Skip to comments.Two Days That Upended Wall Street
Posted on 02/01/2010 6:27:33 PM PST by GOP_Lady
Former Treasury Secretary Paulson's New Book Details Tense Hours Leading Up to Lehman Brothers' Bankruptcy
The following account of the tense 48 hours preceding the bankruptcy of Lehman Brothers is excerpted from former Treasury Secretary Hank Paulson's new book, "On the Brink."
Early Saturday morning, I left the Waldorf-Astoria Hotel in Midtown Manhattan, climbed into a car, and sped down a deserted Park Avenue, arriving at the New York Fed just after 7 a.m.
We rode the elevator up to the 13th floor, where Tim Geithner had arranged for me to work in an office just down the hall from his own suite. I called (Bank of America CEO) Ken Lewis, who reported that after closer inspection his people now believed that Lehman's assets were in even worse shape than they had thought the previous evening. It was increasingly obvious that he didn't really want to buy Lehman.
I joined Tim in his office for a conference call with Barclays at about 8 a.m. Bank Chairman Marcus Agius and CEO John Varley were on the line from London, and (President) Bob Diamond was at Barclay's midtown Manhattan offices. Varley said they were working hard on a possible deal, but had serious concerns about some of Lehman's assets, and indicated Barclays would need to leave $52 billion of them behind.
I told Varley to focus on the biggest problems firstthe assets he thought were going to be the most troubledand tell us what he needed to take care of them. If Barclays gave us its best offer that day, we believed we could deliver a private-sector consortium that would fund whatever shortfall there was. Even as we spoke, the leaders of virtually the entire banking industry were assembling downstairs at the Fed.
(Excerpt) Read more at online.wsj.com ...
To be added or removed from the
"The Wall Street Journal" Ping List,
If this doesn’t prove to you that TARP was needed, then I cannot help you.
Paulson is one of the men who conned America to the brink and ushered in B. Hussein Obama and full-blown Marxism. There will be a special place in hell for him and his co-conspirators.
I don’t think so.
The man did his job to the best of ability and did it well.
The collapse of the economy is no laughing matter.
Does he say who started the bank run by withdrawing 5.5B in a few hours?
Probably Russia or China.
But the corrupt aholes who did it did such a great job. Get real!
And I maintain that we'd be in better shape today as a result.
Paulson I heart obama
Hank Paulson feared there would be a run on the dollar during the early phase of the financial crisis when global concerns were focused on the US. When the crisis escalated and went global with the failure of Lehman Brothers in September 2008, the dollar rallied but Mr Paulson had to grapple with a firestorm of financial failures.
He feared Goldman Sachs and Morgan Stanley would go down along with Washington Mutual and Wachovia.
The timing could not have been worse since we were months or weeks from the election so you had the collision of markets and politics.
Although a Republican, Mr Paulson found it harder to deal with John McCain than Barack Obama raising the interesting (and unanswered) question of which candidate Mr Paulson voted for.
And the same names that caused this are trying to fix the problem?
Hank Paulson is a moron.
Russians Refute Paulson Claim That They Wanted China To Help Force US Bailout of Fannie & Freddie
So who is in a big rush to run out an buy “Daddy Yourbucks’ book?
I’ll see what Costco wants for it...
In August 2007, Secretary Paulson explained that U.S. subprime mortgage fallout remained largely contained due to the strongest global economy in decades.
On July 20, 2008, after the failure of Indymac Bank, Paulson reassured the public by saying, it’s a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.
On August 10, 2008, Secretary Paulson told NBCs Meet the Press that he had no plans to inject any capital into Fannie Mae or Freddie Mac. On September 7, 2008, both Fannie Mae and Freddie Mac went into conservatorship.
Active monetary policy since then has repaired between a third and half the damage, but it took 18 months.
No party or ideology that thinks about finance or economics what you think about them, will ever have responsible power in this country, and doesn't deserve any.
Who did it? Try George Soros and his cronies. The straw that broke the banks: short selling Lehman stock.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.