0 00:00:11,000 --> 00:00:10,000 1 00:00:09,080 --> 00:00:18,480 This programme contains strong language. 2 00:00:18,480 --> 00:00:23,160 'If you talk to 100 people, 102 are going to tell you they hate bankers, 3 00:00:23,160 --> 00:00:25,800 'but most people won't be able to tell you why. 4 00:00:27,320 --> 00:00:29,280 'Is it because we're privileged? 5 00:00:29,280 --> 00:00:31,360 'It can't be. 6 00:00:31,360 --> 00:00:34,080 'Some of us did dirty jobs to get through college. 7 00:00:34,080 --> 00:00:36,800 'I know one woman who paid her way through Princeton 8 00:00:36,800 --> 00:00:39,600 'working as a call girl for the Mafia. 9 00:00:39,600 --> 00:00:42,120 'Is it because we make a lot of money? 10 00:00:42,120 --> 00:00:45,000 - 'Well, some of us do...' - CASH REGISTER RINGS 11 00:00:45,000 --> 00:00:47,080 '..and some of us don't. 12 00:00:47,080 --> 00:00:51,320 'In general, people resent those they perceive to be on top. 13 00:00:51,320 --> 00:00:53,840 'That's how the French Revolution happened. 14 00:00:55,520 --> 00:00:59,800 'And in the end, perception can matter more than the truth. 15 00:00:59,800 --> 00:01:01,200 'You could have been born, 16 00:01:01,200 --> 00:01:04,240 'like I was, on the wrong side of the tracks in Tennessee.' 17 00:01:04,240 --> 00:01:08,440 Actually, when you're from Tennessee, it's all the wrong side of the tracks. 18 00:01:08,440 --> 00:01:11,840 'But once you get to Wall Street, no matter how you got here, 19 00:01:11,840 --> 00:01:15,040 'you give up your right to say you're a man of the people. 20 00:01:15,040 --> 00:01:17,240 'Here, we're all the same. 21 00:01:17,240 --> 00:01:20,200 'And we all went down together.' 22 00:01:24,840 --> 00:01:27,400 'Dick Fuld had given his life to Lehman Brothers 23 00:01:27,400 --> 00:01:30,920 'and was well known on Wall Street for his unique personal style.' 24 00:01:30,920 --> 00:01:32,640 His nickname is "The Gorilla". 25 00:01:32,640 --> 00:01:35,240 I can't give you more collateral! 26 00:01:35,240 --> 00:01:38,440 Not until we've had a chance to raise a bit more cap... 27 00:01:38,440 --> 00:01:41,720 We're under-capitalised, yes, like everybody and their... 28 00:01:41,720 --> 00:01:43,320 Jamie... Jamie. 29 00:01:43,320 --> 00:01:44,960 Jamie! I need you up here today. 30 00:01:44,960 --> 00:01:47,400 Jamie... What do you want me to do? 31 00:01:47,400 --> 00:01:51,680 You want me to wire you, now, five bil... No, you're unreasonable! PHONE RINGS 32 00:01:51,680 --> 00:01:56,040 I've had Paulson up my ass all week, our stock's dropped 75% since Monday. 33 00:01:56,040 --> 00:01:58,720 We're in freefall! Everyone's dumping our stock! 34 00:01:58,720 --> 00:02:01,760 And you ask me for more... Wait. Why is this phone ringing? 35 00:02:01,760 --> 00:02:04,720 - You want me to... - Hello? Hi. ..No. Get on the desk. 36 00:02:04,720 --> 00:02:06,840 Hold on. Jamie, I'll call you back. 37 00:02:06,840 --> 00:02:09,720 Yes, I know, I know, I know... 38 00:02:09,720 --> 00:02:12,480 Christ. You have no idea what... 39 00:02:12,480 --> 00:02:15,000 Yeah, I... These ribs are cold. 40 00:02:15,000 --> 00:02:17,320 Go ahead. 41 00:02:17,320 --> 00:02:20,400 Yeah, give me the list. OK, yeah. 42 00:02:20,400 --> 00:02:23,920 - These ribs are cold. - Some week. 43 00:02:23,920 --> 00:02:25,600 Three times the usual ribs. 44 00:02:25,600 --> 00:02:28,880 'It's true, Lehman had been to dark places before, 45 00:02:28,880 --> 00:02:31,800 'and Dick Fuld had always pulled us back from the brink. 46 00:02:31,800 --> 00:02:36,160 'When he broke the disastrous news to shareholders over a speakerphone, 47 00:02:36,160 --> 00:02:39,720 'he hoped the world would believe this was another one of those times.' 48 00:02:39,720 --> 00:02:44,960 We have regretfully had to write down our commercial real estate assets 49 00:02:44,960 --> 00:02:49,040 from 40 billion to a market value of 33 billion. 50 00:02:51,120 --> 00:02:52,240 The good news is, 51 00:02:52,240 --> 00:02:56,480 we have a strategy in place which we feel will appease the markets. 52 00:02:56,480 --> 00:02:58,880 We're currently fine-tuning a plan 53 00:02:58,880 --> 00:03:02,160 to spin off our commercial real estate portfolio 54 00:03:02,160 --> 00:03:05,840 into another company which, appropriately, will be called SpinCo. 55 00:03:06,800 --> 00:03:10,000 There, it won't be a drag on the balance sheet. 56 00:03:10,000 --> 00:03:12,000 'The market wasn't appeased.' 57 00:03:16,440 --> 00:03:19,640 'There was a run on the bank. Everyone was dumping shares. 58 00:03:19,640 --> 00:03:22,640 'Our rating was even downgraded. 59 00:03:22,640 --> 00:03:25,680 'By Friday afternoon we were gasping for breath.' 60 00:03:36,120 --> 00:03:39,720 I want everyone on message about this. 61 00:03:42,160 --> 00:03:44,920 Our situation is serious, 62 00:03:44,920 --> 00:03:50,640 but it's not critical. I repeat, the situation is not critical. 63 00:03:50,640 --> 00:03:52,760 Bank of America wants us. 64 00:03:52,760 --> 00:03:56,040 Barclays wants us. We can choose. 65 00:03:56,040 --> 00:04:00,320 And whichever we choose will fill us with new air! 66 00:04:00,320 --> 00:04:04,560 I need everyone to believe! 67 00:04:04,560 --> 00:04:08,240 You're on the 31st floor, goddammit! 68 00:04:08,240 --> 00:04:10,680 And I want this message to trickle downwards. 69 00:04:12,200 --> 00:04:13,920 Can Mr McDade have a minute? 70 00:04:22,800 --> 00:04:24,880 This better be good news, Bart. 71 00:04:26,760 --> 00:04:29,360 Hank Paulson's flying up here. 72 00:04:29,360 --> 00:04:31,280 Here?! 73 00:04:31,280 --> 00:04:34,440 Federal Reserve. He's calling a meeting with the banking chiefs. 74 00:04:34,440 --> 00:04:36,080 What for? 75 00:04:36,080 --> 00:04:37,920 He wants them to bail us out. 76 00:04:37,920 --> 00:04:42,080 - He wants our competitors to bail us out? - He wants us to go to the Fed. 77 00:04:42,080 --> 00:04:45,400 He doesn't want us in the meeting, he just wants us to be there. 78 00:04:45,400 --> 00:04:48,880 Waiting. Somewhere. I don't know. 79 00:04:48,880 --> 00:04:51,680 Is he kidding? I'm not going to the Fed to sit outside 80 00:04:51,680 --> 00:04:55,240 some goddamn boardroom while Paulson and my enemies decide my fate! 81 00:04:55,240 --> 00:04:57,320 Look, Dick, 82 00:04:57,320 --> 00:04:59,200 he doesn't want you there. 83 00:05:01,600 --> 00:05:03,360 He just wants us. 84 00:05:06,800 --> 00:05:09,560 HUSHED CONVERSATION 85 00:05:16,000 --> 00:05:18,080 Thank you all for coming. 86 00:05:18,080 --> 00:05:22,960 I know it must seem a rather cruel joke for you to get a call at five o'clock on a Friday 87 00:05:22,960 --> 00:05:24,960 asking you to come down to the Fed, 88 00:05:24,960 --> 00:05:28,000 and I have no doubt you were all eager to start your weekends. 89 00:05:28,000 --> 00:05:29,560 I'm sorry if you had plans. 90 00:05:30,960 --> 00:05:33,800 I hope the presence of Treasury Secretary Paulson... 91 00:05:33,800 --> 00:05:35,360 Oh, Jesus, Tim. 92 00:05:35,360 --> 00:05:36,960 We all know each other here. 93 00:05:36,960 --> 00:05:39,920 ..will impress upon you the gravity of the situation. 94 00:05:42,040 --> 00:05:44,760 You've all watched Lehman take a nosedive. 95 00:05:44,760 --> 00:05:48,080 They're not going to survive trading on Monday 96 00:05:48,080 --> 00:05:49,720 and we wanted to ask for your... 97 00:05:49,720 --> 00:05:50,800 Inspiration. 98 00:05:52,080 --> 00:05:55,040 You're the best minds on Wall Street... 99 00:05:55,040 --> 00:05:58,360 Tim, I think you can cut the crap about now. 100 00:06:01,000 --> 00:06:04,600 There's no public money for a bail out of Lehman Brothers. 