by Nomi Prins
26 Jody Shenn, “CDO Market Is Almost Frozen, JPMorgan, Merrill Say (Update 2),” Bloomberg, February 5, 2008, http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aCk0Qr1f2Eew.
27 Kathy Krawczyk and Lorraine Wright, “Dividends and Capital Gains Planning after the 2003 Tax Act,” The CPA Journal Online, October 2004, http://www.nysscpa.org/cpajournal/2004/1004/essentials/p36.htm.
28 Niall Ferguson, “Wall Street Lays Another Egg,” Vanity Fair, December 2008, http://www.vanityfair.com/politics/features/2008/12/banks200812.
29 Hedge Fund Research, Inc., Hedge Fund Inflows Set Another Record in 2007, January 15, 2008, http://www.hedgefundresearch.com/pdf/pr_20080115.pdf.
30 Alistair Barr, “Hedge Fund Launches Decline in 2006, HFR Says,” MarketWatch, March 29, 2007, http://www.marketwatch.com/news/story/hedge-fund-launches-liquidationsdrop/story.aspx?guid={00FA3A7D-F81C-40D4-855A-B0F9745D005B}.
31 Nomi Prins and Krisztina Ugrin, “Bailout Tally,” June 2009, http://www.nomiprins.com/bailout.html.
32 Fred Lucas, “Value of 2008 Bailouts Exceeds Combined Costs of All Major U.S. Wars,” CNSNews, December 18, 2008, http://www.cnsnews.com/public/content/article.aspx?RsrcID=40964.
33 The White House, Press Office: Remarks of Lawrence H. Summers, Director of the National Economic Council, at Brookings Institution, Washington, D.C., March 13, 2009, http://www.whitehouse.gov/the_press_office/Remarks-of-Lawrence-Summers-Director-of-the-National-Economic-Council-at-the-Brook/.
34 Nancy Trejos and Brenna Maloney, “401(k)s, Retirement Savings and the Financial Crisis,” Washington Post, December 6, 2008, http://www.washingtonpost.com/wp-dyn/content/graphic/2008/12/06/GR2008120600089.html.
35 United States Department of Labor, Bureau of Labor Statistics, “Employment Situation News Release,” June 2, 2009, http://www.bls.gov/news.release/empsit.nr0.htm.
36 Bill Dedman, “U.S. Banks Suffer 149 Percent Rise in Bad Loans,” MSNBC, March 17, 2009, http://www.msnbc.msn.com/id/29619163.
Chapter 1. Where’d the Bailout Money Go, Exactly?
1 About the White House: Presidents, “Biography of George W. Bush,” The White House, http://www.whitehouse.gov/about/presidents/georgewbush.
2 United States Department of the Treasury, History of the Treasury: Secretaries of the Treasury, “Paul H. O’Neill (2001-2002),” http://www.ustreas.gov/education/history/secretaries/poneill.shtml.
3 United States Department of the Treasury, History of the Treasury: Secretaries of the Treasury, “John Snow,” http://www.ustreas.gov/education/history/secretaries/jsnow.shtml.
4 United States Department of the Treasury, “Testimony of Treasury Secretary Paul O’Neill before the Senate Finance Committee,” press release, February 5, 2002, http://www.treas.gov/press/releases/po981.htm.
5 United States Department of the Treasury, History of the Treasury: Secretaries of the Treasury, “John Snow,” http://www.ustreas.gov/education/history/secretaries/jsnow.shtml.
6 United States Department of the Treasury, “The Honorable John W. Snow Prepared Remarks: The Financial Services Roundtable Scottsdale, Arizona,” press release, April 2, 2004, http://www.treas.gov/press/releases/js1289.htm.
7 United States Department of the Treasury, “Remarks by Treasury Secretary John Snow to the American Tort Reform Association’s Annual Membership Meeting,” press release, March 16, 2004, http://www.treas.gov/press/releases/js1237.htm.
8 United States Senate Committee on Finance, Opening Statement of Henry M. Paulson before the Senate Finance Committee, 109th Cong., 2nd sess., 2006.
9 “Presidential Cabinet Nominations,” United States Senate, December 2, 2008, http://www.senate.gov/reference/resources/pdf/cabinettable.pdf.
10 William L. Watts, “Senate Confirms Paulson as Treasury Secretary,” Marketwatch, June 28, 2006, http://www.marketwatch.com/news/story/senate-confirmspaulson-treasury-secretary/story.aspx?guid=%7B5801D6FE-295A-4326-894B-ACB0454619C5%7D.
11 United States Department of the Treasury, History of the Treasury: Secretaries of the Treasury, “Henry M. Paulson, Jr.,” http://www.ustreas.gov/education/history/secretaries/hmpaulson.shtml.
