barclays.
Hank feels that...
780
00:37:33,721 --> 00:37:38,056
the federal government
is snaking my deal?
781
00:37:38,057 --> 00:37:41,843
I cannot fucking
believe this shit!
782
00:37:43,530 --> 00:37:45,832
B of A made a deal
with Merrill?
783
00:37:45,833 --> 00:37:47,901
Yeah, Lehman's still
our problem.
784
00:37:47,902 --> 00:37:50,270
I don't think I can take
another day of this.
785
00:37:50,271 --> 00:37:52,273
You're getting out
of a Mercedes
786
00:37:52,274 --> 00:37:54,308
to go to the New York
Federal Reserve.
787
00:37:54,309 --> 00:37:56,762
It's not a Higgins boat
on Omaha Beach.
788
00:38:04,854 --> 00:38:06,822
Okay okay,
789
00:38:06,823 --> 00:38:08,824
we've been here
a long time.
790
00:38:08,825 --> 00:38:11,259
Let's stop
fucking around.
791
00:38:11,260 --> 00:38:14,496
Main Street wants
Wall Street to pay.
792
00:38:14,497 --> 00:38:17,632
They think we're
overpaid assholes.
793
00:38:17,633 --> 00:38:21,169
There's no politician
who's gonna sign off on a bailout.
794
00:38:21,170 --> 00:38:23,172
Why would you
bail out people
795
00:38:23,173 --> 00:38:25,174
whose sole job
is to make money?
796
00:38:25,175 --> 00:38:29,644
So let's make this
real simple.
797
00:38:29,645 --> 00:38:32,413
Hank thinks
he can sell
798
00:38:32,414 --> 00:38:34,182
the good parts of Lehman
to Barclays,
799
00:38:34,183 --> 00:38:36,183
but someone has to take
the real estate crap
800
00:38:36,184 --> 00:38:38,585
that's weighing down
the company.
801
00:38:38,586 --> 00:38:40,587
Nobody knows how much
this shit is worth,
802
00:38:40,588 --> 00:38:42,655
but we know somebody has to
buy it to make a deal.
803
00:38:42,656 --> 00:38:44,690
I don't like it.
804
00:38:44,691 --> 00:38:47,159
Nobody likes it.
805
00:38:47,160 --> 00:38:49,995
Let's just suck it up
and do it.
806
00:38:49,996 --> 00:38:52,466
How many of you can
kick in a billion dollars
807
00:38:52,467 --> 00:38:55,219
to stop Lehman
from going down?
808
00:38:57,973 --> 00:39:00,041
I'm in.
809
00:39:00,042 --> 00:39:02,960
One billion.
810
00:39:13,221 --> 00:39:15,539
Okay.
811
00:39:21,162 --> 00:39:23,614
Goldman's
in for a billion.
812
00:39:30,806 --> 00:39:33,308
John?
813
00:39:33,309 --> 00:39:35,593
Yeah.
814
00:39:41,016 --> 00:39:43,267
Yes.
815
00:39:44,620 --> 00:39:46,971
Yeah.
816
00:39:48,223 --> 00:39:50,507
Yes.
817
00:39:54,996 --> 00:39:57,631
We did it.
Barclays came through.
818
00:39:57,632 --> 00:39:59,533
Too goddamn right!
819
00:39:59,534 --> 00:40:01,969
Barclays won't touch
the real estate assets,
820
00:40:01,970 --> 00:40:04,454
but the other banks
agreed to cover those.
821
00:40:05,840 --> 00:40:08,208
Call the board.
Get everybody here.
822
00:40:08,209 --> 00:40:10,111
We got a deal to make.
823
00:40:10,112 --> 00:40:11,729
Okay.
824
00:40:21,125 --> 00:40:22,726
Did you get him?
825
00:40:22,727 --> 00:40:25,628
Geithner doesn't
return my calls.
826
00:40:25,629 --> 00:40:27,462
We can't get hold of
any of those people.
827
00:40:27,463 --> 00:40:30,398
At the end of the day they can't
sign the deal without our say-so.
828
00:40:30,399 --> 00:40:33,150
Yes, but do they
know that?
829
00:40:36,404 --> 00:40:38,405
Yes.
830
00:40:38,406 --> 00:40:40,039
Yes, by all means,
831
00:40:40,040 --> 00:40:42,408
now that he deigns to call,
put him through.
832
00:40:42,409 --> 00:40:45,611
Sir Callum, sorry I haven't
gotten back to you.
833
00:40:45,612 --> 00:40:47,447
We're just
sorting through
834
00:40:47,448 --> 00:40:50,082
this Barclays deal
for Lehman.
835
00:40:50,083 --> 00:40:52,284
As Barclays' regulator,
836
00:40:52,285 --> 00:40:55,287
we have serious concerns
about this proposed arrangement.
837
00:40:55,288 --> 00:40:57,122
What... are...
are you saying
838
00:40:57,123 --> 00:40:59,223
you won't approve
the deal?
839
00:40:59,224 --> 00:41:01,358
Even if we were
comfortable with the agreement,
840
00:41:01,359 --> 00:41:02,926
which we are not,
841
00:41:02,927 --> 00:41:04,928
Barclays would need
at least 30 days
842
00:41:04,929 --> 00:41:06,896
for shareholder
approval.
843
00:41:06,897 --> 00:41:09,299
No no no no no no.
844
00:41:09,300 --> 00:41:11,668
He can't.
He can't do this.
845
00:41:11,669 --> 00:41:14,405
- Can they stop the deal?
- Of course they can stop the deal.
846
00:41:14,406 --> 00:41:16,407
But even if they don't stop it,
the delay will kill it.
847
00:41:16,408 --> 00:41:19,910
Let's call the Chancellor
of the Exchequer right now.
848
00:41:19,911 --> 00:41:22,078
None of those
assets
849
00:41:22,079 --> 00:41:24,698
would be part
of Barclays.
850
00:41:25,917 --> 00:41:30,104
Yes, but if the F.S.A.
were to...
851
00:41:31,590 --> 00:41:36,410
of c...
of course.
852
00:41:37,429 --> 00:41:39,430
Yeah.
853
00:41:39,431 --> 00:41:41,949
I wish you good night.
854
00:41:43,136 --> 00:41:45,486
Good night to you too.
855
00:41:52,710 --> 00:41:55,795
"We don't want to import
your cancer".
856
00:42:07,391 --> 00:42:10,594
Those of you
857
00:42:10,595 --> 00:42:13,799
who didn't want to assist
the Barclays deal,
858
00:42:13,800 --> 00:42:17,102
you can breathe
a sigh of relief.
859
00:42:17,103 --> 00:42:19,170
The deal's not
gonna happen.
860
00:42:19,171 --> 00:42:21,573
- Hank, we have the money.
- The deal's dead.
861
00:42:21,574 --> 00:42:24,876
The British regulator
won't sign off.
862
00:42:24,877 --> 00:42:26,544
There must be some
pressure you can exert.
863
00:42:26,545 --> 00:42:29,181
Trust me, I've done
everything I can.
864
00:42:29,182 --> 00:42:32,685
The British...
865
00:42:32,686 --> 00:42:35,704
they grin-fucked us.
866
00:42:38,192 --> 00:42:40,160
Pason's got
100,000 employees.
867
00:42:40,161 --> 00:42:42,162
Geithner has
200 lawyers.
868
00:42:42,163 --> 00:42:44,198
Freaking Chris Cox
has 3000 people.
869
00:42:44,199 --> 00:42:47,258
Not a single one of those assholes
could pick up a phone,
870
00:42:47,259 --> 00:42:49,837
call the British, find out if
they're was a deal to be made
871
00:42:49,838 --> 00:42:52,940
before they spend the weekend was
sweating us for cash?
872
00:42:52,941 --> 00:42:54,942
Somebody dropped
the ball.
873
00:42:54,943 --> 00:42:56,877
They didn't
drop the ball.
874
00:42:56,878 --> 00:42:58,946
They dropped the ball,
kicked the coach in the nuts
875
00:42:58,947 --> 00:43:00,915
and took a crap in
the quarterback's mouth.
876
00:43:00,916 --> 00:43:03,167
Of course.
877
00:43:04,552 --> 00:43:07,271
The Fed will do
something.
878
00:43:08,490 --> 00:43:10,241
They have to.
879
00:43:14,831 --> 00:43:16,832
We've got to announce
the Lehman bankruptcy now.
880
00:43:16,833 --> 00:43:18,834
If Asia opens and
this isn't locked down,
881
00:43:18,835 --> 00:43:20,702
everyone's gonna
assume the worst.
882
00:43:20,703 --> 00:43:22,871
The selloff will kill
the Merrill-B of A deal.
883
00:43:22,872 --> 00:43:25,340
- Who's gonna make the announcement?
- I think it's gotta be S.E.C.
884
00:43:25,341 --> 00:43:26,741
Yeah.
885
00:43:26,742 --> 00:43:29,260
Okay.
886
00:43:31,980 --> 00:43:35,082
Let's do it here.
How soon can we set that up?
887
00:43:35,083 --> 00:43:36,551
Right away.
888
00:43:36,552 --> 00:43:39,221
We could use the main floor,
the entrance hall.
889
00:43:39,222 --> 00:43:42,073
With the statue behind me?
Excellent.
890
00:43:45,961 --> 00:43:48,846
Did Lehman actually
agree to file?
891
00:43:57,139 --> 00:43:59,040
Chris, call Lehman.
892
00:43:59,041 --> 00:44:00,708
Make sure they file
right now.
893
00:44:00,709 --> 00:44:02,693
Absolutely.
894
00:44:14,357 --> 00:44:16,658
A.I.G.'s a huge problem.
895
00:44:16,659 --> 00:44:19,094
The books are a mess.
But from what I can tell,
896
00:44:19,095 --> 00:44:22,163
half the banks in the world
are in bed with these guys.
897
00:44:22,164 --> 00:44:24,532
Everyone who had a
piece-of-crap mortgage security
898
00:44:24,533 --> 00:44:26,668
bought insurance
on their risk from A.I.G.,
899
00:44:26,669 --> 00:44:28,103
and I mean everyone.
900
00:44:28,104 --> 00:44:30,639
How could they
let this happen?
901
00:44:30,640 --> 00:44:34,610
They must have figured
real estate would never go down, ever.
902
00:44:34,611 --> 00:44:37,630
Hank, Lehman still
hasn't filed.
903
00:44:39,516 --> 00:44:42,518
Cox has to make his announcement.
Asia's opening.
904
00:44:42,519 --> 00:44:44,853
Has he talked to them?
905
00:44:44,854 --> 00:44:47,289
He hasn't even
called yet.
906
00:44:47,290 --> 00:44:49,859
We told Fuld about Barclays.
We said Cox was gonna call.
907
00:44:49,860 --> 00:44:51,827
He's got his entire board
sitting there...
908
00:44:51,828 --> 00:44:53,696
no call.
909
00:44:53,697 --> 00:44:55,664
Cox is like a deer
in the headlights.
910
00:44:55,665 --> 00:44:57,917
Son of a bitch!
911
00:45:03,641 --> 00:45:07,377
You are their regulator.
Call the Lehman board now.
912
00:45:07,378 --> 00:45:10,246
Hank, this is a complicated
situation where...
913
00:45:10,247 --> 00:45:12,148
Asia's opening.
914
00:45:12,149 --> 00:45:13,950
They don't announce...
market goes in the toilet.
915
00:45:13,951 --> 00:45:17,020
We have to consider the
appropriate role of government here.
916
00:45:17,021 --> 00:45:19,489
Can I as chairman of S.E.C.
move forward and...?
917
00:45:19,490 --> 00:45:21,991
You guys are like the gang
that can't shoot straight.
