Actors: George Aloi (actor), Edward Asner (actor), Luis Ayala (actor), Beau Baxter (actor), Peter Benson (actor), Marc Bicking (actor), Casey Biggs (actor), JB Blanc (actor), Ken Bulcroft (actor), Josh Casaubon (actor), Derek Cecil (actor), Scott Churchson (actor), Bill Clinton (actor), Andrew J. Cornelius (actor), Ayad Akhtar (actor),
Plot: A close look behind the scenes, between late March and mid-October, 2008: we follow Richard Fuld's benighted attempt to save Lehman Brothers; conversations among Hank Paulson (the Secretary of the Treasury), Ben Bernanke (chair of the Federal Reserve), and Tim Geithner (president of the New York Fed) as they seek a private solution for Lehman's; and, back-channel negotiations among Paulson, Warren Buffet, investment bankers, a British regulator, and members of Congress as almost all work to save the U.S. economy. By the end, with the no-strings bailout arranged, modest confidence restored on Wall Street, and a meltdown averted, Paulson wonders if banks will lend.
Keywords: accountability, aide, aig, bailout, bank-fraud, bank-of-america, banker, bankruptcy, based-on-fact, bear-stearns
Henry Paulson: [TIREDLY] The Fed can lend to non banks under unusual and exigent circumstances, we're thinking of taking over 80% of the company.::Jim Wilkinson: [INSISTENTLY] Hank we can't! This morning we were lecturing the entire country on moral hazard.
::Henry Paulson: [INCREASINGLY ANGRILY] AIG has collateral, they have assets, Lehman didn't, we couldn't lend into a hole, its not the same story!::Jim Wilkinson: [PLEADINGLY] Nobody is going to care, its another bailout, with no legislation, the Hill is gonna go crazy, the country is gonna go crazy.
::Henry Paulson: [ANGRILY LECTURING] The plane we flew in on this morning leased from AIG, construction downtown AIG, life insurance 81 million policies with a face value of $1.9 trillion. Billions of dollars in teachers' pensions.
You want “too big to fail” here it is! You got a better idea -the suggestion box is wide open!Mack's Assistant: Tim Geithner's calling again.::John Mack: Cover your ears. You tell Tim Geithner to fucking blow me. I'm trying to save my company.
Michele Davis: They almost bring down the US economy as we know but we can't put restrictions on how they spend the $125 billion we're giving them because…
they might not take it! [the Assistant Secretary of the Treasury for Public Affairs upon hearing that the 9 bank CEOs may refuse to take free money from the federal government if they had to be held accountable for how they spent it]Richard Fuld: [on the phone with Neel Kashkari] Last February, we were at 66 a share. Lehman Brothers is *not* Bear Stearns.
We have a great business. Real estate will come back. I am not *fucking* giving this company away!Ben Bernanke: I spent my entire academic career studying the Great Depression. The depression may have started because of a stock market crash, but what hit the general economy was a disruption of credit. Average citizens unable to borrow money, to do anything.
To buy a home, start a business, stock their shelves. Credit has the ability to build a modern economy, but lack of credit has the ability to destroy it, swiftly and absolutely. If we do not act, boldly and immediately, we will replay the depression of the 1930s, only this time it will be far, far worse. We don't do this now, we won't have an economy on Monday.
Ben Bernanke: I don't really understand why there needs to be so much tension about this. The country is facing the worst economy since the Great Depression. If the financial system collapses, it will take every one of you down.
Michele Davis: I hate to do this right now, but I'm going to have to have a press call first thing, and I don't know what I'm going to tell them.::Jim Wilkinson: Okay, here's how you explain it. Wall Street started bundling home loans together – mortgage-backed securities – and selling slices of those bundles to investors, and they were making big money.
So they started pushing the lenders saying, come on, we need more loans.::Henry Paulson: The lenders had already given loans to borrowers with good credit, so they go bottom feeding, they lower their criteria.::Neel Kashkari: Before, you needed a credit score of 620 and a down payment of 20%; now they'll settle for 500, no money down.