12 “FACTBOX—Goldman Sachs Alumni in the News,” Reuters, November 15, 2007, http://www.reuters.com/article/bondsNews/idUSN1555573420071115.
13 News Room: Leadership, “Henry M. Paulson, Jr.,” The Nature Conservancy, http://www.nature.org/pressroom/leadership/art11950.html; Paul Krugman, comment on “Nixonland,” The Conscience of a Liberal, comment posted October 15, 2008, http://krugman.blogs.nytimes.com/2008/10/15/nixonland.
14 James Doran, “The Secret Hammer of Wall Street,” The Observer (UK), August 16, 2007.
15 Landon Thomas Jr., “Paulson Comes Full Circle,” New York Times, May 31, 2006.
16 United States Department of the Treasury, History of the Treasury: Secretaries of the Treasury, “Henry M. Paulson, Jr.,” www.ustreas.gov/education/history/secretaries/hmpaulson.shtml.
17 Jim Rutenberg and Edmund L. Andrews, “Bush Selects Goldman Chief to Take Over Treasury Dept.,” New York Times, May 30, 2006.
18 United States Department of the Treasury, “United States Treasury Secretary John W. Snow Remarks to the Detroit Economic Club,” press release, February 13, 2003, http://www.treas.gov/press/releases/js31.html.
19 “Tax-Cut Bill Wins Final Passage,” CNN Politics, May 12, 2006, http://www.cnn.com/2006/POLITICS/05/11/tax.cuts/index.html.
20 Mark A. Stein, “Openers: Suits; True Believer,” New York Times, June 4, 2006.
21 United States Internal Revenue Code, § 1043.
22 Jessica Holzer, “A Loophole for Poor Mr. Paulson,” Forbes, June 2, 2006, http://www.forbes.com/2006/06/01/paulson-tax-loophole-cx_jh_0602paultax.html.
23 “Goldman Sachs (GS) Registers to Sell 3.23 Million Shares for Shareholder Henry Paulson,” Streetinsider.com, June 29, 2006. http://www.streetinsider.com/Equity+Offerings/Goldman+Sachs+(GS)+Registers+to+Sell+3.23+Million+Shares+for+Shareholder+Henry+Paulson+ +DJ/1000819.html; Rebecca Christie and Matthew Benjamin, “Paulson Risks Goldman Standard as Fannie, Freddie Shares Erode,” Bloomberg, August 21, 2008, http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=a8w9MI4Btco4.
24 Holzer, “A Loophole for Poor Mr. Paulson.”
25 Nomi Prins, Jacked: How “Conservatives” Are Picking Your Pocket (Sausalito, CA: PoliPointPress, 2006).
26 United States Department of the Treasury, “Remarks by Secretary Henry M. Paulson at Roundtable Discussion on State of U.S. Economy,” press release, January 29, 2007, http://www.treas.gov/press/releases/hp240.htm.
27 “Press Release,” Board of Governors of the Federal Reserve System press release, August 17, 2007, http://www.federalreserve.gov/newsevents/press/monetary/20070817a.htm.
28 Henry Paulson, interviewed by Steve Liesman, Squawk on the Street, CNBC, August 21, 2007.
29 Damian Paletta, Susanne Craig, and Deborah Solomon, “New York Fed Holds Emergency Meeting on Lehman’s Future,” Wall Street Journal, September 13, 2008.
30 William Cohan, “Paulson Tells Lehman Where to Go,” CNN Money, December 15, 2008, http://money.cnn.com/2008/12/12/magazines/fortune/3days_8.fortune/index.htm.
31 Barclays, “Barclays Announces Agreement to Acquire Lehman Brothers North American Investment Banking and Capital Markets Businesses,” press release, September 17, 2008, http://www.newsroom.barclays.com/content/Detail.aspx?ReleaseID=1435&NewsAreaID=2.
32 David Teather, Andrew Clark, and Jill Treanon, “Barclays Agrees $1.75bn Deal for Core Lehman Brothers Business,” The Guardian, September 17, 2008, http://www.guardian.co.uk/business/2008/sep/17/barclay.lehmanbrothers1.
33 Greg Farrell and Henny Sender, “The Shaming of John Thain,” Financial Times, March 13, 2009.
34 Greg Farrell and Henny Sender, “Lynched at Merrill,” Financial Times, January 26, 2009.
35 Matthew Karnitschnig, Carrick Mollenkamp, and Dan Fitzpatrick, “Bank of America to Buy Merrill,” Wall Street Journal, September 15, 2008.
3
6 Andrew M. Cuomo letter to Christopher J. Dodd, Barney Frank, Mary L. Schapiro, and Elizabeth Warren, “Re: Bank of America-Merrill Lynch Merger Investigation,” April 23, 2009.