918
00:45:21,992 --> 00:45:24,327
This is your job.
919
00:45:24,328 --> 00:45:27,913
Make the damn
phone call.
920
00:45:34,672 --> 00:45:36,807
Chris, this is
Dick Fuld.
921
00:45:36,808 --> 00:45:38,875
The board is in session.
Everyone is here...
922
00:45:38,876 --> 00:45:41,511
all the directors
and the firm's counsel.
923
00:45:41,512 --> 00:45:43,313
We understand
924
00:45:43,314 --> 00:45:45,816
the Barclays deal
has imploded.
925
00:45:45,817 --> 00:45:50,087
We were hoping you might
have some option
926
00:45:50,088 --> 00:45:52,622
that we haven't
thought of yet.
927
00:45:52,623 --> 00:45:56,026
Uh, the markets are
in turmoil, as you know.
928
00:45:56,027 --> 00:45:58,695
A Lehman bankruptcy
will help
929
00:45:58,696 --> 00:46:01,532
settle that uncertainty
and, we believe, calm the market.
930
00:46:01,533 --> 00:46:04,368
Both the Fed and SEC
are in agreement about this.
931
00:46:04,369 --> 00:46:06,055
Well, let me under...
932
00:46:06,056 --> 00:46:07,537
I'm sorry, let me see
if I understand this.
933
00:46:07,538 --> 00:46:09,806
Are... are you
directing us
934
00:46:09,807 --> 00:46:12,375
to put Lehman
into bankruptcy?
935
00:46:12,376 --> 00:46:14,260
Give us a moment.
936
00:46:15,379 --> 00:46:17,297
- He's muted.
- What the hell was that?
937
00:46:20,284 --> 00:46:22,552
Tell them to file.
938
00:46:22,553 --> 00:46:25,689
Everything said in that meeting
is or will be public record.
939
00:46:25,690 --> 00:46:28,057
I can't tell a private company
to file for bankruptcy.
940
00:46:28,058 --> 00:46:29,760
I don't have
that power.
941
00:46:29,761 --> 00:46:32,345
Do I?
942
00:46:34,732 --> 00:46:36,983
Do it.
943
00:46:48,579 --> 00:46:51,981
The decision to file
for bankruptcy protection
944
00:46:51,982 --> 00:46:55,051
is one the board
needs to make.
945
00:46:55,052 --> 00:46:57,754
It is not the government's
decision.
946
00:46:57,755 --> 00:47:00,574
But we do believe...
947
00:47:02,427 --> 00:47:04,428
That the situation
should be resolved.
948
00:47:04,429 --> 00:47:06,964
So you're not
directing us to file?
949
00:47:06,965 --> 00:47:09,266
I'm not saying anything more
than I've just said.
950
00:47:09,267 --> 00:47:11,018
Thank you.
951
00:47:24,248 --> 00:47:26,700
Take the vote.
952
00:47:28,019 --> 00:47:30,154
- Mr. Akers.
- Yes.
953
00:47:30,155 --> 00:47:33,424
Sir Christopher.
954
00:47:33,425 --> 00:47:34,591
Yes.
955
00:47:34,592 --> 00:47:36,860
Admiral Evans.
956
00:47:36,861 --> 00:47:40,230
I'm sorry, but yes.
957
00:47:40,231 --> 00:47:42,716
Chairman Fuld.
958
00:47:44,770 --> 00:47:47,021
Dick?
959
00:47:52,311 --> 00:47:54,896
Yes.
960
00:47:56,883 --> 00:47:59,017
Mr. Hernandez.
961
00:47:59,018 --> 00:48:01,553
Yes.
962
00:48:01,554 --> 00:48:03,722
Mr. Ainslie.
963
00:48:03,723 --> 00:48:05,524
Yes.
964
00:48:05,525 --> 00:48:08,561
- Mr. Berlind.
- Yes.
965
00:48:08,562 --> 00:48:11,063
- Mr. Cruikshank.
- Yes.
966
00:48:11,064 --> 00:48:14,032
- Dr. Kaufman.
- Yes.
967
00:48:14,033 --> 00:48:17,719
Mr. Macomber.
968
00:48:18,838 --> 00:48:20,605
P?
969
00:48:20,606 --> 00:48:24,109
- Lehman's gone.
- Oh honey.
970
00:48:24,110 --> 00:48:26,111
I should have know the British
were gonna be a problem.
971
00:48:26,112 --> 00:48:28,797
I spoke to them two days ago.
I should have read between the lines.
972
00:48:31,651 --> 00:48:34,119
You can't
take all this on.
973
00:48:34,120 --> 00:48:37,156
There's a lot of
other people involved.
974
00:48:37,157 --> 00:48:39,992
It's on me.
I'm Treasury Secretary
975
00:48:39,993 --> 00:48:42,428
and the fourth largest
investment bank in the country
976
00:48:42,429 --> 00:48:45,164
failed on my watch.
977
00:48:45,165 --> 00:48:48,934
I mean, I... I...
978
00:48:48,935 --> 00:48:51,954
I don't know
what's gonna happen.
979
00:48:53,941 --> 00:48:56,358
Miss you too.
980
00:49:41,388 --> 00:49:43,872
Taxi.
981
00:49:57,139 --> 00:49:59,741
Jim, I'm at Midtown.
982
00:49:59,742 --> 00:50:03,112
The ticker is...
983
00:50:03,113 --> 00:50:05,448
what the hell
am I looking at?
984
00:50:05,449 --> 00:50:07,934
Hank, it's good.
985
00:50:12,657 --> 00:50:14,793
"It is oddly reassuring
986
00:50:14,794 --> 00:50:17,697
that the Treasury Department
and the Federal Reserve
987
00:50:17,698 --> 00:50:19,266
let Lehman Brothers fail".
988
00:50:19,267 --> 00:50:21,268
Oh, okay, here it is.
Here it is.
989
00:50:21,269 --> 00:50:23,637
Government intervention
would have been seen
990
00:50:23,638 --> 00:50:25,440
a sign of extreme peril
991
00:50:25,441 --> 00:50:27,475
in the global
financial system
992
00:50:27,476 --> 00:50:30,446
or extreme weakness
on the part of federal regulators".
993
00:50:30,447 --> 00:50:32,648
"The New York"
fucking "Times".
994
00:50:32,649 --> 00:50:35,618
Yeah, and it's not just them.
It's everybody.
995
00:50:35,619 --> 00:50:39,289
Thank you, Senator.
I appreciate it.
996
00:50:39,290 --> 00:50:41,725
Congress is liking it.
997
00:50:41,726 --> 00:50:43,927
I'm not sure they should be
so happy about this,
998
00:50:43,928 --> 00:50:46,997
but they like
that we let Lehman go.
999
00:50:46,998 --> 00:50:50,200
You stood strong.
You've got brass balls.
1000
00:50:50,201 --> 00:50:52,336
It's what people need
at a time like this.
1001
00:50:52,337 --> 00:50:54,471
What is
the market doing?
1002
00:50:54,472 --> 00:50:56,205
Uh, Europe's only down
a little.
1003
00:50:56,206 --> 00:50:58,106
Dow Jones futures
only off 3%.
1004
00:50:58,107 --> 00:51:00,340
So you need to build on this
at the press conference.
1005
00:51:00,341 --> 00:51:03,542
The story is we did everything
we could for Lehman.
1006
00:51:03,543 --> 00:51:05,277
- We did.
- And the takeaway is...
1007
00:51:05,278 --> 00:51:08,012
No more bailouts.
1008
00:51:08,013 --> 00:51:09,680
Mr. Secretary.
1009
00:51:09,681 --> 00:51:11,581
How should we read
what happened with Lehman?
1010
00:51:11,582 --> 00:51:13,616
Read it as
I think it's important
1011
00:51:13,617 --> 00:51:16,085
to maintain
the stability
1012
00:51:16,086 --> 00:51:19,755
and orderliness
of our financial system;
1013
00:51:19,756 --> 00:51:24,861
and, um, the...
1014
00:51:24,862 --> 00:51:28,231
Moral hazard is something
I don't take lightly.
1015
00:51:28,232 --> 00:51:30,332
Mr. Paulson.
Mr. Secretary, sir.
1016
00:51:30,333 --> 00:51:33,703
How do you see the health
of the banking system today?
1017
00:51:33,704 --> 00:51:35,738
The way the markets
are performing today...
1018
00:51:35,739 --> 00:51:38,842
it's a testament to how the
financial industry has come together
1019
00:51:38,843 --> 00:51:40,977
in an extraordinary set
of circumstances.
1020
00:51:40,978 --> 00:51:42,980
The American people
can remain confident
1021
00:51:42,981 --> 00:51:45,383
in the soundness
and the resilience
1022
00:51:45,384 --> 00:51:47,685
of the financial
system.
1023
00:51:47,686 --> 00:51:49,253
Thank you all.
1024
00:51:49,254 --> 00:51:51,989
Mr. Secretary.
Mr. Paulson.
1025
00:51:51,990 --> 00:51:54,158
What?
1026
00:51:54,159 --> 00:51:56,961
Dow's falling off a cliff...
400 points already.
1027
00:51:56,962 --> 00:51:59,062
And the credit markets
are frozen.
1028
00:51:59,063 --> 00:52:01,931
Goldman and Morgan Stanley
are getting slammed by withdrawals.
1029
00:52:01,932 --> 00:52:04,250
The Lehman thing's
killing them.
1030
00:52:05,536 --> 00:52:07,404
I should talk
to the President
1031
00:52:07,405 --> 00:52:10,006
about how we'll contain
the damage.
1032
00:52:10,007 --> 00:52:12,509
Before you speak
to the President,
1033
00:52:12,510 --> 00:52:14,828
we've had
another problem.
1034
00:52:16,046 --> 00:52:17,713
A.I.G.
1035
00:52:17,714 --> 00:52:20,249
Mr. Geithner is
working with A.I.G.
1036
00:52:20,250 --> 00:52:22,084
on a private-sector
solution
1037
00:52:22,085 --> 00:52:24,086
and the Secretary
is monitoring
1038
00:52:24,087 --> 00:52:26,022
their progress
very carefully.
1039
00:52:26,023 --> 00:52:30,660
He's in close contact with the
Congressional leadership, most...
1040
00:52:30,661 --> 00:52:32,529
the White House wants
a briefing on A.I.G.
1041
00:52:32,530 --> 00:52:34,365
They're more informed
about that than we are.
1042
00:52:34,366 --> 00:52:36,032
We've got the same
information they do.
1043
00:52:36,033 --> 00:52:39,035
No, we don't believe
that Lehman's bankruptcy
1044
00:52:39,036 --> 00:52:41,071
is taking down
all of Wall Street.
1045
00:52:41,072 --> 00:52:42,940
Okay, so how do you explain...?
1046
00:52:42,941 --> 00:52:44,943
The A.I.G. situation
may have been,
1047
00:52:44,944 --> 00:52:47,713
you know,
exacerbated by the...
1048
00:52:47,714 --> 00:52:49,831
and Barney Frank's
office.
1049
00:52:50,917 --> 00:52:52,184
Yeah.
1050
00:52:52,185 --> 00:52:55,554
A surprise?
No, A.I.G. has been struggling...
1051
00:52:55,555 --> 00:52:58,623
Well, why didn't you guys head
off this situation six months ago?
1052
00:52:58,624 --> 00:53:02,425
Because the requisite
magic wand wasn't available, Doug.
1053
00:53:02,426 --> 00:53:04,226
But if we do find one,
1054
00:53:04,227 --> 00:53:06,811
you will be among
the very first to know.
1055
00:53:07,563 --> 00:53:09,931
Blankfein on four,
urgent.
1056
00:53:09,932 --> 00:53:12,400
I have to go.