101 00:06:06,440 --> 00:06:09,640 If we can't figure out a way to keep them standing, 102 00:06:09,640 --> 00:06:13,480 they're going to be bankrupt when trading opens in Japan on Monday. 103 00:06:13,480 --> 00:06:16,320 What game are you playing? 104 00:06:16,320 --> 00:06:18,640 There's no taxpayer money for this. 105 00:06:18,640 --> 00:06:20,200 - Bullshit. - Not a penny. 106 00:06:20,200 --> 00:06:21,920 It's not bullshit. 107 00:06:21,920 --> 00:06:25,080 If it's not bullshit, what the hell are we all doing here? 108 00:06:25,080 --> 00:06:27,560 We'll arbitrate. We'll facilitate. 109 00:06:27,560 --> 00:06:29,680 - We'll broker a deal... - We get it. 110 00:06:29,680 --> 00:06:32,000 This is your hardball starting position. 111 00:06:32,000 --> 00:06:33,680 This is not a starting position. 112 00:06:33,680 --> 00:06:35,920 This IS the position. 113 00:06:35,920 --> 00:06:40,000 And even if the money were accessible there would be no political will... 114 00:06:40,000 --> 00:06:44,520 Political will? Was there political will to bail out Fannie and Freddie? 115 00:06:44,520 --> 00:06:48,160 - Things were different then. - That was five days ago! 116 00:06:48,160 --> 00:06:50,040 - CHUCKLING - So... 117 00:06:50,040 --> 00:06:52,080 what do you mean? 118 00:06:52,080 --> 00:06:56,280 Arbitrate what? Facilitate what? 119 00:06:56,280 --> 00:06:58,400 You brought us here to brainstorm? 120 00:06:58,400 --> 00:07:02,040 Damn it, Jamie, are you the only one here with no exposure to Lehmans? 121 00:07:02,040 --> 00:07:06,320 Or perhaps you've been too busy bombarding them with demands for collateral 122 00:07:06,320 --> 00:07:08,520 - to notice they're going belly up! - I have the right! 123 00:07:08,520 --> 00:07:11,160 - Of course. - I have a fiduciary obligation... 124 00:07:11,160 --> 00:07:13,320 How dare you! How dare you... 125 00:07:13,320 --> 00:07:15,360 Calm down, Jamie, he didn't mean... 126 00:07:15,360 --> 00:07:18,000 He did mean it. One more comment like that... 127 00:07:20,840 --> 00:07:23,920 - And why isn't Fuld here? - You WANT him here? 128 00:07:23,920 --> 00:07:25,960 There's plenty of blame to go round. 129 00:07:27,160 --> 00:07:28,520 But if they go down, 130 00:07:28,520 --> 00:07:31,200 we're all going to take a hit. 131 00:07:33,200 --> 00:07:35,360 You're hanging Lehman out to dry? 132 00:07:40,400 --> 00:07:42,480 So...do it then. 133 00:07:42,480 --> 00:07:44,760 I got a train to catch. 134 00:07:48,400 --> 00:07:51,200 The West is fucked. 135 00:07:51,200 --> 00:07:53,320 We fucked it up. 136 00:07:53,320 --> 00:07:55,240 Oh, not just you and me... 137 00:07:55,240 --> 00:07:57,840 all of us. The West. 138 00:07:57,840 --> 00:07:59,520 It's done. It's over. 139 00:07:59,520 --> 00:08:01,560 You wanna call it a game? 140 00:08:01,560 --> 00:08:03,800 This is the game. 141 00:08:03,800 --> 00:08:06,760 You want your great-grandchildren speaking Chinese? 142 00:08:06,760 --> 00:08:08,160 The dollar's going to go. 143 00:08:08,160 --> 00:08:11,720 We had Rome, then Europe, then this. 144 00:08:11,720 --> 00:08:17,600 Us, this thing with cars and stereos and hoola-hoops 145 00:08:17,600 --> 00:08:19,400 and we screwed it all up. 146 00:08:19,400 --> 00:08:23,800 We ran through it all, this stuff, 147 00:08:23,800 --> 00:08:26,880 and we've come out on the other side where it's... 148 00:08:28,400 --> 00:08:30,320 I don't know, 149 00:08:30,320 --> 00:08:31,600 where is this place? 150 00:08:31,600 --> 00:08:33,760 Oh, yeah... 151 00:08:33,760 --> 00:08:39,000 we have this one weekend where maybe we can come up with something 152 00:08:39,000 --> 00:08:41,440 to hold it all together a little while longer. 153 00:09:06,400 --> 00:09:11,360 'It seems that you've got about 85 billion worth of troubled loans 154 00:09:11,360 --> 00:09:15,360 'which puts you at least ten billion underwater. 155 00:09:15,360 --> 00:09:17,920 'Ken, you're Bank of America, you're retail. 156 00:09:17,920 --> 00:09:21,560 - 'Let my people go over the books with you. - We've been over the books. 157 00:09:21,560 --> 00:09:23,240 'But if we go over them with you... 158 00:09:23,240 --> 00:09:25,440 'So that you can help us read them correctly?' 159 00:09:25,440 --> 00:09:29,360 Dick, we're not confused about your numbers. 160 00:09:29,360 --> 00:09:32,600 - Your good assets aren't enough to... - Our "good assets"?! 161 00:09:32,600 --> 00:09:36,000 We're fucking Lehman Brothers! Do you know what this company's worth? 162 00:09:36,000 --> 00:09:39,160 Well yes, Dick, I believe I do. 163 00:09:40,680 --> 00:09:44,280 - Have you been to Paulson? - We asked him to take 70 billion 164 00:09:44,280 --> 00:09:47,560 - 'of the stink off your books, but...' - 70 billion?! 165 00:09:47,560 --> 00:09:49,720 It's not my number, Dick. We have a board. 166 00:09:49,720 --> 00:09:51,240 Paulson's offering nothing. 167 00:09:51,240 --> 00:09:56,640 He's trying to facilitate some sort of private sector solution, but... 168 00:09:56,640 --> 00:09:58,720 'Ken, can you...' 169 00:09:58,720 --> 00:10:01,000 - hold on just one... - 'Sure.' 170 00:10:04,800 --> 00:10:06,440 TOY SQUEAKS 171 00:10:12,480 --> 00:10:15,680 - I'm here. - 'I'll call you if anything changes.' 172 00:10:15,680 --> 00:10:19,960 If it's any comfort, Paulson is having another valuation done tonight. 173 00:10:19,960 --> 00:10:25,120 - Another? Of my... - By a mixed, disinterested group of... - Ken, don't decide anything yet. 174 00:10:25,120 --> 00:10:27,720 I can get Paulson to turn around. I'll call you back. 175 00:10:29,520 --> 00:10:33,040 - Zach! - I'm here. - I want you down at the Fed tonight. 176 00:10:33,040 --> 00:10:36,280 - Get in on that valuation. Get Paulson on the phone! - I'm on it! 177 00:10:36,280 --> 00:10:39,440 Mixed? Disinterested?! 178 00:10:39,440 --> 00:10:43,400 I'll bet he's got a team built a team from his cronies at Goldman Sachs. 179 00:10:43,400 --> 00:10:46,040 Band of fucking villains! 180 00:10:46,040 --> 00:10:49,760 Conspiring like Roman senators! Private sector... Move! 181 00:10:52,320 --> 00:10:53,920 Paulson's out of reach. 182 00:10:59,080 --> 00:11:00,480 Right. 183 00:11:13,280 --> 00:11:15,840 Harvey, it's Dick Fuld. 184 00:11:15,840 --> 00:11:18,320 I need you in my office. 185 00:11:18,320 --> 00:11:21,000 No, I'm afraid it can't. 186 00:11:23,880 --> 00:11:26,720 So, there are two banks courting Lehman right now. 187 00:11:26,720 --> 00:11:29,200 Bank of America, and Barclays in the UK. 188 00:11:29,200 --> 00:11:33,720 Neither of them will touch it while it's loaded down with toxic assets. 189 00:11:33,720 --> 00:11:36,160 You want us to buy Lehman's toxic assets? 190 00:11:36,160 --> 00:11:38,920 Maybe there's a way you could ringfence them. Something. 191 00:11:38,920 --> 00:11:44,520 Look, if you're telling us you're not backstopping anyone any more, 192 00:11:44,520 --> 00:11:46,840 we're going to be fighting for our lives. 193 00:11:46,840 --> 00:11:49,640 But if you did decide to buy them, 194 00:11:49,640 --> 00:11:51,840 - as a consortium... - That would be... 195 00:11:51,840 --> 00:11:54,200 Is that even legal? 196 00:11:54,960 --> 00:11:57,760 Aren't you asking us to risk our shareholders'... 197 00:11:57,760 --> 00:12:00,600 That's what you do every day, risk your shareholders' money. 198 00:12:00,600 --> 00:12:04,680 Just running the numbers, if you took on these assets as a group 199 00:12:04,680 --> 00:12:07,880 you'd take a smaller hit than you would on a Lehman bankruptcy. 200 00:12:07,880 --> 00:12:10,640 We're not all exposed to Lehman in the same degree. 201 00:12:10,640 --> 00:12:13,200 Oh, community spirit. That warms my heart. 202 00:12:13,200 --> 00:12:14,560 You're all exposed. 