Too Big to Fail Page #6

Let me...

I'm sorry, let me see if I understand this.

Are you directing us

to put Lehman into bankruptcy?

Give us a moment.

- He's muted.

- What the hell was that?

Tell them to file.

Everything said in that meeting

is or will be public record.

I can't tell a private company

to file for bankruptcy.

I don't have that power. Do I?

Do it.

The decision to file for bankruptcy

protection is one the board needs to make.

It is not the government's decision.

But we do believe

that the situation should be resolved.

So you're not directing us to file?

I'm not saying anything more

than I've just said. Thank you.

Take the vote.

- Mr. Akers?

- Yes.

Sir Christopher?

Yes.

Admiral Evans?

I'm sorry, but yes.

Chairman Fuld?

Dick?

Yes.

- Mr. Hernandez?

- Yes.

- Mr. Ainslie?

- Yes.

- Mr. Berlind?

- Yes.

- Mr. Cruikshank?

- Yes.

- Dr. Kaufman?

- Yes.

- Mr. Macomber?

- Yes.

P?

- Lehman's gone.

- Honey.

I should have known the British

were gonna be a problem.

I spoke to them two days ago.

I should have read between the lines.

You can't take all this on.

There's a lot of other people involved.

It's on me. I'm Treasury secretary

and the fourth-largest investment bank

in the country

failed on my watch.

I mean...

I don't know what's gonna happen.

Miss you, too.

Yo, taxi!

Jim, I'm in Midtown.

The ticker is...

What the hell am I looking at?

Hank, it's good.

"It is oddly reassuring

"that the Treasury Department

and the Federal Reserve

"let Lehman Brothers fail."

Okay, here it is. Here it is.

"Government intervention

would have been seen

"as a sign of extreme peril

in the global financial system

"or extreme weakness

on the part of federal regulators."

The New York f***ing Times.

Yeah, and it's not just

them. It's everybody.

Thank you, Senator. I appreciate it.

Congress is liking it.

I'm not sure they should be

so happy about this,

but they like that we let Lehman go.

You stood strong. You've got brass balls.

It's what people need at a time like this.

What is the market doing?

Europe's only down a little.

Dow Jones futures only off 3%.

So you need to build on this

at the press conference.

The story is we did everything

we could for Lehman.

- We did.

- And the takeaway is...

No more bailouts.

Mr. Secretary.

How should we read

what happened with Lehman?

Read it as I think it's important

to maintain the stability

and orderliness of our financial system,

and the

moral hazard is something

I don't take lightly.

- Mr. Paulson.

- Mr. Secretary, sir.

How do you see the health

of the banking system today?

The way the markets are performing today,

it's a testament to how the financial

industry has come together

in an extraordinary set of circumstances.

The American people can remain confident

in the soundness and the resilience

of the financial system. Thank you all.

- Mr. Secretary.

- Mr. Paulson.

What?

Dow is falling off a cliff.

Four hundred points already.

And the credit markets are frozen.

Goldman and Morgan Stanley

are getting slammed by withdrawals.

The Lehman thing's killing them.

I should talk to the President

about how we'll contain the damage.

Before you speak to the President,

we've got another problem.

AIG.

Mr. Geithner is working with AIG

on a private-sector solution

and the Secretary is monitoring

their progress very carefully.

He's in close contact

with the Congressional leadership, most...

White House wants a briefing on AIG.

You're more informed about that than we are.

We've got the same information you do.

No, we don't believe

that Lehman's bankruptcy

is taking down all of Wall Street.

Okay, but how do you explain...

The AIG situation may have been,

you know, exacerbated by the...

And Barney Frank's office.

- Yeah.

- A surprise?

No, AIG has been struggling...

Why didn't you guys head off

this situation six months ago?

Because the requisite magic wand

wasn't available, Doug.

But if we do find one,

you will be among the very first to know.

Blankfein on four, urgent.

I have to go.

Hey, Lloyd.

The goddamn British

bankruptcy administrator

froze all of Lehman's customer accounts.

You didn't square this

with the British before you did it?

Geithner on five.

People are freaking out.

They can't get their money.

Not investors, clients.

If customers think their money

wasn't safe with Lehman,

they're not gonna trust us either.

No one will do business with us.

You're gonna have to hang on.

Tim.

Dan spoke to Moody's.

They're downgrading AIG tonight.

Would have happened anyway, but Lehman

put the whole thing into hyperdrive.

How far down are they?

French Finance Minister on six.

They don't know.

We're working on it.

Christine.

How could you let this happen with Lehman?

What on earth were you thinking?

We did everything we could, Christine.

You allowed it to fail, Hank.

It was a horrifying mistake.

It is having catastrophic

consequences all over Europe.

And AIG would be even worse.

The European banks

have tremendous exposure to AIG.

We need assurance you will not

fail to act, as you did with Lehman.

It is not just an American problem.

Thank you so much for...

John Mack.

- John.

- John, one.

The fallout from Lehman is killing us.

The short-sellers are all over us.

We're down 10% already.

You guys have no idea

what's going on out here.

How are your earnings?

Strong. We're gonna announce Friday.

Announce now.

Okay, Lloyd, sorry.

Hank, if depositors see

they can't get their assets out of Lehman,

the next step is gonna be a massive pullout

from all the investment banks.

Jeff Immelt from GE.

Jesus, what's Immelt calling you for?

I have to go. Jeff.

You gotta know what's going on out here.

We're having trouble funding

our day-to-day operations.

Our finance division is infecting

the rest of our business.

General Electric?

This thing is spreading

way past Wall Street.

I get that nobody wants to touch mortgages,

but we're making planes

and engines, light bulbs.

We're a healthy company.

If we can't finance our

day-to-day operations,

every business in America's

gonna be shutting down.

- Where's AIG?

- It closed at $2.

Tim thinks we need to do something big.

Ben agrees, and so do I.

What can we do? AIG's not even a bank.

The Fed can lend to non-banks

under unusual and exigent circumstances.

We're thinking of taking over

80% of the company.

Hank, we can't.

This morning we were lecturing

the entire country on moral hazard.

AIG has collateral. They have assets.

Lehman didn't. We couldn't lend into a hole.

It's not the same story.

Nobody's gonna care.

It's another bailout with no legislation.

The Hill's gonna go crazy.

The country's gonna go crazy.

The plane that 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,

it's everywhere.

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