1057
00:53:12,401 --> 00:53:13,968
Hey Lloyd.
1058
00:53:13,969 --> 00:53:16,303
The goddamn British
bankruptcy administrator
1059
00:53:16,304 --> 00:53:18,606
froze all of Lehman's
customer accounts.
1060
00:53:18,607 --> 00:53:21,244
You didn't square this with
the British before you did it?
1061
00:53:21,245 --> 00:53:22,879
Geithner on five.
1062
00:53:22,880 --> 00:53:24,614
People are freaking out.
1063
00:53:24,615 --> 00:53:26,649
They can't get
their money.
1064
00:53:26,650 --> 00:53:29,018
Not investors...
clients.
1065
00:53:29,019 --> 00:53:31,654
If customers think their money
wasn't safe with Lehman,
1066
00:53:31,655 --> 00:53:33,489
they're not gonna
trust us either.
1067
00:53:33,490 --> 00:53:36,759
No one will do
business with us.
1068
00:53:36,760 --> 00:53:38,493
You're gonna have
to hang on.
1069
00:53:38,494 --> 00:53:39,925
Tim.
1070
00:53:39,926 --> 00:53:42,394
Dan spoke to Moody's.
They're downgrading A.I.G. tonight.
1071
00:53:42,395 --> 00:53:45,862
Would have happened anyway, but Lehman
put the whole thing into hyperdrive.
1072
00:53:45,863 --> 00:53:47,463
How far down
are they?
1073
00:53:47,464 --> 00:53:49,131
French finance minster
on six.
1074
00:53:49,132 --> 00:53:51,399
They don't know.
1075
00:53:51,400 --> 00:53:54,068
We're working on that.
1076
00:53:54,069 --> 00:53:55,935
Christine.
1077
00:53:55,936 --> 00:53:57,803
How could you let this
happen with Lehman?
1078
00:53:57,804 --> 00:53:59,438
What on earth
were you thinking?
1079
00:53:59,439 --> 00:54:02,273
We did everything
we could, Christine.
1080
00:54:02,274 --> 00:54:04,508
You allowed it
to fail, Hank.
1081
00:54:04,509 --> 00:54:06,310
It was a horrifying
mistake.
1082
00:54:06,311 --> 00:54:09,011
It is having catastrophic
consequences all over Europe.
1083
00:54:09,012 --> 00:54:11,213
And A.I.G. would be
even worse.
1084
00:54:11,214 --> 00:54:14,815
The European banks have
tremendous exposure to A.I.G.
1085
00:54:14,816 --> 00:54:18,317
We need assurance you will not
fail to act as you did with Lehman.
1086
00:54:18,318 --> 00:54:21,169
It is not just
an American problem.
1087
00:54:22,354 --> 00:54:23,820
Thank you so much for...
1088
00:54:23,821 --> 00:54:25,088
John Mack.
1089
00:54:25,089 --> 00:54:26,622
Hey... uh...
1090
00:54:26,623 --> 00:54:28,874
- John.
- Secretary: John... one.
1091
00:54:29,892 --> 00:54:33,161
The fallout from Lehman
is killing us.
1092
00:54:33,162 --> 00:54:35,430
The short-sellers
are all over us.
1093
00:54:35,431 --> 00:54:36,964
We're down
10% already.
1094
00:54:36,965 --> 00:54:39,466
You guys have no idea
what's going on out here.
1095
00:54:39,467 --> 00:54:41,968
How are your earnings?
1096
00:54:41,969 --> 00:54:44,537
Strong. We're gonna
announce Friday.
1097
00:54:44,538 --> 00:54:45,955
Announce now.
1098
00:54:47,374 --> 00:54:49,542
Okay, Lloyd, sorry.
1099
00:54:49,543 --> 00:54:52,645
Hank, if depositors see they can't
get their assets out of Lehman,
1100
00:54:52,646 --> 00:54:54,647
the next step is gonna be
a massive pullout
1101
00:54:54,648 --> 00:54:56,816
from all the investment banks.
1102
00:54:56,817 --> 00:54:58,568
Jeff Immelt from G.E.
1103
00:54:59,788 --> 00:55:02,222
Jesus, what's Immelt
calling you for?
1104
00:55:02,223 --> 00:55:04,092
I have to go.
1105
00:55:04,093 --> 00:55:05,527
Jeff.
1106
00:55:05,528 --> 00:55:07,662
You gotta know
what's going on out here.
1107
00:55:07,663 --> 00:55:10,932
We're having trouble funding
our day-to-day operations.
1108
00:55:10,933 --> 00:55:14,469
Our finance division is infecting
the rest of our business.
1109
00:55:14,470 --> 00:55:16,337
General Electric?
1110
00:55:16,338 --> 00:55:19,473
This thing is spreading
way past Wall Street.
1111
00:55:19,474 --> 00:55:22,109
I get that nobody wants
to touch mortgages,
1112
00:55:22,110 --> 00:55:25,245
but we're making planes
and engines, and light bulbs.
1113
00:55:25,246 --> 00:55:27,714
We're a healthy company.
1114
00:55:27,715 --> 00:55:30,784
If we can't finance
our day-to-day operations,
1115
00:55:30,785 --> 00:55:34,405
every business in America's
gonna be shutting down.
1116
00:55:41,829 --> 00:55:44,063
Where's A.I.G.?
1117
00:55:44,064 --> 00:55:45,398
It closed at $2.
1118
00:55:45,399 --> 00:55:47,833
Tim thinks we need
to do something big.
1119
00:55:47,834 --> 00:55:49,268
Ben agrees,
and so do I.
1120
00:55:49,269 --> 00:55:51,303
What can we do?
A.I.G.'s not even a bank.
1121
00:55:51,304 --> 00:55:53,305
The Fed can lend
to nonbanks
1122
00:55:53,306 --> 00:55:56,041
under unusual and
exigent circumstances.
1123
00:55:56,042 --> 00:55:59,930
We're thinking of taking over
80% of the company.
1124
00:56:02,050 --> 00:56:04,618
Hank, we can't.
1125
00:56:04,619 --> 00:56:07,722
This morning we were lecturing
the entire country on moral hazard.
1126
00:56:07,723 --> 00:56:10,558
A.I.G. has collateral.
They have assets.
1127
00:56:10,559 --> 00:56:13,995
Lehman didn't.
We couldn't lend into a hole.
1128
00:56:13,996 --> 00:56:15,797
It's not
the same story.
1129
00:56:15,798 --> 00:56:17,766
Nobody's gonna care.
1130
00:56:17,767 --> 00:56:20,569
It's another bailout
with no legislation.
1131
00:56:20,570 --> 00:56:22,771
The Hill's gonna go crazy.
The country's gonna go crazy.
1132
00:56:22,772 --> 00:56:24,806
The plane that we
flew in on this morning...
1133
00:56:24,807 --> 00:56:26,774
leased from A.I.G.
1134
00:56:26,775 --> 00:56:29,010
Construction downtown...
A.I.G.
1135
00:56:29,011 --> 00:56:31,980
Life insurance...
81 million policies
1136
00:56:31,981 --> 00:56:34,316
with a face value
of $1.9 trillion,
1137
00:56:34,317 --> 00:56:37,619
billions of dollars in teachers' pensions...
it's everywhere.
1138
00:56:37,620 --> 00:56:40,221
You want too big to fail?
Here it is.
1139
00:56:40,222 --> 00:56:42,223
You got a better idea?
1140
00:56:42,224 --> 00:56:44,541
The suggestion box
is wide open.
1141
00:56:51,132 --> 00:56:53,734
I hate to do this
right now,
1142
00:56:53,735 --> 00:56:56,070
but I'm gonna have to have
a press call first thing,
1143
00:56:56,071 --> 00:56:58,139
and I really don't know
what I'm gonna tell them.
1144
00:56:58,140 --> 00:57:00,810
Tell them Lehman
exacerbated A.I.G.,
1145
00:57:00,811 --> 00:57:03,513
the simultaneous
payouts of C.D.O.s
1146
00:57:03,514 --> 00:57:06,149
and credit default swaps
put catastrophic pressure on...
1147
00:57:06,150 --> 00:57:09,353
Go back further.
1148
00:57:09,354 --> 00:57:11,655
The global pool
of investment capital...
1149
00:57:11,656 --> 00:57:13,790
she has to do this
in English.
1150
00:57:13,791 --> 00:57:15,925
Start with
the homeowners.
1151
00:57:15,926 --> 00:57:18,894
Okay okay, here's how
you explain it.
1152
00:57:18,895 --> 00:57:23,465
Wall Street
started bundling
1153
00:57:23,466 --> 00:57:25,601
home loans together...
mortgage-backed securities...
1154
00:57:25,602 --> 00:57:28,905
and selling slices
of those bundles to investors.
1155
00:57:28,906 --> 00:57:31,174
And they were making
big money,
1156
00:57:31,175 --> 00:57:33,443
so they started pushing
the lenders, saying,
1157
00:57:33,444 --> 00:57:35,512
"come on,
we need more loans.
1158
00:57:35,513 --> 00:57:37,516
The lenders had
already given loans
1159
00:57:37,517 --> 00:57:39,520
to borrowers
with good credit,
1160
00:57:39,521 --> 00:57:42,090
so they go bottom-feeding.
They lower their criteria.
1161
00:57:42,091 --> 00:57:44,793
Before, you needed
a credit score of 620
1162
00:57:44,794 --> 00:57:46,996
and a downpayment
of 20%.
1163
00:57:46,997 --> 00:57:49,532
Now they'll settle for 500,
no money down.
1164
00:57:49,533 --> 00:57:51,767
And the buyer...
the regular guy on the street...
1165
00:57:51,768 --> 00:57:53,569
assumes that the experts
know what they're doing.
1166
00:57:53,570 --> 00:57:56,172
He's saying to himself,
"if the bank's willing to loan me money,
1167
00:57:56,173 --> 00:57:57,940
I must be able
to afford it".
1168
00:57:57,941 --> 00:58:00,276
So he reaches for
the American dream.
1169
00:58:00,277 --> 00:58:01,844
He buys that house.
1170
00:58:01,845 --> 00:58:05,080
The banks knew securities based on
shitbag mortgages were risky.
1171
00:58:05,081 --> 00:58:06,549
You'll work on "shitbag".
1172
00:58:06,550 --> 00:58:08,117
So to control
their downside,
1173
00:58:08,118 --> 00:58:09,952
the banks started buying
a kind of insurance.
1174
00:58:09,953 --> 00:58:13,089
If mortgages default,
insurance company pays...
1175
00:58:13,090 --> 00:58:14,890
default swap.
1176
00:58:14,891 --> 00:58:17,059
The banks insure
their potential losses
1177
00:58:17,060 --> 00:58:18,861
to move the risk
off their books
1178
00:58:18,862 --> 00:58:21,196
so they can invest more,
make more money.
1179
00:58:21,197 --> 00:58:23,400
And when a lot of companies
insured this stuff,
1180
00:58:23,401 --> 00:58:26,936
one was dumb enough to take on
an almost unbelievable amount of risk.
1181
00:58:26,937 --> 00:58:29,405
- A.I.G.
- And you'll work on "dumb".
1182
00:58:29,406 --> 00:58:31,640
And when they ask me
why they did that?
1183
00:58:31,641 --> 00:58:34,009
- Fees.
- Hundreds of millions in fees.
1184
00:58:34,010 --> 00:58:36,612
A.I.G. figured the housing market
would just keep going up,
1185
00:58:36,613 --> 00:58:38,080
but then
the unexpected happens.
1186
00:58:38,081 --> 00:58:40,249
Housing prices
go down.
1187
00:58:40,250 --> 00:58:42,084
The poor bastard who
bought his dream house...