203 00:12:14,560 --> 00:12:18,160 And you're all in line in order of size. 204 00:12:18,160 --> 00:12:22,360 - Merrill is next, then Morgan Stanley. - We're not next. What are... - This is bullshit. 205 00:12:22,360 --> 00:12:25,880 - Have you read our statements, Hank? - Yes, John, I know your figures. 206 00:12:25,880 --> 00:12:28,240 I even know what you spent on breakfast. 207 00:12:28,240 --> 00:12:30,000 You're next in line. Trust me. 208 00:12:31,720 --> 00:12:35,720 OK, so...I want someone to buy our toxic assets. 209 00:12:35,720 --> 00:12:37,560 Huh? 210 00:12:37,560 --> 00:12:39,120 Where does it end? 211 00:12:39,120 --> 00:12:41,640 Where does it stop? 212 00:12:41,640 --> 00:12:43,280 Why them, and not us? 213 00:12:43,280 --> 00:12:46,480 Yeah. Why them? 214 00:12:46,480 --> 00:12:49,000 Maybe we should just let 'em fail. 215 00:12:49,000 --> 00:12:52,120 Maybe that'll be the play that washes away all our sins. 216 00:12:53,800 --> 00:12:55,960 You decide. 217 00:12:57,960 --> 00:13:02,160 What if we can't agree on a solution? 218 00:13:05,520 --> 00:13:10,520 Then we have to start anticipating what will happen when Lehman does go bankrupt, 219 00:13:10,520 --> 00:13:14,240 and contemplate how the rest of the world can contain the damage. 220 00:13:26,760 --> 00:13:29,000 I think Bank of America's free now. 221 00:13:29,000 --> 00:13:32,360 - They're not courting Lehman? - No. I think that's dead. 222 00:13:32,360 --> 00:13:35,040 They're liquid. They love our shop. 223 00:13:35,040 --> 00:13:37,520 - They love retail. - It's good to have options. 224 00:13:37,520 --> 00:13:39,920 We should make a move. You should give Lewis a call. 225 00:13:39,920 --> 00:13:41,760 It's a bad time to look weak. 226 00:13:41,760 --> 00:13:43,400 We'd only be selling a stake. 227 00:13:43,400 --> 00:13:46,120 You know what people will think if we sell a stake now? 228 00:13:46,120 --> 00:13:48,360 It's a downpayment. The thin end of the wedge. 229 00:13:48,360 --> 00:13:50,560 Who cares what it looks like? Nobody's lending. 230 00:13:50,560 --> 00:13:54,720 Lehman's falling apart because they can't borrow their operating costs. 231 00:13:54,720 --> 00:13:57,080 John, we need a line of credit from Monday, 232 00:13:57,080 --> 00:13:59,280 or I don't think we'll last out the week. 233 00:14:20,120 --> 00:14:23,280 The first thing you need to know is none of this is happening. 234 00:14:23,280 --> 00:14:26,480 The second thing is you don't discuss this with anyone. 235 00:14:26,480 --> 00:14:30,680 If anyone saw you come in or sees you go out, you were here to advise on the sale. 236 00:14:30,680 --> 00:14:31,960 What's not happening? 237 00:14:32,920 --> 00:14:35,160 We're NOT considering bankruptcy. 238 00:14:35,160 --> 00:14:38,600 We do not need to prepare a Chapter Seven petition. 239 00:14:38,600 --> 00:14:41,880 Barclays wants us, and Bank of America will come around. 240 00:14:41,880 --> 00:14:43,800 As an exercise, however, 241 00:14:43,800 --> 00:14:46,240 we will put together a bare-bones filing 242 00:14:46,240 --> 00:14:49,960 so that we know every strategic position has been covered. 243 00:14:49,960 --> 00:14:54,080 - And when do you not want this done by? - This weekend. 244 00:14:57,920 --> 00:15:00,880 First of all, we don't have a team. 245 00:15:00,880 --> 00:15:03,280 Second, YOU don't have a team. 246 00:15:03,280 --> 00:15:06,880 Everyone's working on due diligence for the mergers. 247 00:15:06,880 --> 00:15:12,200 Third, nobody can put together a bankruptcy of this size in two days. 248 00:15:12,200 --> 00:15:15,720 And fourth, the government's not going to let you go down. 249 00:15:15,720 --> 00:15:19,800 Paulson's opening position is that we sink or swim. 250 00:15:19,800 --> 00:15:22,280 Are you kidding? 251 00:15:25,480 --> 00:15:30,160 It would be a financial disaster the likes of which the world has never seen before. 252 00:15:30,160 --> 00:15:33,440 It'd be like the American government itself going bankrupt. 253 00:15:33,440 --> 00:15:37,400 It would be like the US dollar being rendered worthless 254 00:15:37,400 --> 00:15:42,080 and everyone being told to start over with goats and pebbles. 255 00:15:42,080 --> 00:15:46,840 It would be like Rome selling the Vatican to the Japanese to make it a hotel, 256 00:15:46,840 --> 00:15:50,400 and hiring the Pope as a bellboy. 257 00:15:50,400 --> 00:15:54,560 It's just a fantasy. It's a through the looking glass world. 258 00:15:55,880 --> 00:15:59,240 It's something from the book of Revelations. 259 00:16:00,760 --> 00:16:03,320 And he cried mightily with a strong voice, 260 00:16:03,360 --> 00:16:07,120 saying, Babylon the great is fallen, is fallen, 261 00:16:07,120 --> 00:16:10,520 and is become the habitation of devils, 262 00:16:10,520 --> 00:16:13,480 and a hold of every foul spirit, 263 00:16:13,480 --> 00:16:17,960 and a cage of every unclean and hateful bird. 264 00:16:17,960 --> 00:16:21,600 For all nations have drunk of the wine of the wrath of her fornication, 265 00:16:21,600 --> 00:16:25,080 and the kings of the earth have committed fornication with her, 266 00:16:25,080 --> 00:16:30,400 and the merchants of the earth are waxed rich through the abundance of her delicacies. 267 00:16:32,480 --> 00:16:34,760 CLOCK TICKS 268 00:16:51,480 --> 00:16:54,520 OK, we've only got a few hours to value this portfolio... 269 00:16:54,520 --> 00:16:57,520 This is gonna be your best friend. 270 00:16:57,520 --> 00:17:01,840 OK, guys, I know it looks a lot, but if we put on our best heads... 271 00:17:09,880 --> 00:17:11,600 MUMBLING 272 00:17:33,680 --> 00:17:38,240 A lot of people ask me how the subprime mortgage crisis brought down Wall Street. 273 00:17:38,240 --> 00:17:42,360 Well, my sister knows. That's how she got her house. 274 00:17:43,720 --> 00:17:46,200 First we found ourselves a house. 275 00:17:50,320 --> 00:17:52,000 Then we found a mortgage broker. 276 00:17:52,000 --> 00:17:55,880 The waitress at the Cracker Barrel Restaurant said he could work miracles. 277 00:17:55,880 --> 00:17:58,760 So, we handed him our pay slips and he made corrections 278 00:17:58,760 --> 00:18:02,880 using a free program you get from the internet which changes pictures. 279 00:18:05,240 --> 00:18:08,160 A lot of people use it to make themselves look pretty, 280 00:18:08,160 --> 00:18:10,520 but we just used it to make ourselves look rich, 281 00:18:10,520 --> 00:18:13,080 which I'm sure the Lord would think was not as bad 282 00:18:13,080 --> 00:18:15,720 because you're not changing the looks God gave you, 283 00:18:15,720 --> 00:18:18,880 you're just changing what you earn, which God allows anyway, 284 00:18:18,880 --> 00:18:22,400 because if he didn't, nobody would be able to apply for a different job. 285 00:18:22,400 --> 00:18:27,760 Then the Broker phoned somebody called a Lender and she barely even looked at our paperwork. 286 00:18:27,760 --> 00:18:33,400 She just pushed the 'SEND' button and our forms were approved and off to New York where people in White Coats 287 00:18:33,400 --> 00:18:37,600 worked throughout the night putting documents into different kinds of piles. 288 00:18:37,600 --> 00:18:41,400 Then they send these documents on to bankers, like my brother. 289 00:18:42,440 --> 00:18:44,480 And from now on they're called Securities, 290 00:18:44,480 --> 00:18:46,840 even though nothing else about them has changed 291 00:18:46,840 --> 00:18:49,080 and they used to be called mortgage contracts. 292 00:18:49,080 --> 00:18:53,280 Then once they're called Securities they're a product that you can sell, 293 00:18:53,280 --> 00:18:56,320 like...like a table, or make-up. 294 00:18:56,320 --> 00:18:59,000 Now, here's the weird thing they do. 295 00:19:00,400 --> 00:19:06,120 The Bankers pay a man to give the Securities a grade, like in school. 