Too Big to Fail Page #10

I'm sorry. It's late.

Am I waking you?

No, not at all.

Can I pick your brain for a minute?

Sure. What's the problem?

How do you get a healthy bank

to accept a capital injection?

I had to drag my ass

all the way here from California.

They wouldn't even tell me why.

Nobody knows what this is about?

Nope.

Talk to Jamie?

Yep. He'll be fine.

Did you tell him what was coming?

Did I tell him we're about to make him swallow

a capital injection he doesn't need? No.

I told him we need his help

and I asked him very politely

not to f*** with us today.

He got it.

She's here.

Gentlemen. We think this is gonna work?

Yeah. They're gonna love it.

We are of the view

that the United States needs

to take strong, decisive action

to arrest the stress

in our financial system.

Through our new TARP authority,

Treasury will purchase preferred stock

in each of the banks

represented in this room.

That stock will yield

5% the first five years,

9% after that.

We give you money. You lend it out.

It will unfreeze credit, stabilize

the banks, restore confidence.

Everyone will be better off

with more capital in the system.

And that is why all nine of you

will participate in the program.

Some of us don't need any capital.

You all need capital.

You have no idea what the market's

gonna look like in a year.

Neither do you.

I'm not one of you New York guys

with your fancy products.

Why am I in this room

talking about bailing you out?

The stronger banks will serve

as cover for the weaker banks.

If just some of you take it,

the money's a signal

that a bank is too weak to survive.

The market will devour it.

How much are we talking about?

A hundred and twenty-five billion.

Bank of America, 15 billion.

Bank of New York Mellon, three billion.

Citigroup, 25 billion.

Goldman Sachs, 10 billion.

JPMorgan, 25 billion.

Merrill Lynch, 10 billion.

Morgan Stanley, 10 billion.

State Street, two billion.

Wells Fargo, 25 billion.

What happened to buying toxic assets?

- Wasn't that the idea?

- It's too slow.

It'll be dead before we sort it out.

So, we're just handing

the reins over to you?

The deal's actually pretty good.

You turn your nose up at this now

and we have to rescue you later,

the terms won't be nearly as attractive.

It's cheap capital.

It's not the worst idea in the world.

It is for those of us

who already have capital.

We will be non-voting shareholders.

This will be a temporary measure.

What if we decline to be involved?

The Chairman of the FDIC

is sitting right there.

Tomorrow you'll find out

that you're not as well capitalized

as you think you are.

What kind of protections

can you offer on changes

for compensation policy?

If the government

is going to become a part-owner,

does that mean that the government

is going to dictate compensation?

Are you asking me about your bonus

right now, John?

I'm running a company.

If the Fed tells me I can't offer

competitive pay for talent,

you're gonna launch the biggest brain

drain this country's ever seen.

Is that the way you wanna run the banks?

Until the money is repaid to the Treasury,

there will be some limitations on tax

deductions and golden parachutes.

- There you go.

- 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.

Give me the papers.

- You can't just sign it.

- Oh, no?

- Not without your board.

- My board's on 24-hour notice.

I think they'll go along with it.

And if they don't, they'll fire me.

Anyone else?

Are they gonna do it?

They're calling their boards.

- That's a good sign.

- If they do go along with this,

we should announce

something alongside the injections,

maybe a program to buy up mortgages.

I'm not rushing out some half-assed plan

just to make it look like

we're doing something.

Maybe we just beef up the restrictions

on how they spend the money,

something to take the stink off.

Put more restrictions on

it, they won't take it.

One thing too many for today.

They almost bring down

the US economy as we know it,

but we can't put restrictions

on how they spend

the $125 billion we're giving them

because they might not take it.

What's this?

That is

a poison dart frog.

Wendy took it in Guyana.

Is this yours?

Al Capone's.

Eight out of nine are in.

- B of A is still waiting on its board, but...

- It's gonna go through.

I'll call the Speaker's office.

And we're gonna get you

on the phone with the President.

Okay.

Dow is up 900 points

just because we were meeting.

That's good.

That's good.

It was the right thing.

Absolutely.

I was prepared for more blowback.

They didn't have a choice. They knew that.

I certainly hope that they...

What?

I hope they use the money

the way we're asking them to.

They will lend it out, won't they?

Of course they will.

Of course they will.

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