1188
00:58:42,085 --> 00:58:44,253
the teaser rate on his
mortgage runs out.
1189
00:58:44,254 --> 00:58:46,855
His payments go up.
He defaults.
1190
00:58:46,856 --> 00:58:48,657
Mortgage-backed
securities tank.
1191
00:58:48,658 --> 00:58:50,626
A.I.G. has to pay off
the swaps...
1192
00:58:50,627 --> 00:58:52,896
all of them
all over the world
1193
00:58:52,897 --> 00:58:54,931
at the same time.
1194
00:58:54,932 --> 00:58:58,067
A.I.G. can't pay.
A.I.G. goes under.
1195
00:58:58,068 --> 00:59:00,469
Every bank
they insure
1196
00:59:00,470 --> 00:59:04,307
books massive losses
on the same day.
1197
00:59:04,308 --> 00:59:06,509
And then they all
go under.
1198
00:59:06,510 --> 00:59:09,028
It all comes down.
1199
00:59:09,880 --> 00:59:12,531
The whole financial system?
1200
00:59:17,187 --> 00:59:19,490
And what do I say
1201
00:59:19,491 --> 00:59:22,259
when they ask me
why it wasn't regulated?
1202
00:59:22,260 --> 00:59:26,129
No one wanted to.
1203
00:59:26,130 --> 00:59:29,616
We were making
too much money.
1204
00:59:39,344 --> 00:59:41,311
You'll work on
1205
00:59:41,312 --> 00:59:44,064
"we were making
too much money".
1206
00:59:56,262 --> 00:59:58,563
Hey, Hank,
1207
00:59:58,564 --> 01:00:01,099
um...
1208
01:00:01,100 --> 01:00:03,134
These are
really mild,
1209
01:00:03,135 --> 01:00:05,270
but they work.
1210
01:00:05,271 --> 01:00:08,406
I know the whole
Christian Scientist thing...
1211
01:00:08,407 --> 01:00:11,643
that you don't
take medicine.
1212
01:00:11,644 --> 01:00:14,462
But you need
to sleep.
1213
01:00:16,349 --> 01:00:18,084
Jim...
1214
01:00:18,085 --> 01:00:20,419
Hank, not just
for your own sake.
1215
01:00:20,420 --> 01:00:22,671
Okay?
1216
01:00:26,593 --> 01:00:28,878
You don't look
so good.
1217
01:00:33,300 --> 01:00:35,868
Just minutes ago
CNN has confirmed
1218
01:00:35,869 --> 01:00:38,137
that the Federal Reserve
is negotiating
1219
01:00:38,138 --> 01:00:40,506
to rescue
insurance giant AIG
1220
01:00:40,507 --> 01:00:42,509
The negotiations
could include
1221
01:00:42,510 --> 01:00:44,978
an $85 billion
temporary loan
1222
01:00:44,979 --> 01:00:47,182
to stave off
AIG's imminent collapse.
1223
01:00:47,183 --> 01:00:48,816
This is a blockbuster,
folks.
1224
01:00:48,817 --> 01:00:51,319
About this time last night,
many on Wall Street
1225
01:00:51,320 --> 01:00:53,487
were fearing
total disaster today.
1226
01:00:53,488 --> 01:00:55,488
So another
federal bailout...
1227
01:00:55,489 --> 01:00:57,390
of another
Wall Street giant...
1228
01:00:57,391 --> 01:00:59,959
again, as we mentioned,
big big financial news.
1229
01:00:59,960 --> 01:01:03,629
And this affects almost everyone
out there who has a 401k.
1230
01:01:03,630 --> 01:01:05,498
The news comes about
3 and 1/2 hours...
1231
01:01:05,499 --> 01:01:07,867
after the stock exchange
closed on...
1232
01:01:07,868 --> 01:01:10,636
Motherfucker.
1233
01:01:10,637 --> 01:01:12,705
We want to go straight
right now to Ali Velshi
1234
01:01:12,706 --> 01:01:14,874
to kind of give us
a bottom line on this, Ali.
1235
01:01:14,875 --> 01:01:17,043
And then we're gonna get
a lot more in depth...
1236
01:01:17,044 --> 01:01:18,745
AIG securing an 85...
1237
01:01:18,746 --> 01:01:20,746
The credit markets
are still frozen solid.
1238
01:01:20,747 --> 01:01:22,749
We keep dumping money
into these companies
1239
01:01:22,750 --> 01:01:25,986
so the markets
will stabilize,
1240
01:01:25,987 --> 01:01:27,454
and nothing helps.
1241
01:01:27,455 --> 01:01:30,123
We can't keep
doing this.
1242
01:01:30,124 --> 01:01:32,759
We rescued Bear
with no legislation,
1243
01:01:32,760 --> 01:01:36,196
A.I.G. with no legislation.
1244
01:01:36,197 --> 01:01:38,598
People think Fannie and Freddie
was a bait-and-switch.
1245
01:01:38,599 --> 01:01:40,200
I don't like it
any more than you do,
1246
01:01:40,201 --> 01:01:42,135
but they were
exceptional situations.
1247
01:01:42,136 --> 01:01:45,172
This situation
demands an endgame
1248
01:01:45,173 --> 01:01:48,441
that does not rely on
unilateral action from the Fed.
1249
01:01:48,442 --> 01:01:50,109
This is a democracy.
1250
01:01:50,110 --> 01:01:52,746
We cannot be men behind the
curtain pulling the strings.
1251
01:01:52,747 --> 01:01:54,915
We need some kind of
an overall solution
1252
01:01:54,916 --> 01:01:57,284
that heals
the entire system.
1253
01:01:57,285 --> 01:01:59,486
And it has to be
legitimate.
1254
01:01:59,487 --> 01:02:01,121
We've been putting off
going to Congress.
1255
01:02:01,122 --> 01:02:03,057
It's two months
before an election.
1256
01:02:03,058 --> 01:02:06,260
They can't vote yes
to a massive bailout
1257
01:02:06,261 --> 01:02:08,028
of the entire
banking system.
1258
01:02:08,029 --> 01:02:09,530
They'd never get
reelected.
1259
01:02:09,531 --> 01:02:11,532
- Hank...
- We go to Congress,
1260
01:02:11,533 --> 01:02:14,135
publically state
we don't have the firepower
1261
01:02:14,136 --> 01:02:16,637
to control this
anymore,
1262
01:02:16,638 --> 01:02:18,673
and then they say no...
1263
01:02:18,674 --> 01:02:22,810
that is really
the nightmare scenario.
1264
01:02:22,811 --> 01:02:27,415
The nightmare scenario's
already here, my friend.
1265
01:02:27,416 --> 01:02:30,935
We're in it.
1266
01:03:30,113 --> 01:03:32,364
P.
1267
01:03:43,126 --> 01:03:45,194
You can't put this all
on your own shoulders.
1268
01:03:45,195 --> 01:03:46,929
We're running out
of options.
1269
01:03:46,930 --> 01:03:49,498
Then you just
keep trying.
1270
01:03:49,499 --> 01:03:51,634
That's what you do.
1271
01:03:51,635 --> 01:03:53,802
Eventually
something's gonna work.
1272
01:03:53,803 --> 01:03:56,772
I'm not sure that
that is true anymore.
1273
01:03:56,773 --> 01:03:59,341
There's not a bank
in the world
1274
01:03:59,342 --> 01:04:01,343
that has enough money
in its vault
1275
01:04:01,344 --> 01:04:02,844
to pay
its depositors.
1276
01:04:02,845 --> 01:04:05,481
It's all built
on trust.
1277
01:04:05,482 --> 01:04:07,784
And...
and, Wendy, we...
1278
01:04:07,785 --> 01:04:11,504
we are
so very close.
1279
01:04:14,291 --> 01:04:18,061
Morgan Stanley, Goldman
are an inch away.
1280
01:04:18,062 --> 01:04:20,830
If the other banks
stop trusting them,
1281
01:04:20,831 --> 01:04:23,833
if they pull back
on interbank lending,
1282
01:04:23,834 --> 01:04:26,135
it's over
in a matter of hours.
1283
01:04:26,136 --> 01:04:28,671
And from there
it goes
1284
01:04:28,672 --> 01:04:30,673
too fast to stop...
a run...
1285
01:04:30,674 --> 01:04:33,442
and not just
on that one bank.
1286
01:04:33,443 --> 01:04:35,445
I mean,
on the whole system.
1287
01:04:35,446 --> 01:04:38,348
And average people
wondering,
1288
01:04:38,349 --> 01:04:40,816
"is my money safe?"
1289
01:04:40,817 --> 01:04:43,868
They start pulling
their cash.
1290
01:04:45,688 --> 01:04:47,655
And after that...
1291
01:04:47,656 --> 01:04:50,926
lines outside the banks,
smashed A.T.M.s.
1292
01:04:50,927 --> 01:04:54,330
A couple of weeks...
1293
01:04:54,331 --> 01:04:57,333
there's no milk
in the store.
1294
01:04:57,334 --> 01:04:59,235
For the second time
this week
1295
01:04:59,236 --> 01:05:01,070
there was a massive selloff
on Wall Street,
1296
01:05:01,071 --> 01:05:04,675
the Dow Jones Industrials
freefalling some 450 points
1297
01:05:04,676 --> 01:05:06,677
on news of
a taxpayer-funded bailout
1298
01:05:06,678 --> 01:05:08,612
of the A.I.G.
Insurance company.
1299
01:05:08,613 --> 01:05:11,014
Three of the five
investment banks are gone.
1300
01:05:11,015 --> 01:05:13,450
The country's biggest
mortgage lender is gone.
1301
01:05:13,451 --> 01:05:16,220
Fannie Mae and Freddie Mac
brought under government control.
1302
01:05:16,221 --> 01:05:18,356
The financial system
is holding right now,
1303
01:05:18,357 --> 01:05:19,992
but for how long?
1304
01:05:19,993 --> 01:05:22,662
All the King's horses
and all the King's men
1305
01:05:22,663 --> 01:05:25,214
are being brought to bear
to keep this thing together.
1306
01:05:51,688 --> 01:05:52,854
Hi Tim.
1307
01:05:52,855 --> 01:05:54,822
I'm on the street, Hank,
1308
01:05:54,823 --> 01:05:57,024
and people are just
going about their business.
1309
01:05:57,025 --> 01:06:00,361
They have no idea the whole
thing is about to fall down.
1310
01:06:00,362 --> 01:06:02,930
We're gonna have to
go to Congress.
1311
01:06:02,931 --> 01:06:04,531
We don't have
a choice anymore.
1312
01:06:04,532 --> 01:06:06,233
Okay.
1313
01:06:06,234 --> 01:06:08,267
How fast do you think
you can get them to move?
1314
01:06:08,268 --> 01:06:10,469
It's gonna be at least
a couple days.
1315
01:06:10,470 --> 01:06:13,706
Goldman and Morgan Stanley
are going down now.
1316
01:06:13,707 --> 01:06:15,408
We gotta do
something today.
1317
01:06:15,409 --> 01:06:16,609
Like what?
1318
01:06:16,610 --> 01:06:18,745
The market doesn't like
investment banks, right?
1319
01:06:18,746 --> 01:06:21,180
The money's saying fuck you
to the whole business model.
1320
01:06:21,181 --> 01:06:22,715
Yeah.
1321
01:06:22,716 --> 01:06:25,819
Yeah, so merge them
with commercial banks,
1322
01:06:25,820 --> 01:06:27,955
turn them into regular banks
regulated by the Fed.
1323
01:06:27,956 --> 01:06:29,690
They can use
depositors' cash.
1324
01:06:29,691 --> 01:06:31,693
It will give them access
to the discount window.