296 00:19:09,360 --> 00:19:12,560 Now they're called CDOs and the bankers, 297 00:19:12,560 --> 00:19:16,040 they buy and sell these back and forth to each other for some reason. 298 00:19:16,040 --> 00:19:21,160 Then they mix them up some more, staple a few together, and send them back to the man for a new rating. 299 00:19:24,000 --> 00:19:28,240 And the bankers keep buying and selling CDOs and chopping them up 300 00:19:28,240 --> 00:19:30,400 and putting them back together differently 301 00:19:30,400 --> 00:19:33,440 and selling them for double or triple what they paid for them, 302 00:19:33,440 --> 00:19:39,360 and every time they do this the CDO gets thicker and thicker and that rating gets weirder and weirder. 303 00:19:39,360 --> 00:19:42,520 TELEPHONES RING 304 00:19:42,520 --> 00:19:45,920 The bankers liked CDOs so much they wanted more and more of them, 305 00:19:45,920 --> 00:19:48,360 and they didn't care if somebody couldn't pay 306 00:19:48,360 --> 00:19:51,480 because they just wanted the loan papers to call Securities 307 00:19:51,480 --> 00:19:55,040 and then to turn into CDOs to sell them as fast as they could anyway 308 00:19:55,040 --> 00:19:57,320 and make a huge whopping profit overnight. 309 00:19:57,320 --> 00:19:59,400 So they didn't care what the paper's worth. 310 00:19:59,400 --> 00:20:04,480 I mean, paper ain't worth nothing unless two crazy people's willing to pay each other for them. 311 00:20:04,480 --> 00:20:09,120 But when a lot of people didn't pay their mortgages, some people remembered that the houses 312 00:20:09,120 --> 00:20:12,920 and loans were somehow connected to the CDOs in some funny legal way, 313 00:20:12,920 --> 00:20:17,760 and that this was bad, then nobody wanted to buy CDOs any more. 314 00:20:17,760 --> 00:20:22,280 So suddenly people owned and couldn't get rid of a lot of very, very expensive things 315 00:20:22,280 --> 00:20:28,600 that were really only worthless paper that was somehow connected to things that weren't even there. 316 00:20:49,280 --> 00:20:51,840 - What? - This. 317 00:20:51,840 --> 00:20:55,080 We have some of that, but we've marked it at 75. 318 00:20:55,080 --> 00:20:58,800 - We marked it at 90. - And we're really... 319 00:20:58,800 --> 00:21:00,480 - I know. - Aggressive. 320 00:21:00,480 --> 00:21:06,840 And look at this. We value this at 43. 321 00:21:08,040 --> 00:21:10,720 You remember how you valued it? 322 00:21:10,720 --> 00:21:13,560 - And you've marked it at 60. That's... - I didn't personally. 323 00:21:13,560 --> 00:21:16,280 Yeah, but you're here. You're the one who's here. 324 00:21:16,280 --> 00:21:19,240 I'm here, but I'm not. 325 00:21:19,240 --> 00:21:22,560 Look you're... What do you mean, you're here but you're not? 326 00:21:22,560 --> 00:21:23,920 I mean, officially. 327 00:21:35,480 --> 00:21:39,440 Shit, I just realized something about Fight Club. 328 00:21:39,440 --> 00:21:43,200 - The movie? - Yeah, I just had this vision about it. 329 00:21:43,200 --> 00:21:46,840 You know in the beginning when Ed Norton can't sleep? 330 00:21:46,840 --> 00:21:52,640 - Yeah. - And he says, when you don't sleep for a long time, everything seems unreal and far away? 331 00:21:52,640 --> 00:21:56,520 Everything becomes a copy of a copy of a copy? 332 00:21:56,520 --> 00:21:58,400 - He says that? - Yeah. 333 00:22:00,520 --> 00:22:02,400 Well, I just had that insight. 334 00:22:02,400 --> 00:22:04,640 Wow. 335 00:22:04,640 --> 00:22:08,600 And like... you know how Ed Norton buys all his furniture from Ikea... 336 00:22:08,600 --> 00:22:12,960 which mass produces the same item again and again and again... 337 00:22:12,960 --> 00:22:18,040 And then all his furniture blows up in one big explosion and he's left with nothing, he thinks... 338 00:22:18,040 --> 00:22:20,960 but he's left with his body, right? 339 00:22:20,960 --> 00:22:25,240 He's left with his ability to feel pain. So he fights. 340 00:22:25,240 --> 00:22:27,440 And then he can feel, 341 00:22:27,440 --> 00:22:31,320 and things aren't a copy of a copy of a copy any more. He can... 342 00:22:31,320 --> 00:22:34,400 He can experience the world, 343 00:22:34,400 --> 00:22:37,080 and the things of the world 344 00:22:37,080 --> 00:22:40,040 become the real things. 345 00:22:40,040 --> 00:22:44,080 I never knew you could be so profound without chemicals. 346 00:22:44,080 --> 00:22:48,040 Man, I'm made of chemicals. You see? 347 00:22:48,040 --> 00:22:50,520 The 'nothing' is the 'something'! 348 00:23:00,520 --> 00:23:02,280 PHONE BUZZES 349 00:23:10,480 --> 00:23:11,520 Greg. 350 00:23:11,520 --> 00:23:14,440 I wanted your first thought of the day to be Bank of America. 351 00:23:14,440 --> 00:23:18,200 - 'I wanted the first words you heard to be Call...' - I'm still in bed. 352 00:23:18,200 --> 00:23:20,080 We need to make our intentions clear. 353 00:23:20,080 --> 00:23:22,560 'unambiguous, using words of one syllable.' 354 00:23:22,560 --> 00:23:26,560 We want to discuss a deal TODAY. With a line of credit available Monday. 355 00:23:26,560 --> 00:23:28,400 We're so different, you and I. 356 00:23:28,400 --> 00:23:31,160 You know I come from the school of soft-sell. 357 00:23:31,160 --> 00:23:34,080 - We don't have time to soft-sell. - 'It's not a question of time.' 358 00:23:34,080 --> 00:23:35,680 Soft-sell is an energy. 359 00:23:35,680 --> 00:23:42,640 It can be done quickly. Now I'm going to get up I'm gonna have a coffee before I have another thought. 360 00:23:42,640 --> 00:23:46,360 When you watch Bart make his pitch today, just imagine, next week, being in his place. 361 00:23:46,360 --> 00:23:49,320 What if we save Lehman? Have you thought about that? 362 00:23:49,320 --> 00:23:53,560 'What if we all pool our resources and rescue them? 363 00:23:53,560 --> 00:23:57,240 'What happens to the next company, the next one up in size?' 364 00:23:58,440 --> 00:24:00,680 It's us, John. You know it's us. 365 00:24:04,880 --> 00:24:09,320 Can you believe there's nowhere to get ribs at five in the morning? 366 00:24:09,320 --> 00:24:10,440 What's the report? 367 00:24:10,440 --> 00:24:13,720 They've just finished going through the books. 368 00:24:13,720 --> 00:24:14,840 What's the feeling? 369 00:24:14,840 --> 00:24:19,320 Um... Philosophical. 370 00:24:19,320 --> 00:24:21,640 - Is the Barclays team there? - 'Can't see them.' 371 00:24:21,640 --> 00:24:23,280 You haven't seen Diamond yet? 372 00:24:23,280 --> 00:24:24,800 I know he's in New York. 373 00:24:24,800 --> 00:24:26,640 I know he's in New York! Is he at the Fed? 374 00:24:26,640 --> 00:24:31,960 There's a lot of work to be done before we have something to show him. He's probably sleeping. 375 00:24:31,960 --> 00:24:35,480 Probably. Thanks. Probably. Probably! 376 00:24:52,960 --> 00:24:55,560 Samantha! I want you to double security. 377 00:24:55,560 --> 00:24:58,720 I want someone at every elevator, on every floor. 378 00:24:58,720 --> 00:25:01,760 - And triple the guard at the front. - What happened...? - Now! 379 00:25:03,200 --> 00:25:04,760 Security? 380 00:25:08,520 --> 00:25:12,360 So the idea is that we spin off another company, a 'bad bank' 381 00:25:12,360 --> 00:25:17,120 where we can place all of our toxic assets. 382 00:25:18,600 --> 00:25:20,760 We're gonna call it SpinCo. 383 00:25:20,760 --> 00:25:25,680 And we just need the shortfall f unded by outsider investors. 384 00:25:25,680 --> 00:25:31,360 Then we just shift 33 billion dollars in real estate into a new company, a 'good bank', 385 00:25:31,360 --> 00:25:35,520 which we're gonna call CleanCo. 386 00:25:35,520 --> 00:25:39,600 - And who would control SpinCo? - We would. 