::Jim Wilkinson: And the buyer, the regular guy on the street assumes that the experts know what they're doing. He's saying to himself, if the bank's willing to loan me money, I must be able to afford it. So he reaches for the American Dream, he buys that house.::Neel Kashkari: The banks knew securities shitbag mortgages were risky…
::Henry Paulson: – you'll work on 'shitbag'…::Neel Kashkari: – so to control their downside, the banks started buying a kind of insurance. If mortgages default, insurance company pays. Default swap. The banks insure their potential losses to move the risk off their books, so they can invest more, make more money.
::Henry Paulson: And while a lot of companies insured their stuff, one was dumb enough to take on an almost unbelievable amount of risk.::Michele Davis: AIG.::Jim Wilkinson: And you'll work on 'dumb.'::Michele Davis: And when they ask me why they did that?::Jim Wilkinson: Fees!::Neel Kashkari: Hundreds of millions in fees.
::Henry Paulson: AIG figures the housing market would just keep going up. But then the unexpected happens.::Jim Wilkinson: Housing prices go down.::Neel Kashkari: Poor bastard who bought his dream house? The teaser rate on his mortgage runs out, his payments go up, he defaults.::Henry Paulson: Mortgage-backed securities tank. AIG has to pay off the swaps. All of them.
All over the world. At the same time.::Neel Kashkari: AIG can't pay. AIG goes under. Every bank they insure books massive losses on the same day. And then they all go under. It all comes down.::Michele Davis: [horrified] The *whole* financial system? And what do I say when they ask me why it wasn't regulated?::Henry Paulson: No one wanted to.
We were making too much money.Richard Fuld: [on the housing crisis] You know, people act we're crack dealers. Nobody put a gun to anybody's head and said, “Hey, nimrod, buy a house you can't afford, and you know what? While you're at it, put a line of credit on that baby and buy yourself a boat.
“::Joe Gregory: [chuckles] You heard anything from Buffett?::Erin Callan: He's asking for preferred shares at 40, with a dividend of nine percent.::Richard Fuld: [annoyed] We were just at 66. What the fuck?::Joe Gregory: Maybe it's just an opening gambit, Dick.::Richard Fuld: Sounds more a goddamn insult!::Erin Callan: Dick, we're at 36 right now.
We haven't been anywhere near 66 in months. The markets Buffett. His name will push the price up overnight.::Richard Fuld: You know, I don't care who he is. I am not spending $360 million a year for the pleasure of doing business with him. Real estate will come back.::Joe Gregory: Koreans have been sniffing around.::Richard Fuld: There you go. And they won't steal us blind. I've seen this before: CEOs panic and they sell out cheap. Right now, the Street's running around with its hair on fire, but the storm always passes. We stand strong, and on the other side, we'll eat Goldman's lunch.::Erin Callan: So what do we do about Buffett?::Richard Fuld: Screw Warren Buffett.Ben Bernanke: [Having breakfast with Henry Paulson] Lehman's down another 10%.::Henry Paulson: You are not gonna let me get down a single bite, are you?::Ben Bernanke: This is why I have oatmeal.
Chris Flowers: Make sure Fuld's not keeping any bad news the mix.::Rodgin Cohen: It's “open kimono”, to quote Dick.::Chris Flowers: There's a revolting image.
Actors: James Bolam (actor), Michael Brandon (actor), James Cromwell (actor), Josh Dallas (actor), Ben Daniels (actor), Richard Durden (actor), Henry Goodman (actor), William Hope (actor), Alex Jennings (actor), Corey Johnson (actor), Michael Landes (actor), Peter Polycarpou (actor), Laura Brook (actress), Katrena Rochell (actress), David Annen (actor),
Plot: The heads of Wall Street's biggest investment banks were summoned to an evening meeting by the US Treasury Secretary, Hank Paulson, to discuss the plight of another – Lehman Brothers. After six months' turmoil in the world's financial markets, Lehman Brothers was on life support and the government was about to pull the plug.
Lehman CEO, Dick Fuld, recently sidelined in a boardroom coup, spends the weekend desperately trying to resuscitate his beloved company through a merger with Bank of America or UK-based Barclays.
But without the financial support of Paulson and Lehman's fiercest competitors, Fuld's empire – and with it, the stability of the world economy – teeters on the verge of extinction.
