Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System--and Themselves

Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System--and Themselves

Andrew Ross Sorkin

Language: English

Pages: 640

ISBN: 0143118242

Format: PDF / Kindle (mobi) / ePub

A brilliantly reported true-life thriller that goes behind the scenes of the financial crisis on Wall Street and in Washington.

In one of the most gripping financial narratives in decades, Andrew Ross Sorkin-a New York Times columnist and one of the country's most respected financial reporters-delivers the first definitive blow- by-blow account of the epochal economic crisis that brought the world to the brink. Through unprecedented access to the players involved, he re-creates all the drama and turmoil of these turbulent days, revealing never-before-disclosed details and recounting how, motivated as often by ego and greed as by fear and self-preservation, the most powerful men and women in finance and politics decided the fate of the world's economy.

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J. Braunstein, head, investment banking Michael J. Cavanagh, chief financial officer Stephen M. Cutler, general counsel Jamie Dimon, chairman and chief executive officer Mark Feldman, managing director John Hogan, chief risk officer James B. Lee Jr., vice chairman Timothy Main, head, financial institutions, investment banking William T. Winters, co-head, Investment Bank Barry L. Zubrow, chief risk officer Korea Development Bank Min Euoo Sung, chief executive officer Lazard Frères Gary

thirty-four-year-old colleague, even though he was eight years older. Paulson had invited his young advisers to a meeting with Ben Bernanke so that they could present a confidential memo that the two of them had authored—a memo that had far-reaching implications for the nation’s increasingly unsteady financial system. At Paulson’s request, they had done nothing less than to formulate a plan for what to do in the event of a total financial meltdown, outlin­ 84 | Andrew Ross Sorkin ing the

bets on corporate real estate, the constant reshuffling of executives into jobs they were ill equipped to handle—was Joe Gregory, the firm’s president and Fuld’s closest associate. McGee and Gregory had never gotten along very well to begin with; each was too headstrong for the other. And in recent months, Gregory had been discuss­ ing ways to push McGee aside, by assigning him to a new commodity trading business back in Houston, the prospect of which left McGee luke­ warm. The Sunday before

business. By the end of 2006, however, the market for subprime mortgages was per­ ceptibly unraveling—prices were falling, and delinquencies were rising. Even after it should have recognized an obvious danger signal when it was no longer able to hedge its bets with insurance from AIG, Merrill churned out nearly $44 billion worth of CDOs that year, three times the total of the previous year. If they were worried, however, Merrill’s top executives didn’t show it, for they had powerful incentive to

was still trading at $30 a share. Was this really happening? Back in India, a little over twenty-four hours ago, he had mar­ veled at the glorious extent of Wall Street’s global reach, its colonization of financial markets all over the world. Was all this coming undone? As the car made its way into the city, he rolled his thumb over the trackball on his BlackBerry as if it were a string of worry beads. The U.S. markets wouldn’t open for another four and a half hours, but he could already tell it

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