387 00:25:40,960 --> 00:25:42,640 Go on, take it. 388 00:25:42,640 --> 00:25:48,000 Now, Jamie, we need to put our bad debts aside so we can carry on doing what we do best. 389 00:25:48,000 --> 00:25:52,640 - Which is? - Jamie Jamie, come on Jamie. 390 00:25:52,640 --> 00:25:55,360 - We're all friends. - Here's ten bucks for a happy ending. 391 00:25:57,080 --> 00:26:01,800 If these valuations are accurate there's a 15 billion dollar hole. 392 00:26:01,800 --> 00:26:05,000 Accurate? They were done overnight with a pot of coffee. 393 00:26:05,000 --> 00:26:07,080 If Paulson had let me put a team... 394 00:26:07,080 --> 00:26:09,320 Right. The blind leading the blind. 395 00:26:09,320 --> 00:26:11,680 Oh, sure, you do everything by the book. 396 00:26:11,680 --> 00:26:15,680 Tell me, Jamie, could you value a CDO? 397 00:26:15,680 --> 00:26:19,160 - No, but I know a man who could. - No you don't, no. 398 00:26:19,160 --> 00:26:21,800 You know a man who'll stamp triple-A on your ass 399 00:26:21,800 --> 00:26:24,000 if you get him a floor seat at the Lakers game. 400 00:26:24,000 --> 00:26:25,600 You can't value a CDO? 401 00:26:25,600 --> 00:26:27,840 Whoever says he can is full of shit. 402 00:26:27,840 --> 00:26:31,200 We might as well pick a number out of the air. 403 00:26:31,200 --> 00:26:34,280 How much do you need for the bad bank? 404 00:26:34,280 --> 00:26:38,320 - 25 billion. - What?! Last week it was worth 40 billion, 405 00:26:38,320 --> 00:26:42,000 Wednesday it was 33, and last night it was valued at 21. 406 00:26:42,000 --> 00:26:45,800 If we hurry and buy it now we should be able to lose all our money by Friday. 407 00:26:45,800 --> 00:26:51,360 Our portfolio is supported by at least 8 billion in equity, and that's a conservative estimate. 408 00:26:51,360 --> 00:26:55,360 Conservative?! Who taught you how to be conservative, McDade? Dick Fuld? 409 00:26:59,120 --> 00:27:01,320 Conservative! Where does this end? 410 00:27:03,480 --> 00:27:05,400 What happens when Merrill goes down? 411 00:27:06,840 --> 00:27:08,000 We're not going down. 412 00:27:09,200 --> 00:27:13,040 Thain, if you stepped away from the Bloomberg cameras long enough 413 00:27:13,040 --> 00:27:16,680 to read your own balance sheet, you'd see it was as bad as Dick Fuld's. 414 00:27:16,680 --> 00:27:22,080 Today we're here to deal with Lehman Brothers. Whatever happens next... 415 00:27:22,080 --> 00:27:24,480 maybe Paulson won't be so... 416 00:27:24,480 --> 00:27:27,000 - What? - Intransigent. 417 00:27:30,120 --> 00:27:32,120 We won't be needing government money. 418 00:27:34,920 --> 00:27:36,800 I'm afraid I have to excuse myself. 419 00:27:45,600 --> 00:27:47,480 And what about you, Mack? 420 00:27:47,480 --> 00:27:49,240 When are you going to hold out your hand? 421 00:27:49,240 --> 00:27:50,960 Ah, fuck you, Diamond. 422 00:27:50,960 --> 00:27:52,520 We're healthy. 423 00:27:52,520 --> 00:27:55,720 - We're looking for opportunities. - I'll bet you are. 424 00:27:55,720 --> 00:27:58,520 - What's that supposed to mean? - Just what I said. 425 00:27:58,520 --> 00:28:01,760 He's trying to be mysterious. There's nothing behind it. 426 00:28:01,760 --> 00:28:03,960 - Is that true? - Think what you like. 427 00:28:03,960 --> 00:28:06,040 - He did it again! - Hey. Hey, hey! 428 00:28:06,040 --> 00:28:07,280 What are we doing here? 429 00:28:07,280 --> 00:28:11,040 The point is not which one of us happens to be weakest, right now. 430 00:28:11,040 --> 00:28:12,920 We're all in each other's pockets. 431 00:28:12,920 --> 00:28:15,320 What happens to one of us, happens to all of us. 432 00:28:15,320 --> 00:28:19,240 Ah, does it? Ah, Jesus, send me toward the nearest confessional. 433 00:28:21,000 --> 00:28:25,400 I'm gonna excuse your behaviour because I think you have a chemical imbalance. 434 00:28:28,760 --> 00:28:30,280 Ken it's John Thain... 435 00:28:30,280 --> 00:28:33,920 Mr Thain. To what do I owe this pleasure? 436 00:28:33,920 --> 00:28:35,240 I'm at the Fed in New York. 437 00:28:35,240 --> 00:28:38,000 'Yes, I heard something was going on down there.' 438 00:28:38,000 --> 00:28:40,280 I heard you've closed the book on Lehman. 439 00:28:40,280 --> 00:28:43,440 My due diligence team is flying back this afternoon. 440 00:28:43,440 --> 00:28:45,400 Perhaps they should stay. 441 00:28:45,400 --> 00:28:50,880 - Meaning? - 'Perhaps you'd like to discuss other opportunities.' 442 00:28:50,880 --> 00:28:54,760 This sounds like the sort of chat we should be having in person. 443 00:28:54,760 --> 00:28:57,440 Yes. I believe it is. 444 00:28:57,440 --> 00:29:00,040 I have Dick Fuld on the other line. 445 00:29:00,040 --> 00:29:02,480 Tell him I've left for New York. 446 00:29:02,480 --> 00:29:05,280 'I believe he's in the air already. Any message?' 447 00:29:05,280 --> 00:29:06,720 No. He's got my numbers. 448 00:29:14,880 --> 00:29:19,360 Look, If we're going to get Barclays we need to buy it at a premium to the market value. 449 00:29:19,360 --> 00:29:22,480 - I agree. - I think we should pay the 25. 450 00:29:22,480 --> 00:29:24,000 You're all crazy! 451 00:29:29,920 --> 00:29:33,240 Bart, Ian, could you give us a few? 452 00:29:35,560 --> 00:29:36,880 Yeah, OK. 453 00:29:47,800 --> 00:29:49,760 I think we should backstop Lehman. 454 00:29:49,760 --> 00:29:53,280 So they overvalued their portfolio. 455 00:29:53,280 --> 00:29:57,640 - We all try to maximise our perceived value. - You wrote the book, Blankfein. 456 00:29:57,640 --> 00:30:00,800 But I think we should structure the deal in such a way 457 00:30:00,800 --> 00:30:03,040 that the mortgages pay us back over time. 458 00:30:03,040 --> 00:30:07,400 Yes. But also, now we know none of us is too big to fail. 459 00:30:07,400 --> 00:30:13,080 None of us is too precious that the government will step in at the last minute and save our asses. 460 00:30:13,080 --> 00:30:14,800 Did he say asses or assets? 461 00:30:14,800 --> 00:30:20,560 I think we might also talk about structuring a rainy day fund 462 00:30:20,560 --> 00:30:22,760 for those of us who... 463 00:30:22,760 --> 00:30:24,680 Survive? 464 00:30:46,320 --> 00:30:48,560 - Samantha, get... - Yes? 465 00:30:50,440 --> 00:30:52,240 Don't worry. I'll do it. 466 00:31:16,120 --> 00:31:18,240 MOBILE RINGS 467 00:31:21,120 --> 00:31:22,400 Paulson. 468 00:31:27,040 --> 00:31:28,200 Hank Paulson. 469 00:31:31,160 --> 00:31:32,920 It's Dick. 470 00:31:42,160 --> 00:31:44,520 Yeah, I know, Dick, we helped Bear, 471 00:31:44,520 --> 00:31:47,280 and they're a lot smaller than you are. 472 00:31:47,280 --> 00:31:49,440 Got any new material? 473 00:31:49,440 --> 00:31:52,040 'Have you guys come up with anything?' 474 00:31:52,040 --> 00:31:53,320 Nothing legal. 475 00:31:53,320 --> 00:31:58,360 If you say it would be illegal to help us because we're under-collateralised... 476 00:31:58,360 --> 00:31:59,960 I'd be off your Christmas list? 477 00:32:01,600 --> 00:32:03,560 I think you do what you do. 478 00:32:05,080 --> 00:32:08,120 I think you get something in your head... 479 00:32:08,120 --> 00:32:10,560 Just like you do. 480 00:32:10,560 --> 00:32:13,640 I think the two of us should learn to dither a little more. 481 00:32:18,960 --> 00:32:20,920 This is a beautiful old bank. 482 00:32:23,080 --> 00:32:26,160 '25,000 jobs.' 483 00:32:26,160 --> 00:32:29,680 - History. - Oh, that history. 484 00:32:31,200 --> 00:32:33,920 We're all made of the same stuff. 485 00:32:35,440 --> 00:32:38,880 How can we just be cut apart from the rest? 486 00:32:38,880 --> 00:32:40,520 'It doesn't make sense.' 487 00:32:40,520 --> 00:32:42,680 I don't know if we aren't making sense now 488 00:32:42,680 --> 00:32:44,800 or if we're just starting to make sense. 