1325
01:06:31,694 --> 01:06:34,662
It's cheap government cash.
1326
01:06:34,663 --> 01:06:37,565
- You want to make them bigger?
- It's a trade-off, Hank.
1327
01:06:37,566 --> 01:06:41,503
The upside is
it'll stabilize them.
1328
01:06:41,504 --> 01:06:44,072
The downside is,
1329
01:06:44,073 --> 01:06:48,076
yeah, they'll be
really fucking big.
1330
01:06:48,077 --> 01:06:50,429
Do it, Tim.
1331
01:06:52,249 --> 01:06:54,267
Godspeed.
1332
01:07:11,473 --> 01:07:14,192
Get me Blankfein.
1333
01:07:15,544 --> 01:07:17,846
Lloyd, call Vikram Pandit,
talk to him about a merger.
1334
01:07:17,847 --> 01:07:19,882
Tim, we're looking
at all our options.
1335
01:07:19,883 --> 01:07:21,885
You don't have
options, Lloyd.
1336
01:07:21,886 --> 01:07:23,386
There's a run
on your bank.
1337
01:07:23,387 --> 01:07:25,256
You need money...
Citi has deposits.
1338
01:07:25,257 --> 01:07:28,276
Citi is a mess...
you're organized. Call Pandit.
1339
01:07:37,539 --> 01:07:38,904
Yeah.
1340
01:07:38,905 --> 01:07:40,608
I want you to look at merging
with Morgan Stanley.
1341
01:07:40,609 --> 01:07:42,577
What, are you kidding me?
I just bought Bear.
1342
01:07:42,578 --> 01:07:44,212
We're still trying
to make that work.
1343
01:07:44,213 --> 01:07:46,348
You didn't buy Bear.
You got Bear as a Christmas present.
1344
01:07:46,349 --> 01:07:48,217
The market's a fucking
disaster, Jamie.
1345
01:07:48,218 --> 01:07:50,386
Talk to John Mack.
1346
01:07:50,387 --> 01:07:53,156
Hey, Geithner says
we should talk about a merger.
1347
01:07:53,157 --> 01:07:55,292
- You want to do a deal?
- No.
1348
01:07:55,293 --> 01:07:57,462
Then why the fuck did he
tell me to call you?
1349
01:07:57,463 --> 01:07:59,698
I'm under orders
to try and help you.
1350
01:07:59,699 --> 01:08:03,252
You're a prince, Jamie...
a real prince.
1351
01:08:06,640 --> 01:08:08,942
Apparently some people
seem to think
1352
01:08:08,943 --> 01:08:11,178
combining our firms
would be a good idea.
1353
01:08:11,179 --> 01:08:14,148
Well, I want you to know
I'm flattered by this call.
1354
01:08:14,149 --> 01:08:16,317
Vikram,
I'm not trying
1355
01:08:16,318 --> 01:08:18,419
to flatter you,
believe me.
1356
01:08:18,420 --> 01:08:20,021
Geithner's calling.
1357
01:08:20,022 --> 01:08:22,424
Oh, here comes
goddamn eharmony.
1358
01:08:22,425 --> 01:08:25,044
Hey, guess what.
Jaime's not interested.
1359
01:08:26,797 --> 01:08:28,966
Do Wachovia.
1360
01:08:28,967 --> 01:08:31,134
They were writing mortgages
with their eyes closed.
1361
01:08:31,135 --> 01:08:33,453
Tim, it's a shit sandwich.
Forget it.
1362
01:08:38,975 --> 01:08:41,210
Well, I haven't been
able to reach you for four hours.
1363
01:08:41,211 --> 01:08:44,614
That is... that is totally fucking
unacceptable on a day like today.
1364
01:08:44,615 --> 01:08:47,583
I had to run my team
through the Goldman proposal.
1365
01:08:47,584 --> 01:08:49,251
It's not gonna work.
1366
01:08:49,252 --> 01:08:52,688
You passed on Goldman
without even talking to me?
1367
01:08:52,689 --> 01:08:56,008
I don't need another trillion
dollars on my balance sheet.
1368
01:08:59,596 --> 01:09:03,816
Next time I call,
pick up.
1369
01:09:04,568 --> 01:09:06,736
Fucker.
1370
01:09:06,737 --> 01:09:09,872
The problem is the toxic assets.
Let's just buy them.
1371
01:09:09,873 --> 01:09:12,141
Ooh, call it
cash-for-trash.
1372
01:09:12,142 --> 01:09:14,875
When the market stabilizes,
we'll unload them.
1373
01:09:14,876 --> 01:09:16,976
Hopefully Treasury will
get its money back.
1374
01:09:16,977 --> 01:09:19,512
- Is that in the break-the-glass plan?
- Basically.
1375
01:09:19,513 --> 01:09:21,523
My copy's missing some pages.
1376
01:09:21,524 --> 01:09:22,866
Could someone else show me
the rest of...
1377
01:09:22,867 --> 01:09:25,014
It's succinct.
1378
01:09:25,015 --> 01:09:27,216
We've got one shot
with Congress.
1379
01:09:27,217 --> 01:09:30,884
You want them to write a piece
of legislation based on three pages?
1380
01:09:30,885 --> 01:09:32,252
Look, guys,
1381
01:09:32,253 --> 01:09:34,519
buying toxic assets
is gonna be a nightmare.
1382
01:09:34,520 --> 01:09:36,353
Nobody knows what
the stuff's worth.
1383
01:09:36,354 --> 01:09:39,154
It'll take forever to untangle.
These banks are going down now.
1384
01:09:39,155 --> 01:09:40,321
So what do we do?
1385
01:09:40,322 --> 01:09:42,023
You want to unfreeze
credit, right?
1386
01:09:42,024 --> 01:09:43,658
You want the banks
to lend people money?
1387
01:09:43,659 --> 01:09:46,745
- That's the goal.
- So give them money to lend.
1388
01:09:48,999 --> 01:09:50,933
Capital injections?
1389
01:09:50,934 --> 01:09:52,524
Dan, come on.
1390
01:09:52,525 --> 01:09:53,926
I can't believe you're
pulling out the "n" word.
1391
01:09:53,927 --> 01:09:55,206
I'm not saying
nationalize the banks.
1392
01:09:55,207 --> 01:09:56,438
I'm saying isolate the ones
1393
01:09:56,439 --> 01:09:58,440
that are really in trouble
and make an investment.
1394
01:09:58,441 --> 01:09:59,841
It's unamerican.
1395
01:09:59,842 --> 01:10:01,809
It's... it's sure
unrepublican.
1396
01:10:01,810 --> 01:10:04,311
You make the government
a stockholder...
1397
01:10:04,312 --> 01:10:06,113
what, do we tell them
1398
01:10:06,114 --> 01:10:08,716
how to manage themselves,
what to buy and sell?
1399
01:10:08,717 --> 01:10:10,558
Run them like the post Office?
1400
01:10:10,559 --> 01:10:11,751
'Cause that works
like a dream.
1401
01:10:11,752 --> 01:10:13,251
We make it
temporary.
1402
01:10:13,252 --> 01:10:15,819
We make ourselves
nonvoting stockholders.
1403
01:10:15,820 --> 01:10:18,888
You can't just hand the banks
massive piles of cash.
1404
01:10:18,889 --> 01:10:20,756
Nobody's gonna
go for it.
1405
01:10:20,757 --> 01:10:22,557
To the Republican's
it's nationalization.
1406
01:10:22,558 --> 01:10:24,358
To the Democrats
it's a bailout.
1407
01:10:24,359 --> 01:10:26,426
And the banks are
gonna go ballistic.
1408
01:10:26,427 --> 01:10:29,262
Sorry, Dan,
not gonna happen.
1409
01:10:29,263 --> 01:10:31,229
Kudos for
out-of-the-box thinking.
1410
01:10:31,230 --> 01:10:33,964
Neel, if we go with your
plan to buy the assets,
1411
01:10:33,965 --> 01:10:36,298
how much is it
gonna cost?
1412
01:10:36,299 --> 01:10:37,699
It won't work.
1413
01:10:37,700 --> 01:10:41,135
Look, the plan is
three pages long, totally vague.
1414
01:10:41,136 --> 01:10:43,069
If buying the assets
doesn't work,
1415
01:10:43,070 --> 01:10:45,038
we'll nationalize
the banks for you, okay?
1416
01:10:45,039 --> 01:10:46,506
How much?
1417
01:10:46,507 --> 01:10:49,775
To be safe,
maybe a trillion.
1418
01:10:49,776 --> 01:10:53,110
The Congress will never do
a trillion... never.
1419
01:10:53,111 --> 01:10:56,747
Well, there's $11 trillion
in residential mortgages.
1420
01:10:56,748 --> 01:10:59,282
There's $3 trillion
in commercial mortgages.
1421
01:10:59,283 --> 01:11:01,984
That's $14 trillion,
right?
1422
01:11:01,985 --> 01:11:04,953
You gotta figure
about 5% default rate.
1423
01:11:04,954 --> 01:11:07,788
5% of $14 trillion
1424
01:11:07,789 --> 01:11:12,207
is $700 billion.
1425
01:11:14,761 --> 01:11:17,812
It's better
than a trillion.
1426
01:11:20,464 --> 01:11:22,397
The only way
to get this done
1427
01:11:22,398 --> 01:11:24,432
is to just
scare them shitless.
1428
01:11:24,433 --> 01:11:28,216
That should be easy.
I'm scared shitless myself.
1429
01:11:39,941 --> 01:11:43,043
Troubled Asset
Relief Program?
1430
01:11:43,044 --> 01:11:44,744
T.A.R.P.
We're calling it.
1431
01:11:44,745 --> 01:11:47,245
This is your draft
of the bill?
1432
01:11:47,246 --> 01:11:50,731
Subject to revision
certainly.
1433
01:11:52,249 --> 01:11:54,283
Well, I've only got
three pages here.
1434
01:11:54,284 --> 01:11:55,784
Am I missing something?
1435
01:11:55,785 --> 01:11:57,169
No.
1436
01:11:58,987 --> 01:12:02,321
You're just looking for a
big blank check in a hurry.
1437
01:12:02,322 --> 01:12:05,824
It's all for the banks.
You don't want a penny
1438
01:12:05,825 --> 01:12:08,292
for the average Joe
that's about to lose his house?
1439
01:12:08,293 --> 01:12:10,395
There's not a scrap of oversight
built into this...
1440
01:12:10,396 --> 01:12:12,897
not for the banks
or for you for that matter.
1441
01:12:12,898 --> 01:12:14,899
You want us
to simply hand over
1442
01:12:14,900 --> 01:12:18,135
$700 billion
and trust you?
1443
01:12:18,136 --> 01:12:20,937
How is it possible
you didn't see this coming?
1444
01:12:20,938 --> 01:12:23,039
If you want to rewind the tape,
we can do that.
1445
01:12:23,040 --> 01:12:26,375
But right now the one thing
we don't have is time.
1446
01:12:26,376 --> 01:12:29,044
We need an announcement tonight
to calm the market.
1447
01:12:29,045 --> 01:12:31,330
We need legislation
next week.
1448
01:12:34,451 --> 01:12:39,322
I spent my entire
academic career
1449
01:12:39,323 --> 01:12:42,642
studying
the Great Depression.
1450
01:12:44,095 --> 01:12:46,329
The Depression
may have started
1451
01:12:46,330 --> 01:12:48,698
because of
a stock market crash,
1452
01:12:48,699 --> 01:12:51,969
but what hit
the general economy
1453
01:12:51,970 --> 01:12:53,904
was a disruption
of credit...
1454
01:12:53,905 --> 01:12:55,973
average citizens
unable to borrow money
1455
01:12:55,974 --> 01:12:58,208
to do anything...
to buy a home,
1456
01:12:58,209 --> 01:13:02,479
start a business,
stock their shelves.