37 State of New York Office of the Attorney General, “Executive Compensation Investigation: Bank of America-Merrill Lynch,” February 26, 2009.
38 Kenneth D. Lewis, e mail to Bank of America Board of Directors, December 22, 2008.
39 Scott Garret et al., Letter to President Obama, July 10, 2009.
40 U.S. Department of the Treasury, Capital Purchase Program Transaction Report, October 29, 2008, 4:30 P.M.
41 “Mugging Bank of America,” Wall Street Journal, January 17, 2009, http://online.wsj.com/article/SB123215299934192217.html.
42 Andrew M. Cuomo letter to Christopher J. Dodd, Barney Frank, Mary L. Schapiro, and Elizabeth Warren, “Re: Bank of America-Merrill Lynch Merger Investigation,” April 23, 2009.
43 United States Department of the Treasury, “Treasury, Federal Reserve and the FDIC Provide Assistance to Bank of America,” press release, January 16, 2009, http://www.ustreas.gov/press/releases/hp1356.htm.
44 Bank of America, “Chairman’s Letter,” Bank of America: 2008 Annual Report, March 2009.
45 Bank of America, “Bank of America Announces Results from Annual Meeting,” press release, April 29, 2009, http://newsroom.bankofamerica.com/index.php?s=43&item=8443.
46 Dan Fitzpatrick and Marshall Eckblad, “Lewis Ousted as BofA Chairman,” Wall Street Journal, April 30, 2009.
47 Pallavi Gogoi, “Thain Resigns from Bank of America after News of Bonuses,” USA Today, January 22, 2009, http://www.usatoday.com/money/industries/banking/2009-01-22-thain-leaving_N.htm.
48 Susanne Craig, “Thain Spars with Board Over Bonus at Merrill,” Wall Street Journal, December 8, 2008.
49 Grant McCool, “NYAG Cuomo Warns Nine Banks about Bonus Payments,” Reuters, October 29, 2008, http://www.reuters.com/article/ousiv/idU.S.TRE49S85720081029.
50 Merrill Lynch, “Merrill Lynch Statement on 2008 Executive Compensation,” press release, December 8, 2008, http://www.ml.com/index.asp?id=7695_7696_8149_88278_113419_113455.
51 Andrew M. Cuomo, Letter to Barney Frank, “Re: Merrill Lynch 2008 Bonuses,” February 10, 2009.
52 Karen Freifeld and David Mildenberg, “Cuomo Subpoenas Thain and Alphin Over Merrill Bonuses,” Bloomberg, January 27, 2009, http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aOcAC1TFziWo.
53 Andrew M. Cuomo letter to Barney Frank, “Re: Merrill Lynch 2008 Bonuses,” February 10, 2009; Pallavi Gogoi, “Thain Resigns from Bank of America after News of Bonuses,” USA Today, January 22, 2009.
54 Andrew M. Cuomo letter to Barney Frank, “Re: Merrill Lynch 2008 Bonuses.”
55 Gretchen Morgenson, “Behind Insurer’s Crisis, Blind Eye to a Web of Risk,” New York Times, September 27, 2008, http://www.nytimes.com/2008/09/28/business/28melt.html.
56 Nomi Prins and Krisztina Ugrin, “Bailout Tally,” June 2009, http://www.nomiprins.com/bailout.html.
57 John Crudele, “Who’s the Fed Chairman Talking with Now?” New York Post, October 25, 2007.
58 United States Department of the Treasury, “Statement by Secretary Henry M. Paulson, Jr. on Comprehensive Approach to Market Developments,” press release, September 19, 2008, http://www.treasury.gov/press/releases/hp1149.htm.
59 “Paulson Wants a Speedy Debt Deal,” BBC News, September 21, 2008, http://news.bbc.co.uk/2/hi/business/7628144.stm.
60 “Treasury’s Financial-Bailout Proposal to Congress,” Wall Street Journal Blogs, September 20, 2008, http://blogs.wsj.com/economics/2008/09/20/treasurys-financial-bailout-proposal-to-congress.
61 Frank Ahrens, “ ‘08: Our Date with Disaster,” Washington Post, January 1, 2009.
62 United States Department of the Treasury, “Testimony by Secretary Henry M. Paulson, Jr. before the House Committee on Financial Services Hearing on Turmoil in the U.S. Credit Markets: Recent Actions Regarding Government Sponsored Entities, Investment Banks and other Financial Institutions,” press release, September 24, 2008, http://www.treas.gov/press/releases/hp1154.htm.
63 United States Senate Committee on Banking, Housing, and Urban Affairs, Turmoil in U.S. Credit Markets: Recent Actions Regarding Government Sponsored Entities, Investment Banks, and Other Financial Institutions, 110th Cong., 2nd sess., 2008, 112-113.