489 00:32:44,800 --> 00:32:47,680 'You can't say we've run out of money.' 490 00:32:47,680 --> 00:32:51,640 - This isn't the kind of money you can run out of. - You're right. 491 00:32:51,640 --> 00:32:54,720 There's money out there. There's money all over the place. 492 00:32:54,720 --> 00:32:57,480 'It's just not so obvious how to get your hands on it.' 493 00:32:57,480 --> 00:32:59,840 - Hank... - 'Not to say you didn't get close.' 494 00:32:59,840 --> 00:33:03,160 Blackstone, Colony, JE Robert... 495 00:33:03,160 --> 00:33:06,720 - Why jump to sell just after a dip in the share price? - 'And Korea.' 496 00:33:10,360 --> 00:33:12,760 The money was on the table, Dick. 497 00:33:12,760 --> 00:33:14,760 Only you never thought it was enough. 498 00:33:14,760 --> 00:33:19,320 'You could've solved your liquidity problem right there, but no,' 499 00:33:19,320 --> 00:33:22,280 you were just sure your luck was going to change. 500 00:33:22,280 --> 00:33:25,120 "If I only hold out one more trading day." 501 00:33:26,880 --> 00:33:30,160 You were holding a pair of eights, Dick, 502 00:33:30,160 --> 00:33:32,240 and you bet the farm on the river card. 503 00:33:33,760 --> 00:33:36,280 If I thought there was a note of superiority... 504 00:33:36,280 --> 00:33:40,120 'The time came when you should have folded, and you didn't.' 505 00:33:40,120 --> 00:33:42,520 Something in you told you to take the leap. 506 00:33:44,560 --> 00:33:46,840 You were remarkable. 507 00:33:46,840 --> 00:33:50,720 'The blindness was exquisite.' 508 00:33:50,720 --> 00:33:55,200 The problem is we're not dealing in months any more. 509 00:33:55,200 --> 00:33:59,280 Now it's a matter of hours, minutes. 510 00:34:03,080 --> 00:34:05,040 Can I ask you something? 511 00:34:05,040 --> 00:34:07,760 And will you...you know? 512 00:34:07,760 --> 00:34:09,360 Sure. 513 00:34:10,920 --> 00:34:13,280 Is this... 514 00:34:13,280 --> 00:34:15,440 anything to do with... 515 00:34:15,440 --> 00:34:20,400 you know, you and me, things that have happened? 516 00:34:22,360 --> 00:34:24,800 I don't remember everything. 517 00:34:27,240 --> 00:34:29,720 I probably don't remember anything. 518 00:34:29,720 --> 00:34:31,640 But I know there's been some... 519 00:34:33,160 --> 00:34:35,040 - ..sour... - You and me? 520 00:34:35,040 --> 00:34:37,520 LAUGHS 521 00:34:37,520 --> 00:34:41,880 You think I feel any differently about you than anyone else on the Street? 522 00:34:41,880 --> 00:34:44,560 You think these other guys are my buddies? 523 00:34:44,560 --> 00:34:45,920 No. 524 00:34:47,280 --> 00:34:50,040 No, this goes way beyond personal. 525 00:34:50,040 --> 00:34:54,240 The laws for this weekend haven't even been written yet. 526 00:34:56,880 --> 00:34:59,000 Nobody knows what to do. 527 00:35:00,560 --> 00:35:02,680 Nobody knows what their job is. 528 00:35:06,080 --> 00:35:07,720 Let me ask you this. 529 00:35:09,720 --> 00:35:12,040 Is what you're doing now, 530 00:35:12,040 --> 00:35:17,200 is this the thing that's most likely, when you look back in a year, to make you say... 531 00:35:19,480 --> 00:35:24,920 ..shit, with what little we knew, we did it, 532 00:35:24,920 --> 00:35:27,360 we put the pieces back together. 533 00:35:29,440 --> 00:35:34,320 I couldn't see the future, but I just... 534 00:35:34,320 --> 00:35:39,080 had that luck and it all fell together just right. 535 00:35:39,080 --> 00:35:41,480 Is that what you're going to say? 536 00:35:43,840 --> 00:35:45,360 No. 537 00:35:47,080 --> 00:35:51,960 No, I don't think anything I do this weekend is going to make me say that. 538 00:35:58,120 --> 00:36:01,920 What would you do...if you were me? 539 00:36:05,360 --> 00:36:07,360 Don't pick at the boneyard. 540 00:36:08,880 --> 00:36:10,880 Bank of America's dead. 541 00:36:12,400 --> 00:36:14,280 You've got Barclays. 542 00:36:15,800 --> 00:36:17,320 That's what you've got. 543 00:36:18,400 --> 00:36:20,000 Barclays. 544 00:36:20,000 --> 00:36:22,920 PHONE DOWN 545 00:37:21,960 --> 00:37:23,720 They agreed to 25. 546 00:37:26,680 --> 00:37:28,520 And what is Barclays saying? 547 00:37:28,520 --> 00:37:31,560 They're reviewing some of the initial deal points. 548 00:37:31,560 --> 00:37:33,680 But the chiefs agreed to 25! 549 00:37:33,680 --> 00:37:37,760 - Dick, it's a victory for us. - Fuck the chiefs! How did Barclays react? 550 00:37:38,640 --> 00:37:40,640 We didn't see anybody from Barclays. 551 00:37:41,640 --> 00:37:43,400 Diamond wasn't at the Fed? 552 00:37:43,400 --> 00:37:47,360 - He could have been there. - You didn't notice if Bob Diamond was at the Fed? 553 00:37:47,360 --> 00:37:50,000 I heard somebody laughing. It sounded like his laugh. 554 00:37:50,000 --> 00:37:52,560 Where did you hear the laughing? 555 00:37:53,880 --> 00:37:56,360 Well, sort of...all over. 556 00:38:05,000 --> 00:38:07,560 Get back to the Fed. Tell me when Diamond shows. 557 00:38:23,680 --> 00:38:29,640 I understand you sold more than 30 billion dollars worth of CDOs 558 00:38:29,640 --> 00:38:31,320 at 22 cents on the dollar. 559 00:38:31,320 --> 00:38:34,400 It was a risk-reduction strategy. 560 00:38:34,400 --> 00:38:36,240 But it left us well capitalised. 561 00:38:36,240 --> 00:38:39,440 If you were well capitalised you wouldn't be here. 562 00:38:39,440 --> 00:38:43,640 What I want to know is, what other time bombs have you got on the books? 563 00:38:43,640 --> 00:38:46,000 Everyone has risky assets. 564 00:38:46,000 --> 00:38:48,840 But you want me to buy your company as is. 565 00:38:48,840 --> 00:38:52,320 I'm going to need to know where the dirty laundry is buried. 566 00:38:54,520 --> 00:38:57,320 We don't want to sell Merrill Lynch. 567 00:38:58,920 --> 00:39:02,600 We want to offer you a 10% stake. 568 00:39:02,600 --> 00:39:05,720 But we want to buy it outright. 569 00:39:05,720 --> 00:39:07,600 That's our only position. 570 00:39:10,200 --> 00:39:12,560 I've always loved your shop. 571 00:39:12,560 --> 00:39:15,520 I love how you bring Wall Street to New Mexico. 572 00:39:15,520 --> 00:39:18,440 We're both retail. 573 00:39:18,440 --> 00:39:22,200 - We're a good fit. - I only took over Merrill nine months ago. 574 00:39:22,200 --> 00:39:24,320 I didn't take it over to sell it. 575 00:39:27,160 --> 00:39:31,200 You see those pictures? They're what I call real art. 576 00:39:32,240 --> 00:39:37,680 They would form the kind of exhibitions Bank of America might once have bankrolled, 577 00:39:37,680 --> 00:39:42,040 but now we find ourselves funding modern art as well, 578 00:39:42,040 --> 00:39:49,000 art that can insult everything you and I have worked our whole lives to make sacred. 579 00:39:49,000 --> 00:39:54,640 Some of it to me looks like a road accident or a human being turned inside out, 580 00:39:54,640 --> 00:39:59,600 but those who matter, culturally I mean, like to stand back, 581 00:39:59,600 --> 00:40:04,760 arms folded, brows furrowed in just the right way, 582 00:40:04,760 --> 00:40:08,440 assessing the disturbed minds of psychopaths 583 00:40:08,440 --> 00:40:12,640 and getting from this a grim kind of satisfaction 584 00:40:12,640 --> 00:40:17,920 I freely admit remains unavailable to my own sensibilities. 585 00:40:23,320 --> 00:40:24,920 The Judas Kiss. 586 00:40:26,880 --> 00:40:28,600 Exquisite, isn't it? 587 00:40:30,680 --> 00:40:33,960 But time has moved on, Mr Thain. 588 00:40:33,960 --> 00:40:35,720 The brand has to move on. 589 00:40:35,720 --> 00:40:38,280 The world is different now. 590 00:40:38,280 --> 00:40:42,960 We're currently financing an exhibition of paintings 591 00:40:42,960 --> 00:40:46,880 by Francis Bacon at the Tate Museum in London. 592 00:40:46,880 --> 00:40:49,120 Starts today. 