Keywords: ceo, financial-crisis, investment-bank, secretary-of-the-treasury
Jamie Dimon may be open to relocating chunks of JPMorgan Chase from NYC
When Jamie Dimon took over as CEO of JPMorgan Chase 15 years ago, he noticed something strange: Occupying the bank’s most expensive real estate, with prime Park Avenue views, was a floor full of computer servers.
Dimon, according to JPMorgan insiders, asked why couldn’t those same servers be located in, say, Columbus, Ohio, where the real estate costs are much lower?
I can’t tell you where JPMorgan eventually put those servers other than to say they aren’t located in the Big Apple anymore. And the same will soon be said of many other banks and financial businesses now seeking to move the once-friendly confines of New York City, which isn’t so friendly anymore.
The trend has been a slow burn over the past two decades, but now it has kicked into high gear thanks to COVID, spiraling costs and a feckless political class that runs this city and state.
As reported last week, Goldman Sachs, known for its Democratic-leaning and virtue-signaling leadership, is now looking to move a chunk of its workforce to some of the reddest states in the nation, including Texas and Florida. Brokers at several big firms tell me they are wise heading south.
“Charlie, get down here fast,” one (former) NYC financial adviser who just moved to Florida told me. “I can walk down the street without worrying about getting mugged, and I had dinner at a restaurant.”
It used to be said that New York City’s talent pool was second to none. Now the banks are finding that smart people are in Texas, too, and a lot of their top producers have no problem relocating to an up-and-coming city Nashville, Tenn., where the quality of life isn’t so bad, particularly compared to the now crime-ridden streets of Manhattan.
Dimon, I am told, vetoed a plan several years back to move a swath of the bank to south Florida because he didn’t think the schools were good enough. Now he appears to have changed his mind and is considering plenty of relocations outside New York City.
With a vaccine on the way, many big businesses are plotting a fuller return to their NYC headquarters in the New Year. But don’t expect the banks’ NYC footprint to ever match what it was. Banks are talking staggered workweeks with some personnel going to the office just two or three days a week, and office space is shared.
The out-of-state migration to cut costs will continue even with a vaccine, because it’s simply too expensive to be in Manhattan, and the banks have lost faith in the ruling political class to protect their employees and provide their kids with a quality education.
That means tax revenues will plummet and budgets in the city and surrounding areas will get worse, not to mention the massively underfunded pension plans for municipal workers.
New York City, of course, has seen some dark times with its brush with bankruptcy in the 1970s and high crime through the 1980s, and we survived. But then again, we had a Rudy Giuliani waiting in the wings to run things, which is why big business stayed.
Power players’ outsider mayoral picks
Speaking of the next mayor, for NYC’s big businesses — think Wall Street and real estate — the reign of comrade Bill de Blasio can’t end fast enough. They see his inability to control crime, the bungling response to COVID and his mishandling of school reopenings as secular trends that won’t be reversed by the status-quo pols running to replace him next year.
That’s why they’re banking on a trio of outsiders to save the city: Former Citigroup banker Ray McGuire; Shaun Donovan, a housing official during the Bloomberg years and in the Obama administration; and to a lesser extent former Dem presidential contender Andrew Yang.
Top executives, I am told, will do what they can to raise money to get them elected. Both McGuire and Donovan have been in touch with their contacts at these firms in recent weeks to consult on strategy and fundraising.
As Fox Business’s Lydia Moynihan has reported, Yang is now telling people he’s moving toward assembling a campaign staff and has turned down a role in the Biden administration because he is highly ly to run.
Bankers tell me they are aware all three are long shots. Recall how outsiders Rudy Giuliani and Mike Bloomberg spent years laying the groundwork before officially entering the race through savvy PR and, in Bloomberg’s case, spreading around a ton of cash to interest groups.
Neither McGuire, Donovan nor Yang has done anything on the scale of Rudy or Mayor Mike. Meanwhile, they will be up against seasoned Democratic pols in City Comptroller Scott Stringer and Brooklyn Borough President Eric Adams with strong ties to the powerful city municipal unions.
As The Post reported, a recent poll showed that Yang matched up well against both Stringer and Adams, but it’s still early so polling can’t really be trusted. McGuire and Donovan barely registered in the poll, which gives you an idea of their low name recognition.
In other words, the chances of a competent, business-savvy (albeit progressive) mayor running the city following the 2021 election appear slim.
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