1457
01:13:02,480 --> 01:13:06,082
Credit has the ability
to build a modern economy,
1458
01:13:06,083 --> 01:13:08,452
but lack of credit
has the power to destroy it,
1459
01:13:08,453 --> 01:13:11,038
swiftly and absolutely.
1460
01:13:12,724 --> 01:13:15,661
If we do not act
boldly and immediately,
1461
01:13:15,662 --> 01:13:18,798
we will replay
the Depression of the 1930s,
1462
01:13:18,799 --> 01:13:22,269
only this time
it will be
1463
01:13:22,270 --> 01:13:25,223
far far worse.
1464
01:13:26,175 --> 01:13:28,177
We don't
do this now...
1465
01:13:28,178 --> 01:13:31,898
we won't have
an economy on Monday.
1466
01:13:39,795 --> 01:13:41,646
Geithner.
1467
01:13:46,271 --> 01:13:48,206
We took the proposal
down to Congress.
1468
01:13:48,207 --> 01:13:49,441
Are they gonna
go for it?
1469
01:13:49,442 --> 01:13:51,243
They didn't like the fact
that it was short.
1470
01:13:51,244 --> 01:13:53,979
I thought concise was a plus.
They thought it was flimsy
1471
01:13:53,980 --> 01:13:56,448
or arrogant
or something.
1472
01:13:56,449 --> 01:13:59,384
I don't know what they think.
They couldn't get past it.
1473
01:13:59,385 --> 01:14:01,820
The market's in a death spiral.
They're gonna sink the bill
1474
01:14:01,821 --> 01:14:03,622
because the proposal
is too fucking short?
1475
01:14:03,623 --> 01:14:07,192
They're working on it.
They're gonna make it longer,
1476
01:14:07,193 --> 01:14:09,394
among other things.
1477
01:14:09,395 --> 01:14:11,764
Look,
1478
01:14:11,765 --> 01:14:13,849
just tell me
you got something.
1479
01:14:16,203 --> 01:14:19,606
No.
No, we're nowhere.
1480
01:14:19,607 --> 01:14:21,207
Who's left
for Morgan Stanley?
1481
01:14:21,208 --> 01:14:25,361
China Investment
Corporation.
1482
01:14:26,380 --> 01:14:28,680
Mae Mitsubishi.
1483
01:14:28,681 --> 01:14:31,317
No, the Japanese will
never do this deal.
1484
01:14:31,318 --> 01:14:32,919
How about Goldman?
1485
01:14:32,920 --> 01:14:35,823
Goldman's looking at Wachovia,
but they're so fucked,
1486
01:14:35,824 --> 01:14:37,975
even John Mack
turned up his nose.
1487
01:14:40,596 --> 01:14:42,631
You gotta get
that bill passed.
1488
01:14:42,632 --> 01:14:43,899
I'm pushing.
1489
01:14:43,900 --> 01:14:45,901
Well, push harder,
1490
01:14:45,902 --> 01:14:48,554
please.
1491
01:14:49,740 --> 01:14:53,192
This isn't working, Hank.
1492
01:15:06,791 --> 01:15:08,993
Hank?
1493
01:15:08,994 --> 01:15:11,446
Could you excuse me
a moment?
1494
01:15:32,556 --> 01:15:34,625
Oh my God.
1495
01:15:34,626 --> 01:15:37,395
GAO, GAO,
1496
01:15:37,396 --> 01:15:40,732
I am so sorry about this.
There's nothing we can do.
1497
01:15:40,733 --> 01:15:42,734
It's New York, you know.
We're lucky
1498
01:15:42,735 --> 01:15:45,037
we can still buy a beer
at Yankee Stadium.
1499
01:15:45,038 --> 01:15:47,807
Don't worry about it.
I should quit anyway.
1500
01:15:47,808 --> 01:15:50,361
When you're ready,
we'll be inside.
1501
01:15:53,850 --> 01:15:55,650
Is there any
movement there?
1502
01:15:55,651 --> 01:15:57,887
They made an extremely
low opening offer.
1503
01:15:57,888 --> 01:16:00,225
I pretended
I didn't hear it.
1504
01:16:00,226 --> 01:16:02,261
The markets
can't open Monday
1505
01:16:02,262 --> 01:16:04,697
without a resolution
on Morgan Stanley.
1506
01:16:04,698 --> 01:16:07,200
We really need you
to do a deal.
1507
01:16:07,201 --> 01:16:09,568
- You need to call Jamie.
- I called Jamie.
1508
01:16:09,569 --> 01:16:11,802
He doesn't want us.
There's too much overlap.
1509
01:16:11,803 --> 01:16:13,203
We've spoken to him.
He'll do it.
1510
01:16:13,204 --> 01:16:15,906
For what, a dollar?
Why would I do that?
1511
01:16:15,907 --> 01:16:17,574
I got
China Investment
1512
01:16:17,575 --> 01:16:19,343
and Mitsubishi
kicking my tires.
1513
01:16:19,344 --> 01:16:22,913
I know those guys. They're not
gonna close a deal in time.
1514
01:16:22,914 --> 01:16:26,116
We want you
to call Jamie.
1515
01:16:26,117 --> 01:16:27,952
Let me ask you
a question.
1516
01:16:27,953 --> 01:16:30,955
35,000 jobs just
disappeared in this city
1517
01:16:30,956 --> 01:16:33,157
between A.I.G.,
Lehman and Bear.
1518
01:16:33,158 --> 01:16:34,659
We make a deal
with Jamie...
1519
01:16:34,660 --> 01:16:37,729
he'll fire 20,000
Morgan Stanley employees.
1520
01:16:37,730 --> 01:16:39,897
You think that's good
public policy?
1521
01:16:39,898 --> 01:16:43,367
John, we are looking
at the whole system here.
1522
01:16:43,368 --> 01:16:45,343
The Chinese are leaving.
1523
01:16:45,344 --> 01:16:46,904
GAO found out we're also
talking to Mitsubishi.
1524
01:16:46,905 --> 01:16:48,673
I gotta go.
1525
01:16:48,674 --> 01:16:52,243
All right, get me Kuroyanagi
and a Japanese translator.
1526
01:16:52,244 --> 01:16:54,279
We're closing with
Mitsubishi tonight.
1527
01:16:54,280 --> 01:16:56,915
Tim Geithner's
calling again.
1528
01:16:56,916 --> 01:16:58,443
Cover your ears.
1529
01:16:58,444 --> 01:17:00,152
You tell Tim Geithner
to fucking blow me.
1530
01:17:00,153 --> 01:17:02,470
I'm trying to save
my company.
1531
01:17:04,823 --> 01:17:07,759
Put him on the schedule,
but make sure it's after lunch,
1532
01:17:07,760 --> 01:17:10,863
because that way I can
fit Maddle in beforehand.
1533
01:17:10,864 --> 01:17:13,867
Morgan just made a deal
with Mitsubishi.
1534
01:17:13,868 --> 01:17:15,869
So we're
the only bank
1535
01:17:15,870 --> 01:17:18,205
with our dick
still in the wind.
1536
01:17:18,206 --> 01:17:21,559
I'm calling
Buffett again.
1537
01:17:26,083 --> 01:17:28,485
Grandpa, they keep calling.
What if it's important?
1538
01:17:28,486 --> 01:17:31,071
They always think
it's important.
1539
01:17:33,225 --> 01:17:36,911
All right,
I'll make it fast.
1540
01:17:38,164 --> 01:17:40,199
Warren, thanks for calling back.
How are you?
1541
01:17:40,200 --> 01:17:42,234
Just fine, Lloyd.
1542
01:17:42,235 --> 01:17:43,933
What can I do
for you today?
1543
01:17:43,934 --> 01:17:46,633
I'd like to talk to you about
taking a stake in Goldman Sachs.
1544
01:17:46,634 --> 01:17:49,301
What do you have in mind?
Sounds expensive.
1545
01:17:49,302 --> 01:17:51,619
Maybe not.
1546
01:17:53,238 --> 01:17:55,806
You'd better have
good news,
1547
01:17:55,807 --> 01:17:58,106
because I might be dead
before we finish
1548
01:17:58,107 --> 01:18:00,307
haggling over TARP.
1549
01:18:00,308 --> 01:18:03,393
Buffett's throwing
$5 billion into Goldman.
1550
01:18:06,280 --> 01:18:08,848
We're off the ledge.
1551
01:18:08,849 --> 01:18:10,917
For a moment.
1552
01:18:10,918 --> 01:18:13,553
The October surprise
arrived a little early
1553
01:18:13,554 --> 01:18:16,323
with a game-changing jolt
to the White House race.
1554
01:18:16,324 --> 01:18:18,291
Call it a master stroke
1555
01:18:18,292 --> 01:18:20,327
or a desperate
Hail-Mary pass...
1556
01:18:20,328 --> 01:18:23,598
McCain announced he would
suspend his campaign
1557
01:18:23,599 --> 01:18:26,735
and asked for this Friday's
debate to be postponed
1558
01:18:26,736 --> 01:18:30,006
So he can return to Washington
to focus on the economic crisis.
1559
01:18:30,007 --> 01:18:33,176
Now is our chance
to come together,
1560
01:18:33,177 --> 01:18:35,912
to prove that Washington
is once again
1561
01:18:35,913 --> 01:18:39,115
capable of leading
this country.
1562
01:18:39,116 --> 01:18:42,018
Thank God he came back.
1563
01:18:42,019 --> 01:18:46,221
Like Daniel Day Lewis
in "Last of the Mohicans,"
1564
01:18:46,222 --> 01:18:49,007
he will find us!
1565
01:18:50,494 --> 01:18:52,761
- They're blowing it up.
- What happened?
1566
01:18:52,762 --> 01:18:54,496
McCain wanted to swoop in
and save the day,
1567
01:18:54,497 --> 01:18:56,131
but doesn't have any idea
how to do it.
1568
01:18:56,132 --> 01:18:58,066
It's 100-page
piece of legislation
1569
01:18:58,067 --> 01:19:00,135
we've been carefully
negotiating for days.
1570
01:19:00,136 --> 01:19:02,337
What, did he think they were
gonna sit around and spitball?
1571
01:19:02,338 --> 01:19:04,306
Yeah, when McCain
got here
1572
01:19:04,307 --> 01:19:07,609
and found out that the deal
was basically done, he went apeshit.
1573
01:19:07,610 --> 01:19:09,511
The Republicans fell in
behind their guy.
1574
01:19:09,512 --> 01:19:11,246
They want to start
all over again.
1575
01:19:11,247 --> 01:19:13,515
Democrats flipped out.
Republicans dug in.
1576
01:19:13,516 --> 01:19:15,950
Clusterfuck.
1577
01:19:15,951 --> 01:19:19,288
- Where's Hank?
- Still talking to McCain.
1578
01:19:19,289 --> 01:19:21,724
If you or anyone else
does anything
1579
01:19:21,725 --> 01:19:25,261
that causes a depression,
it is not gonna be on me.
1580
01:19:25,262 --> 01:19:27,888
I have a big mouth, Senator...
1581
01:19:27,889 --> 01:19:29,064
- a very big mouth.
- Hold on...
1582
01:19:29,065 --> 01:19:31,533
He's not threatening
1583
01:19:31,534 --> 01:19:34,002
the Republican
Presidential Nominee, is he?
1584
01:19:34,003 --> 01:19:36,504
- Something's got to be done.
- No no. Excuse me, please.
1585
01:19:36,505 --> 01:19:38,506
Where are the Democrats?
1586
01:19:38,507 --> 01:19:40,341
They're right down
this way.
1587
01:19:40,342 --> 01:19:41,909
- Is Nancy there?