593 00:40:49,120 --> 00:40:52,200 Do you know what his paintings look like? 594 00:40:55,480 --> 00:40:57,680 I leave that sort of thing to my wife. 595 00:40:57,680 --> 00:41:02,920 Our name, Bank of America, is on that exhibition. 596 00:41:06,880 --> 00:41:09,360 History is happening, Mr Thain... 597 00:41:09,360 --> 00:41:12,200 right now, this weekend. 598 00:41:12,200 --> 00:41:15,600 No-one is going to blame you for keeping up with it. 599 00:41:50,320 --> 00:41:52,160 ELEVATOR PINGS 600 00:42:11,120 --> 00:42:13,400 DOOR OPENS 601 00:42:15,520 --> 00:42:17,560 - Is that Diamond? - No. 602 00:42:18,720 --> 00:42:21,480 I hope he looks pleased when he reads this. 603 00:42:21,480 --> 00:42:23,920 - I hope he doesn't. - Why? 604 00:42:23,920 --> 00:42:29,520 Because if he looks pleased, it might mean he intends to pull Barclays out of the game. 605 00:42:30,760 --> 00:42:32,480 Whereas if he's poker-faced, 606 00:42:32,480 --> 00:42:36,560 it probably means he's come to play hardball. 607 00:42:36,560 --> 00:42:40,200 Some people look poker-faced even when they're happy. 608 00:42:40,200 --> 00:42:42,280 Some people distrust ecstasy. 609 00:42:42,280 --> 00:42:48,520 So, if he goes for these deal points, you think our chances are pretty good then, don't you? 610 00:42:48,520 --> 00:42:53,280 There's a lot of other stuff to get through. But this term sheet looking the way it does... 611 00:42:53,280 --> 00:42:55,800 that's one gigantic problem off our hands. 612 00:42:55,800 --> 00:42:58,160 I'm glad you think so. 613 00:42:58,160 --> 00:43:01,960 To me, there's either getting rid of the whole problem 614 00:43:01,960 --> 00:43:04,480 or being stuck with the whole problem. 615 00:43:06,120 --> 00:43:08,600 There's nothing in-between. 616 00:43:08,600 --> 00:43:11,280 DOOR OPENS 617 00:43:11,280 --> 00:43:14,560 It's Diamond. He's coming. 618 00:43:26,920 --> 00:43:29,440 FOOTSTEPS AND VOICES 619 00:43:39,160 --> 00:43:43,040 I think I heard them say "Nebuchadnezzar". 620 00:43:48,320 --> 00:43:50,360 That's got to be a good thing. 621 00:44:17,560 --> 00:44:19,800 I hear you're talking to Ken Lewis. 622 00:44:23,400 --> 00:44:28,000 Um...we've...had an informal, um... 623 00:44:28,840 --> 00:44:30,800 Don't worry about it. 624 00:44:30,800 --> 00:44:35,520 We don't need you to stay if your time can be better spent elsewhere. 625 00:44:36,600 --> 00:44:41,400 - Thank you. - If you can work out a deal with him, it's one less thing we have to worry about. 626 00:44:43,120 --> 00:44:47,000 The world is going to hell in a hand basket. AIG is in the building. 627 00:44:47,000 --> 00:44:49,560 They're haemorrhaging liquidity. 628 00:44:49,560 --> 00:44:53,800 By Wednesday they're going to be worth minus five billion. 629 00:44:55,680 --> 00:44:59,840 Jesus, these numbers... Twenty years ago you never heard them. 630 00:45:01,400 --> 00:45:03,920 Are you going to help them? 631 00:45:03,920 --> 00:45:05,560 AIG. 632 00:45:05,560 --> 00:45:07,640 We have to. 633 00:45:07,640 --> 00:45:12,320 Their credit default swaps insure half the western banking system. 634 00:45:12,320 --> 00:45:16,680 If we didn't bail them out, all that is solid melts into air. 635 00:45:19,160 --> 00:45:21,680 I'll go and see Lewis. 636 00:45:21,680 --> 00:45:24,040 Hank... 637 00:45:24,040 --> 00:45:25,760 I'm going to push for a good price. 638 00:45:30,240 --> 00:45:32,760 I'd expect nothing less. 639 00:45:35,000 --> 00:45:37,000 Go. Our prayers go with you. 640 00:45:40,240 --> 00:45:43,080 Oh, and John? 641 00:45:43,080 --> 00:45:45,240 Just so we're clear, 642 00:45:45,240 --> 00:45:47,440 I'm not telling you what to do. 643 00:46:04,400 --> 00:46:07,400 - Oh! - Rise and shine to a brand-new day. 644 00:46:09,480 --> 00:46:12,000 I thought I was dreaming. 645 00:46:13,520 --> 00:46:15,800 - We got it? - They agreed to the terms. 646 00:46:15,800 --> 00:46:18,600 I heard Bob Diamond even had a little twinkle in his eye. 647 00:46:18,600 --> 00:46:23,960 - He agreed to the terms? - I heard he liked the terms, but that's just the first hurdle, Dick... - We got it. 648 00:46:23,960 --> 00:46:26,640 Of course we fucking got it! 649 00:46:26,640 --> 00:46:30,000 We're the survivors, aren't we? Who wouldn't want Lehman Brothers! 650 00:46:30,000 --> 00:46:34,520 At this price? For Barclays it's like Christmas fucking day! 651 00:46:34,520 --> 00:46:37,600 - SAMANTHA! - I'm here! - Get me some new clothes. Zach! 652 00:46:37,600 --> 00:46:40,520 - I wouldn't go out. There's press down there. - Still? 653 00:46:40,520 --> 00:46:42,120 They're propagating. 654 00:46:42,120 --> 00:46:43,640 Zach! 655 00:46:45,480 --> 00:46:48,000 Go and get rid of the press. 656 00:46:48,000 --> 00:46:49,920 Parasites. Tell them nothing! 657 00:46:49,920 --> 00:46:53,920 Give them nothing, watch them make something out of it. We'll have a laugh about it later. Go! 658 00:46:53,920 --> 00:46:56,480 - Maybe you should turn on the news. - Why should I watch the news? 659 00:46:56,480 --> 00:46:59,280 We know what's happening. They don't. Clothes! 660 00:47:03,000 --> 00:47:04,800 HUBBUB 661 00:47:04,800 --> 00:47:07,520 Can you please tell us what's happening? 662 00:47:07,520 --> 00:47:10,120 I can assure you... I can assure you we have no comment, 663 00:47:10,120 --> 00:47:15,080 not even a comment about a comment, so if you could please just... 664 00:47:15,080 --> 00:47:18,640 That was support in helping you to reach the imaginary yellow line 665 00:47:18,640 --> 00:47:22,200 beyond which you could be accused of trespassing. 666 00:47:22,200 --> 00:47:23,240 HUBBUB 667 00:47:23,240 --> 00:47:27,480 Guys, guys, guys, Nothing's happening up there. Nothing's happening anywhere. 668 00:47:27,480 --> 00:47:32,480 We thank you for your interest and if there's anything our press secretary can do to help... 669 00:47:35,520 --> 00:47:40,640 Please! Please, guys, the yellow line, please! 670 00:47:40,640 --> 00:47:42,920 We could accept 35 dollars. 671 00:47:42,920 --> 00:47:45,320 35 dollars! 672 00:47:45,320 --> 00:47:49,760 I know you've had difficulties, but I was prepared to pay 673 00:47:49,760 --> 00:47:54,000 at least a few thousand dollars for a firm like Merrill Lynch. 674 00:47:55,120 --> 00:47:57,600 35 dollars a share. 675 00:47:59,840 --> 00:48:04,320 I suppose I could convince my board to rise to 25. 676 00:48:04,320 --> 00:48:10,400 I suppose with gargantuan effort I might convince MY board to drop to 32. 677 00:48:11,920 --> 00:48:16,720 - Why don't we just cut the crap and state the numbers we'll accept. - 29. 678 00:48:16,720 --> 00:48:19,120 - 27. - 29. 679 00:48:20,200 --> 00:48:21,720 28. 680 00:48:21,720 --> 00:48:23,840 29. 681 00:48:26,400 --> 00:48:28,400 I stay where I am. 682 00:48:28,400 --> 00:48:30,160 I like where I am. 683 00:48:30,160 --> 00:48:35,040 My title will be President of Global Banking, Securities and Wealth Management. 684 00:48:35,040 --> 00:48:39,520 I'm sure your title won't be my board's chief concern. 685 00:48:39,520 --> 00:48:42,280 We'll need an answer by midnight. 686 00:48:43,800 --> 00:48:46,360 You don't have to worry, Mr Thain. 687 00:48:46,360 --> 00:48:51,480 We have no intentions of taking your stripes away from you. 688 00:48:51,480 --> 00:48:53,920 Your face is part of the package. 689 00:48:57,520 --> 00:48:59,920 Call in the board for twelve noon. 690 00:48:59,920 --> 00:49:01,640 We'll need to ratify Barclays. 691 00:49:01,640 --> 00:49:03,800 And I want food. Catering. 692 00:49:03,800 --> 00:49:05,400 Goodies. Ribs. Meat. 693 00:49:05,400 --> 00:49:08,640 - Champagne. A spread. - You brought us back from the brink. 