In conjunction with the release of his book, Too Big To Fail, Andrew Ross Sorkin has released the call logs that he obtained for the month of September 2008 of the then-Treasury Secretary Hank Paulson, here. September 2008, you will recall was at the height of the crisis, when Lehman Brothers went down, and the money market mutual fund, Prime Reserve, broke a buck.
There are 90 pages and I am continuing to work through the document. My initial review, through September 17, leaves a couple of impressions. Paulson generally talked to a very tight group of people. In addition, to those you would expect, Bernanke, President Bush, Geithner and various congressional leaders and his cronies like Goldman's Blankfein and Blackrock's Larry Fink, there are very few outliers.
Some in Paulson's tight circle, however, surprised me, the number of times he talked to Warren Buffett (Remember Buffett made a multi-billion dollar investment in Goldman Sachs in September. Don't you wish you could talk to the former Goldman CEO, now Treasury Secretary, before making your investment decisions?), the number of times he talked to Larry Summers, and the number of times he talked to then Congressman Rahm Emanuel. Remember the election wasn't held yet, so I find the large number of Larry Summers calls, interesting. Summers is, of course, now President Obama's top economic advisor.
The major outlier call , that didn't fit any pattern of Paulson calls, was a call to Paulson from former NYC mayor Rudy Giuliani on Sept. 15. He also fielded one call from Sarah Palin, and Hillary Clinton calls.
Maybe Rudy was calling to give Hank an update on Jeb Bush and cousin George Herbert Walker, given their Lehman scare?
ReplyDelete"Lehman Brothers files for Chapter 11 bankruptcy protection that evening, declaring itself insolvent. Trading for over 158 years, the investment bank would ultimately become the biggest failure as a result of the credit crisis, and remains the largest US corporate failure in history. The company failed with $639 billion in assets, but far more in debt and liabilities.
"Several sections of Lehman however, remained out of the chapter 11 filing, including Neuberger Berman and other investment units."
Neuberger Berman-George Herbert Walker
Lehman Private Equity-Jeb Bush
It would've looked bad for President George W. Bush to save his near relations with the election so close in early September.
I feel like the calls between Paulson and Buffett were probably Paulson begging Buffett to invest very publicly and heavily in something, namely GS. Paulson was probably hoping that Buffett investing in GS would calm the markets some.
ReplyDeleteBuffett is not an outlier. Not with such an acquaintance (rightmost): http://www.theallseeingeye.tv/buffett_schwarzenegger_rothschild.jpg
ReplyDeleteSuch a photo tells volumes.