- Yes. Yes, she is.
1588
01:19:41,910 --> 01:19:43,361
Thank you.
1589
01:19:50,920 --> 01:19:53,004
Nancy...
1590
01:19:56,524 --> 01:19:58,826
Gee, Hank.
1591
01:19:58,827 --> 01:20:00,877
I didn't know
you were Catholic.
1592
01:20:02,362 --> 01:20:04,497
I beg of you, don't blow this up.
It was a bad meeting,
1593
01:20:04,498 --> 01:20:06,566
but we need to get
together on this.
1594
01:20:06,567 --> 01:20:08,568
We're not the ones
trying to blow it up.
1595
01:20:08,569 --> 01:20:11,189
I just ask you
to stay with us.
1596
01:20:13,142 --> 01:20:16,345
Please.
1597
01:20:16,346 --> 01:20:18,180
The House began debating
the rescue bill
1598
01:20:18,181 --> 01:20:19,682
at 9:27 this morning.
1599
01:20:19,683 --> 01:20:22,484
At about 1:28 pm
Congress did finally act.
1600
01:20:22,485 --> 01:20:24,820
- This is a squeaker of a vote.
- We are down to it right now.
1601
01:20:24,821 --> 01:20:27,089
It looks like the Democrats
delivered their caucus
1602
01:20:27,090 --> 01:20:29,292
and the Republicans
so far have not.
1603
01:20:29,293 --> 01:20:31,527
What do you think they could do
to change the bill
1604
01:20:31,528 --> 01:20:33,429
to get a few Republican votes
over to the other side?
1605
01:20:33,430 --> 01:20:35,231
If they hang
Wall Street CEOs,
1606
01:20:35,232 --> 01:20:36,666
I think that would get
a few more votes.
1607
01:20:36,667 --> 01:20:38,467
You know, I'm not...
I'm not sure
1608
01:20:38,468 --> 01:20:40,369
what they could do
exactly.
1609
01:20:40,370 --> 01:20:43,773
It is possible that the leadership
of the Congress would conclude
1610
01:20:43,774 --> 01:20:46,777
that there's nothing that can
get a majority of support
1611
01:20:46,778 --> 01:20:49,662
and see what Hank Paulson can do
and the administration can do...
1612
01:20:51,448 --> 01:20:53,516
Leaders are negotiating
right now
1613
01:20:53,517 --> 01:20:55,751
who'll risk their seats.
And that's what I'm hearing.
1614
01:20:55,752 --> 01:20:58,308
Pelosi wouldn't have brought
the bill to the floor if she
1615
01:20:58,309 --> 01:20:59,486
didn't think it would pass.
1616
01:20:59,487 --> 01:21:01,091
I don't know the answer
to that, Charlie. I can't answer.
1617
01:21:01,092 --> 01:21:03,093
I'm just reading an email
that's coming to me.
1618
01:21:03,094 --> 01:21:04,497
I think the bottom line
1619
01:21:04,498 --> 01:21:05,629
is they gotta go back
to the drawing board.
1620
01:21:05,630 --> 01:21:07,330
Do they have the time
though to do that?
1621
01:21:07,331 --> 01:21:09,063
Look at the Dow Jones
Industrial Average.
1622
01:21:09,064 --> 01:21:10,998
Well, you know,
you're gonna get a...
1623
01:21:10,999 --> 01:21:12,133
At this point we just
1624
01:21:12,134 --> 01:21:13,535
gotta hold on to the sides
of the kayak
1625
01:21:13,536 --> 01:21:15,001
and ride through this
because...
1626
01:21:15,002 --> 01:21:16,969
They didn't pass it.
1627
01:21:16,970 --> 01:21:19,004
- They did not pass it.
- It just wasn't enough.
1628
01:21:19,005 --> 01:21:23,207
They're gonna end up being
nine votes short, Bill.
1629
01:21:23,208 --> 01:21:24,908
Say that again, Steve.
1630
01:21:24,909 --> 01:21:26,842
I think they're gonna end up
being nine votes...
1631
01:21:26,843 --> 01:21:29,110
if they get all six...
five of the remaining votes,
1632
01:21:29,111 --> 01:21:33,013
they'll be 10 votes short now...
if they get all five remaining.
1633
01:21:33,014 --> 01:21:34,747
The writing is
on the wall there.
1634
01:21:34,748 --> 01:21:36,915
And we're here
down on the floor.
1635
01:21:36,916 --> 01:21:39,400
Traders have been standing around.
We're all here in knots.
1636
01:21:43,691 --> 01:21:47,196
The networks are waiting for you
in the press room.
1637
01:21:47,197 --> 01:21:50,349
I can't even...
1638
01:22:02,114 --> 01:22:04,148
We have to
go back again.
1639
01:22:04,149 --> 01:22:06,768
They don't get
to say no on this.
1640
01:22:07,519 --> 01:22:09,187
Okay.
1641
01:22:09,188 --> 01:22:10,356
The White House
wants a meeting.
1642
01:22:10,357 --> 01:22:12,358
Good. We'll come up
with a new strategy.
1643
01:22:12,359 --> 01:22:14,427
The White House has to
push harder on the Hill.
1644
01:22:14,428 --> 01:22:17,296
Meanwhile we need to keep working
on what we do with the money.
1645
01:22:17,297 --> 01:22:18,798
Let's act like
this is gonna work.
1646
01:22:18,799 --> 01:22:20,632
In that case, let's talk
about cash injections.
1647
01:22:20,633 --> 01:22:21,869
Here we go again.
1648
01:22:21,870 --> 01:22:23,201
We can't nationalize
the banks.
1649
01:22:23,202 --> 01:22:24,298
It's not nationali...
1650
01:22:24,299 --> 01:22:25,869
That's how Japan got itself
a decade-long recession.
1651
01:22:25,870 --> 01:22:28,371
Is that where
we want to go?
1652
01:22:28,372 --> 01:22:30,573
What else do we have?
1653
01:22:30,574 --> 01:22:32,132
Cash-for-trash.
1654
01:22:32,133 --> 01:22:34,183
Buying toxic assets
is still our go-to move.
1655
01:22:34,811 --> 01:22:38,280
All right.
Find a way to simplify it.
1656
01:22:38,281 --> 01:22:41,184
Dan, work something up.
1657
01:22:41,185 --> 01:22:44,438
For discussion purposes,
let's see what it would look like.
1658
01:22:55,201 --> 01:22:58,003
For those who supported the
$700 billion Wall Street bailout,
1659
01:22:58,004 --> 01:23:00,239
it was a surprising
and stunning failure
1660
01:23:00,240 --> 01:23:02,574
when the House of Representatives
voted to reject it.
1661
01:23:02,575 --> 01:23:05,043
It's a stinging defeat
for President Bush
1662
01:23:05,044 --> 01:23:07,781
delivered at the hands
of his fellow Republicans.
1663
01:23:07,782 --> 01:23:11,251
We put forth a plan
that was big
1664
01:23:11,252 --> 01:23:13,019
because we've got
a big problem.
1665
01:23:13,020 --> 01:23:16,957
The reality is that we're
in an urgent situation.
1666
01:23:16,958 --> 01:23:20,227
and the consequences
will grow worse each day
1667
01:23:20,228 --> 01:23:21,695
if we do not act.
1668
01:23:21,696 --> 01:23:23,196
I know.
I keep telling...
1669
01:23:23,197 --> 01:23:24,698
draft of
the new bill.
1670
01:23:24,699 --> 01:23:26,333
Are they having
any luck with it?
1671
01:23:26,334 --> 01:23:28,903
The White House thinks they
got a better shot of pushing it
1672
01:23:28,904 --> 01:23:31,506
through the Senate side first.
Hopefully they're right.
1673
01:23:31,507 --> 01:23:33,474
They asked us to back off
and let them handle it.
1674
01:23:33,475 --> 01:23:36,529
So I'm... I'm...
I'm trying to back off.
1675
01:23:41,418 --> 01:23:44,287
Buying toxic assets
isn't gonna work.
1676
01:23:44,288 --> 01:23:45,888
Why not?
1677
01:23:45,889 --> 01:23:47,455
It's too slow.
1678
01:23:47,456 --> 01:23:48,923
I think I've been
saying that.
1679
01:23:48,924 --> 01:23:50,924
Well, we knew it was complicated,
but how slow...?
1680
01:23:50,925 --> 01:23:52,426
Two months,
maybe more.
1681
01:23:52,427 --> 01:23:53,834
Oh.
1682
01:23:53,835 --> 01:23:55,195
How is it possible
we didn't know how...?
1683
01:23:55,196 --> 01:23:59,465
I didn't ask how long
it would take, okay?
1684
01:23:59,466 --> 01:24:01,834
Can we move on?
1685
01:24:01,835 --> 01:24:05,638
So maybe we can talk about
capital injections.
1686
01:24:05,639 --> 01:24:07,540
Dan, we really can't.
1687
01:24:07,541 --> 01:24:09,709
I think
we're gonna have to.
1688
01:24:09,710 --> 01:24:12,245
Even if neel could
expedite the process,
1689
01:24:12,246 --> 01:24:15,815
which seems unlikely,
1690
01:24:15,816 --> 01:24:17,817
the system
is crumbling.
1691
01:24:17,818 --> 01:24:20,553
The banks need
money now.
1692
01:24:20,554 --> 01:24:24,090
If cash injections are the most
efficient way to stabilize them,
1693
01:24:24,091 --> 01:24:27,259
then we can't back off
1694
01:24:27,260 --> 01:24:29,261
because we're uncomfortable
being the men
1695
01:24:29,262 --> 01:24:31,597
who nationalized
a few American banks.
1696
01:24:31,598 --> 01:24:33,266
It's faster,
that's for sure.
1697
01:24:33,267 --> 01:24:35,368
It will push us back
off the precipice, yes,
1698
01:24:35,369 --> 01:24:38,972
unfreeze the system.
1699
01:24:38,973 --> 01:24:41,741
We give them some money
1700
01:24:41,742 --> 01:24:45,194
and they lend it out.
1701
01:24:48,916 --> 01:24:50,416
The motion is adopted.
1702
01:24:50,417 --> 01:24:52,785
After rejecting the Bush
Administration's T.A.R.P. Plan
1703
01:24:52,786 --> 01:24:55,422
only four days ago,
the House passed it today.
1704
01:24:55,423 --> 01:24:57,283
The big question now...
1705
01:24:57,284 --> 01:24:59,126
whether investors will take
comfort in the news.
1706
01:24:59,127 --> 01:25:01,128
Current indicators show
the stock market
1707
01:25:01,129 --> 01:25:04,315
is continuing
its freefall.
1708
01:25:22,519 --> 01:25:23,885
Hello.
1709
01:25:23,886 --> 01:25:26,221
Warren, it's Hank.
1710
01:25:26,222 --> 01:25:29,324
I... I... I'm sorry.
It's late.
1711
01:25:29,325 --> 01:25:31,661
Am I waking you?
1712
01:25:31,662 --> 01:25:34,130
No, not at all.
1713
01:25:34,131 --> 01:25:36,299
Can I pick your brain
for a minute?
1714
01:25:36,300 --> 01:25:39,101
Sure.
What's the problem?
1715
01:25:39,102 --> 01:25:42,272
How do you get
a healthy bank...
1716
01:25:42,773 --> 01:25:45,791
to accept
a capital injection?
1717
01:26:39,665 --> 01:26:42,167
I had to drag my ass
all the way here from California.
1718
01:26:42,168 --> 01:26:44,102
They wouldn't even
tell my why.
1719
01:26:44,103 --> 01:26:46,004
Nobody knows
what this is about?
1720
01:26:46,005 --> 01:26:48,256
Nope.