694 00:49:08,640 --> 00:49:10,600 This place is my life. 695 00:49:10,600 --> 00:49:14,040 Did you think I was going to let it go down? 696 00:49:14,040 --> 00:49:15,800 Where else would I go? 697 00:49:15,800 --> 00:49:17,920 What else could I do? 698 00:49:20,840 --> 00:49:23,040 It's hard not to agree with you on that score. 699 00:49:25,880 --> 00:49:29,760 Well, then I think we've covered just about everything, don't you? 700 00:49:31,280 --> 00:49:33,760 No, don't worry. 701 00:49:33,760 --> 00:49:37,120 I think we both have our hands tied on this one. 702 00:49:37,120 --> 00:49:39,520 LOW CHATTER 703 00:49:42,440 --> 00:49:44,280 DOOR OPENS 704 00:49:51,480 --> 00:49:55,120 Well, gentlemen, I'm afraid Barclays is dead. 705 00:49:57,360 --> 00:50:02,320 By British law, Barclays can't guarantee Lehman's obligations without a shareholder vote. 706 00:50:02,320 --> 00:50:06,040 - So why can't they vote? - They can. 707 00:50:06,040 --> 00:50:07,800 But not until Tuesday. 708 00:50:08,640 --> 00:50:12,560 Can't the British government make an exception for just a couple of days? 709 00:50:12,560 --> 00:50:15,640 They're under no obligation to do that. 710 00:50:15,640 --> 00:50:18,520 I thought I could get Darling to issue a waiver, but I couldn't. 711 00:50:19,800 --> 00:50:21,720 But... 712 00:50:21,720 --> 00:50:25,560 why can't the Fed just backstop us till the vote? 713 00:50:25,560 --> 00:50:27,320 If it's only two days away... 714 00:50:27,320 --> 00:50:31,640 There is no public money for a backstop. 715 00:50:31,640 --> 00:50:34,120 Have I said that before? 716 00:50:34,120 --> 00:50:38,600 We're at the end. The deal is dead. Now you need to talk to your board. 717 00:51:11,200 --> 00:51:13,680 Harvey, they want you down the Fed. 718 00:51:13,680 --> 00:51:15,720 They want us to file now. 719 00:51:43,480 --> 00:51:48,000 You're asking me to draw up the biggest bankruptcy in history and you want it done by midnight? 720 00:51:48,000 --> 00:51:51,360 I heard you were good at what you do. 721 00:51:51,360 --> 00:51:54,240 A reckless bankruptcy is going to be Armageddon. 722 00:51:54,240 --> 00:51:59,560 We have a program. We have a series of press releases which we firmly believe will calm the markets. 723 00:51:59,560 --> 00:52:01,320 Press releases! 724 00:52:03,240 --> 00:52:07,320 Lehman has assets worth 639 billion! 725 00:52:07,320 --> 00:52:11,000 That's higher than the GDP of almost every country in the world. 726 00:52:11,000 --> 00:52:13,040 I know the arguments against this! 727 00:52:13,040 --> 00:52:17,280 I've been on the phone with Dick for six months trying to get him to sell. 728 00:52:17,280 --> 00:52:20,040 But the price was never high enough for him. 729 00:52:20,040 --> 00:52:23,400 He thought he had all the time in the world. Well, he didn't. 730 00:52:23,400 --> 00:52:28,240 He thought he was playing with the casino's money. Well, he wasn't. 731 00:52:28,240 --> 00:52:31,040 That's enough now! We've got to clean up this mess. 732 00:52:33,160 --> 00:52:34,960 Somebody had to fail. 733 00:52:36,480 --> 00:52:39,200 Lehman Brothers has failed. 734 00:52:44,960 --> 00:52:47,440 LAUGHTER 735 00:52:47,440 --> 00:52:49,480 PHONE RINGS 736 00:52:51,160 --> 00:52:52,200 Yeah? 737 00:52:54,280 --> 00:52:56,320 John, it's Dick. 738 00:52:57,840 --> 00:53:00,200 - 'We should talk.' - About what? 739 00:53:00,200 --> 00:53:04,640 Once upon a time we said we'd have that chat, you and I. 740 00:53:04,640 --> 00:53:07,480 Dick, you're going to file. 741 00:53:07,480 --> 00:53:09,360 We've done some work in that direction 742 00:53:09,360 --> 00:53:13,200 but even this late in the day, with an injection of capital... 743 00:53:16,240 --> 00:53:19,040 Dick, it's really, really over. 744 00:53:21,320 --> 00:53:23,560 'Call me soon. We'll play golf.' 745 00:54:02,760 --> 00:54:04,800 PHONE RINGS 746 00:54:07,640 --> 00:54:09,160 Mr Lewis's phone. 747 00:54:09,160 --> 00:54:11,720 Donna, it's Dick Fuld. 748 00:54:15,080 --> 00:54:17,840 Is Ken...by any chance... 749 00:54:17,840 --> 00:54:20,000 No. He isn't. 750 00:54:20,000 --> 00:54:24,360 Look... I don't think there's any point repeatedly calling the house. 751 00:54:24,360 --> 00:54:26,680 Mr Lewis has your messages. 752 00:54:26,680 --> 00:54:29,760 I'm sure if he wants to call you, he will. 753 00:54:58,600 --> 00:55:00,520 PHONE RINGS 754 00:55:14,680 --> 00:55:17,120 PHONE CONTINUES TO RING 755 00:55:24,760 --> 00:55:29,520 Get up, gentlemen. Take a break, have a celebratory glass. 756 00:55:32,960 --> 00:55:35,000 I suppose now they can get some sleep. 757 00:55:35,000 --> 00:55:39,800 Don't be silly. Due diligence won't be finished until we sign on the line. 758 00:55:39,800 --> 00:55:43,560 - You're a wise man, Mr Lewis. - Not at 29 a share. 759 00:55:43,560 --> 00:55:45,960 My board was quick to point out 760 00:55:45,960 --> 00:55:49,440 that's a 70% premium on your Friday closing price, 761 00:55:49,440 --> 00:55:53,160 and naturally they thought I was losing my marbles. 762 00:55:53,160 --> 00:55:57,520 - Maybe hunches like yours are only for men of genius. - Hmm. 763 00:56:03,960 --> 00:56:11,080 GOSPEL MUSIC: # Take me to the water 764 00:56:11,080 --> 00:56:16,640 # Take me to the water... # 765 00:56:16,640 --> 00:56:19,680 Can you please tell us what's happening? 766 00:56:19,680 --> 00:56:21,960 # Take me to... # 767 00:56:21,960 --> 00:56:26,000 I read somewhere that writing was originally invented to keep track of debt. 768 00:56:26,000 --> 00:56:28,960 If that's how history began, then maybe when we wrote off 769 00:56:28,960 --> 00:56:32,360 this giant mountain of debt, history came to an end. 770 00:56:32,360 --> 00:56:35,560 It was definitely the end of history for some. 771 00:56:36,560 --> 00:56:39,480 National economies collapsed. 772 00:56:42,040 --> 00:56:45,320 Ireland and Italy nearly went bankrupt. 773 00:56:45,320 --> 00:56:47,520 Iceland did. 774 00:56:47,520 --> 00:56:50,800 It was a good thing George Bush legalised sleep deprivation, 775 00:56:50,800 --> 00:56:54,640 because our Chief Financial Officer, who hadn't slept in three days, 776 00:56:54,640 --> 00:56:57,480 had to stay awake to approve the bankruptcy petition. 777 00:57:01,320 --> 00:57:04,160 And it had to be done before midnight. 778 00:57:07,440 --> 00:57:12,040 Everyone before us and everyone after got bailed out. 779 00:57:12,040 --> 00:57:15,520 Four days after the Lehman collapse, Hank Paulson went to Congress 780 00:57:15,520 --> 00:57:19,960 asking for 700 billion in Federal aid. 781 00:57:19,960 --> 00:57:24,320 John Thain and Bank of America parted company in January 2009, 782 00:57:24,320 --> 00:57:27,680 but not before he'd paid out three and a half billion dollars 783 00:57:27,680 --> 00:57:30,360 in bonuses to Merrill Lynch staff. 784 00:57:30,360 --> 00:57:35,400 He was already in the news for spending 1.2 million decorating his office. 785 00:57:35,400 --> 00:57:38,840 He spent over a thousand bucks on a wastebasket. 786 00:57:41,240 --> 00:57:44,880 Some of us expected big changes, a new age. 787 00:57:44,880 --> 00:57:47,880 Some of us are still waiting. 788 00:57:49,240 --> 00:57:51,760 There was a well-known con artist who said, 789 00:57:51,760 --> 00:57:56,200 "The reason some people can be conned is because they want something for nothing. 790 00:57:56,200 --> 00:58:00,080 "Well, I give them nothing for something." 791 00:58:07,280 --> 00:58:09,960 There was something else he said. 792 00:58:09,960 --> 00:58:14,920 People are 99% animal, 1% human. 793 00:58:14,920 --> 00:58:19,040 And it's the human part that causes all the trouble. 794 00:58:21,520 --> 00:58:24,480 Huh, you'd think it would be the other way around. 795 00:58:29,160 --> 00:58:31,800 GOSPEL MUSIC FINISHES 796 00:58:47,680 --> 00:58:51,200 797 00:58:51,200 --> 00:58:54,720