64 United States Department of the Treasury, “FACT SHEET: Proposed Treasury Authority to Purchase Troubled Assets,” press release, September 20, 2008, http://www.treas.gov/press/releases/hp1150.htm.
65 Elinor Stebbins, “Pallas Athena, Goddess of Wisdom,” Images of Women in the Ancient World: Issues of Interpretation and Identity (Spring 1998), http://www.arthistory.sbc.edu/imageswomen/papers/stebbinsathena/athena2.html.
66 Naomi Klein, e mail message to the author, March 1, 2009.
67 Carl Hulse and David M. Herszenhorn, “House Rejects Bailout Package, 228-205; Stocks Plunge,” New York Times, September 29, 2008; Vikas Bajaj and Michael M. Grynbaum, “For Stocks, Worst Single Day Drop in Two Decades,” New York Times, September 29, 2008.
68 Carl Hulse, “Pressure Builds on House after Senate Backs Bailout,” New York Times, October 1, 2008.
69 Lori Montgomery and Shailagh Murray, “Senate Approves Bailout,” Washington Post, October 2, 2008.
70 Center for Responsive Politics, “Mortgage Bankers and Brokers: Top Recipients, 2008,” Opensecrets.org, http://www.opensecrets.org/industries/recips.php?cycle=2008&ind=F4600.
71 David M. Herszenhorn, “Bailout Plan Wins Approval; Democrats Vow Tighter Rules,” New York Times, October 3, 2008.
72 Jeanne Sahadi, “Bailout Is Law,” CNN Money, October 4, 2008, http://money.cnn.com/2008/10/03/news/economy/house_friday_bailout/index.htm?postversion=2008 100309.
73 United States Department of the Treasury, “Paulson Statement on Emergency Economic Stabilization Act,” press release, October 3, 2008, http://www.ustreas.gov/press/releases/hp1175.htm.
74 United States Department of the Treasury, “Kashkari Appointed Interim Assistant Secretary for Financial Stability,” press release, October 6, 2008, http://www.ustreas.gov/press/releases/hp1184.htm.
75 Edmund L. Andrews and Mark Lander, “White House Overhauling Rescue Plan,” New York Times, October 12, 2008.
76 Investopedia, “Preferred Stock,” Forbes Digital, http://www.investopedia.com/terms/p/preferredstock.asp.
77 United States Department of the Treasury, “Treasury Announces TARP Capital Purchase Program Description,” press release, October 14, 2008, http://www.treas.gov/press/releases/hp1207.htm.
78 Patrick J. Kennedy, “Amends the Financial Services Regulatory Relief Act of 2006,” March 9, 2007, Library of Congress, http://thomas.loc.gov/cgi-bin/bdquery/z?d110:HR01424:@@@D&summ2=m&.
79 Greg Ip, comment on “Fed Paying Interest on Reserves: An Old Idea with a New Urgency,” Wall Street Journal Blogs, comment posted April 29, 2008, http://blogs.wsj.com/economics/2008/04/29/fed-paying-interest-on-reserves-an-old-idea-with-anew-urgency.
80 Board of Governors of the Federal Reserve System, press release, October 6, 2008, http://www.federalreserve.gov/newsevents/press/monetary/20081006a.htm. Also see Financial Services Regulatory Relief Act of 2006, § 201.
81 Matthew Quinn, “Bernanke Admits Fed Struggling to Revive Private Lending,” Financial Week, January 13, 2009.
82 Federal Reserve, Federal Reserve Statistical Release H3, April 30, 2009.
83 Julie Haviv, “U.S. Mortgage Applications Jump; Rates at Record Low,” Reuters, March 25, 2009, http://www.reuters.com/article/marketsNews/idUSNYS00494520090325.
84 “Progress amid the Ruins,” Wall Street Journal, October 9, 2008.
85 United States Department of the Treasury, “Statement by Secretary Henry M. Paulson, Jr. Following Meeting of the G7 Finance Ministers and Central Bank Governors,” press release, October 10, 2008, http://www.ustreas.gov/press/releases/hp1194.htm.
86 David Enrich, “Lending Drops at Big U.S
. Banks,” Wall Street Journal, January 26, 2009.
87 Joseph N. Distefano, comment on “JPMorgan’s Dimon: ‘We’re Not Relying’ on U.S. Bank Bailouts,” PhillyDeals, comment posted September 26, 2008, http://www.philly.com/philly/blogs/inq-phillydeals/JPMorgans_Dimon_Were_not_relying_on_.html.
88 Andrew Ross Sorkin, ed., comment on “Dimon on the Government’s Bailout Moves,” Dealbook, comment posted October 15, 2008, http://dealbook.blogs.nytimes.com/2008/10/15/dimon-on-the-governments-bailout-moves.