1721
01:26:53,279 --> 01:26:54,980
Talk to Jamie?
1722
01:26:54,981 --> 01:26:57,250
Yep. He'll be fine.
1723
01:26:57,251 --> 01:26:59,119
Did you tell him
what was coming?
1724
01:26:59,120 --> 01:27:01,255
Uh, did I tell him we're about
to make him swallow
1725
01:27:01,256 --> 01:27:04,625
a capital injection
he doesn't need? No.
1726
01:27:04,626 --> 01:27:07,328
I... I told him
we need his help
1727
01:27:07,329 --> 01:27:10,916
and I asked him very politely
not to fuck with us today.
1728
01:27:12,135 --> 01:27:13,619
He got it.
1729
01:27:14,771 --> 01:27:16,989
She's here.
1730
01:27:21,813 --> 01:27:23,814
Gentlemen.
1731
01:27:23,815 --> 01:27:25,584
We think this is
gonna work?
1732
01:27:25,585 --> 01:27:28,103
Oh yeah.
They're gonna love it.
1733
01:27:50,079 --> 01:27:52,047
We are of the view
1734
01:27:52,048 --> 01:27:54,050
that the United States
needs
1735
01:27:54,051 --> 01:27:56,752
to take strong,
decisive action
1736
01:27:56,753 --> 01:27:59,921
to arrest the stress
1737
01:27:59,922 --> 01:28:03,457
in our financial system.
1738
01:28:03,458 --> 01:28:06,526
Through our new
T.A.R.P. Authority,
1739
01:28:06,527 --> 01:28:09,495
Treasury will purchase
1740
01:28:09,496 --> 01:28:11,764
preferred stock
1741
01:28:11,765 --> 01:28:14,849
in each of the banks
represented in this room.
1742
01:28:17,035 --> 01:28:19,503
That stock will yield 5%
the first five years,
1743
01:28:19,504 --> 01:28:22,472
9% after that.
1744
01:28:22,473 --> 01:28:25,174
We give you money;
You lend it out.
1745
01:28:25,175 --> 01:28:28,610
It will unfreeze credit,
stabilize the banks,
1746
01:28:28,611 --> 01:28:30,512
restore confidence.
1747
01:28:30,513 --> 01:28:32,613
Everyone will be
better off
1748
01:28:32,614 --> 01:28:34,648
with more capital
in the system.
1749
01:28:34,649 --> 01:28:36,716
And that is why
1750
01:28:36,717 --> 01:28:40,586
all nine of you
1751
01:28:40,587 --> 01:28:43,605
will participate
in the program.
1752
01:28:46,926 --> 01:28:48,727
Some of us don't need
any capital.
1753
01:28:48,728 --> 01:28:51,231
You all need capital.
1754
01:28:51,232 --> 01:28:53,800
You have no idea what the
market's gonna look like in a year.
1755
01:28:53,801 --> 01:28:55,902
Neither do you.
1756
01:28:55,903 --> 01:28:57,903
I'm not one of you
New York guys
1757
01:28:57,904 --> 01:28:59,872
with your
fancy products.
1758
01:28:59,873 --> 01:29:02,775
Well, why am I in this room
talking about bailing you out?
1759
01:29:02,776 --> 01:29:06,378
The stronger banks will serve
as cover for the weaker banks.
1760
01:29:06,379 --> 01:29:09,014
If just some of you take it,
the money is a signal
1761
01:29:09,015 --> 01:29:12,117
that a bank is too weak to survive.
The market will devour it.
1762
01:29:12,118 --> 01:29:14,853
How much are we
talking about?
1763
01:29:14,854 --> 01:29:17,940
$125 billion.
1764
01:29:19,927 --> 01:29:21,928
Bank of America...
$15 billion.
1765
01:29:21,929 --> 01:29:24,264
Bank of New York Mellon...
$3 billion.
1766
01:29:24,265 --> 01:29:27,800
Citigroup...
$25 billion.
1767
01:29:27,801 --> 01:29:31,137
Goldman Sachs...
$10 billion.
1768
01:29:31,138 --> 01:29:34,474
J.P. Morgan...
$25 billion.
1769
01:29:34,475 --> 01:29:36,743
Merrill Lynch...
$10 billion.
1770
01:29:36,744 --> 01:29:39,278
Morgan Stanley...
$10 billion.
1771
01:29:39,279 --> 01:29:42,448
State Street...
$2 billion.
1772
01:29:42,449 --> 01:29:44,934
Wells Fargo...
$25 billion.
1773
01:29:50,658 --> 01:29:54,327
What happened
to buying toxic assets?
1774
01:29:54,328 --> 01:29:55,929
Wasn't that the idea?
1775
01:29:55,930 --> 01:29:57,464
It's too slow.
1776
01:29:57,465 --> 01:29:59,566
You'll be dead
before we sort it out.
1777
01:29:59,567 --> 01:30:03,002
So we're just handing
the reins over to you?
1778
01:30:03,003 --> 01:30:04,670
The deal's actually
pretty good.
1779
01:30:04,671 --> 01:30:07,340
You turn your nose up at this now,
and we have to rescue you later...
1780
01:30:07,341 --> 01:30:09,141
the terms won't be
nearly as attractive.
1781
01:30:09,142 --> 01:30:11,811
It's cheap capital.
It's not the worst idea in the world.
1782
01:30:11,812 --> 01:30:13,779
Well, it is for those of us
who already have capital.
1783
01:30:13,780 --> 01:30:15,916
We will be nonvoting
shareholders.
1784
01:30:15,917 --> 01:30:18,568
This will be
a temporary measure.
1785
01:30:20,855 --> 01:30:23,022
What if we decline
to be involved?
1786
01:30:23,023 --> 01:30:26,593
The Chairman of the FDIC
is sitting right there.
1787
01:30:26,594 --> 01:30:28,294
Tomorrow you'll
find out
1788
01:30:28,295 --> 01:30:30,697
that you're not as well-capitalized
as you think you are.
1789
01:30:30,698 --> 01:30:32,699
What kind of protections
can you offer on changes
1790
01:30:32,700 --> 01:30:34,333
for compensation policy?
1791
01:30:34,334 --> 01:30:37,203
I mean, if the government
is going to become a part-owner,
1792
01:30:37,204 --> 01:30:39,205
does that mean
that the government
1793
01:30:39,206 --> 01:30:41,774
is going to dictate
compensation?
1794
01:30:41,775 --> 01:30:44,011
Are you asking me about your
bonus right now, John?
1795
01:30:44,012 --> 01:30:46,380
I'm running
a company.
1796
01:30:46,381 --> 01:30:48,382
If the Fed tells me
I can't offer
1797
01:30:48,383 --> 01:30:50,684
competitive pay
for talent,
1798
01:30:50,685 --> 01:30:53,887
you're gonna launch the biggest brain
drain this country's ever seen.
1799
01:30:53,888 --> 01:30:55,755
Is that the way you want
to run the banks?
1800
01:30:55,756 --> 01:30:57,790
Until the money is repaid
to the Treasury,
1801
01:30:57,791 --> 01:31:01,259
there will be some limitations on tax
deductions and golden parachutes.
1802
01:31:01,260 --> 01:31:03,327
- Well, there you go.
- I don't really understand
1803
01:31:03,328 --> 01:31:05,962
why there needs to be
so much tension about this.
1804
01:31:05,963 --> 01:31:07,931
The country is facing
1805
01:31:07,932 --> 01:31:10,466
the worst economy
since the Great Depression.
1806
01:31:10,467 --> 01:31:12,969
If the financial system
collapses,
1807
01:31:12,970 --> 01:31:16,022
it will take
every one of you down.
1808
01:31:24,079 --> 01:31:26,430
Give me the papers.
1809
01:31:33,653 --> 01:31:35,320
- You can't just sign it.
- Oh no?
1810
01:31:35,321 --> 01:31:38,989
- Not without your board.
- My board's on 24-hour notice.
1811
01:31:38,990 --> 01:31:41,259
I think they'll
go along with it.
1812
01:31:41,260 --> 01:31:46,012
And if they don't,
they'll fire me.
1813
01:31:51,304 --> 01:31:54,222
Anyone else?
1814
01:31:59,147 --> 01:32:01,565
Are they gonna do it?
1815
01:32:02,684 --> 01:32:04,352
They're calling
their boards.
1816
01:32:04,353 --> 01:32:06,855
- That's a good sign.
- If they do go along with this,
1817
01:32:06,856 --> 01:32:09,558
we should announce
something alongside the injections...
1818
01:32:09,559 --> 01:32:12,629
maybe a program
to buy up mortgages.
1819
01:32:12,630 --> 01:32:14,365
I'm not rushing out
some half-assed plan
1820
01:32:14,366 --> 01:32:16,167
just to make it look like
we're doing something.
1821
01:32:16,168 --> 01:32:18,604
Maybe we just beef up
the restrictions
1822
01:32:18,605 --> 01:32:21,374
on how they
spend the money...
1823
01:32:21,375 --> 01:32:23,210
something to take
the stink off.
1824
01:32:23,211 --> 01:32:26,030
Put more restrictions on it...
they won't take it.
1825
01:32:30,486 --> 01:32:32,972
One thing too many
for today.
1826
01:32:34,993 --> 01:32:36,961
They almost bring down
1827
01:32:36,962 --> 01:32:38,797
the U.S. economy
as we know it,
1828
01:32:38,798 --> 01:32:41,299
but we can't put restrictions
on how they spend
1829
01:32:41,300 --> 01:32:44,536
the $125 billion
we're giving them,
1830
01:32:44,537 --> 01:32:48,890
because they might not
take it.
1831
01:33:20,273 --> 01:33:22,540
What's this?
1832
01:33:22,541 --> 01:33:26,377
That is, um...
1833
01:33:26,378 --> 01:33:28,913
A poison dart frog.
1834
01:33:28,914 --> 01:33:32,400
Wendy took it
in Guyana.
1835
01:33:44,664 --> 01:33:47,416
Is this yours?
1836
01:33:52,005 --> 01:33:54,489
Al Capone's.
1837
01:33:56,442 --> 01:33:57,976
Eight out of the nine
are in.
1838
01:33:57,977 --> 01:34:00,012
B of A is still waiting
on its board, but...
1839
01:34:00,013 --> 01:34:02,548
it's gonna go through.
1840
01:34:02,549 --> 01:34:05,184
I'll call the Speaker's
office.
1841
01:34:05,185 --> 01:34:08,221
And we're gonna get you
on the phone with the President.
1842
01:34:08,222 --> 01:34:11,174
Okay.
1843
01:34:13,961 --> 01:34:16,796
Dow is up 900 points
1844
01:34:16,797 --> 01:34:19,315
just because
we were meeting.
1845
01:34:21,468 --> 01:34:25,505
Well, that's good.
1846
01:34:25,506 --> 01:34:28,074
That's good.
1847
01:34:28,075 --> 01:34:30,809
It was the right thing.
1848
01:34:30,810 --> 01:34:33,747
Absolutely.
1849
01:34:33,748 --> 01:34:35,716
I was prepared
for more blowback.
1850
01:34:35,717 --> 01:34:38,819
They didn't have
a choice.
1851
01:34:38,820 --> 01:34:41,338
They knew that.
1852
01:34:42,657 --> 01:34:47,428
Well, I certainly hope
that they...
1853
01:34:47,429 --> 01:34:48,846
What?
1854
01:34:50,565 --> 01:34:54,802
I hope they use the money
the way we're asking them to.
1855
01:34:54,803 --> 01:34:59,890
They will... lend it out,
won't they?
1856
01:35:00,976 --> 01:35:03,828
Of course they will.
1857
01:35:15,457 --> 01:35:17,208
Of course they will.
142586
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