8. “We started marking our clients”: Author interview with Dan Sparks.
Chapter 22: Meltdown
1. Unless otherwise indicated, information about Fabrice Tourre and Goldman’s involvement in the ABACUS transaction as well as on the effect Goldman’s marks had on other Wall Street firms has been taken from the nine-hundred-plus pages released in April 2010 by the U.S. Senate Permanent Subcommittee on Investigations, from e-mails released publicly by Goldman Sachs, and from documents filed in the April 2010 SEC lawsuit against Goldman Sachs and Tourre.
2. “Definitely some people were shocked”: Author interview with Josh Birnbaum. Much of the account of the collapse of Bear Stearns’s two hedge funds in 2007 comes from William D. Cohan, House of Cards (New York: Doubleday & Co., 2009).
3. “Ben shared my concerns”: Henry Paulson Jr., On the Brink (New York: Business Plus, 2010), p. 63.
4. “All these CEOs”: Ibid.
5. “If you had called me”: Author interview with Stan O’Neal.
6. “stunning strategy”: Peter Eavis, “Questions Arise About Goldman’s Blowout Quarter,” Fortune, October 15, 2007.
7. “For more than three months”: NYT, November 19, 2007.
Chapter 23: Goldman Gets Paid
1. “interconnected”: Author interview with Robert Steel.
2. Except where indicated, much of the detail about AIG, AIG Financial Products, and Goldman’s collateral calls on AIG come from William D. Cohan, “Collapse of the House of Hank,” Institutional Investor, April 2010, and from documents released in 2010 and 2011 by the Financial Crisis Inquiry Commission.
3. “They were one hundred percent right”: Author interview with David Viniar.
4. Personal evaluation forms of Josh Birnbaum, Dan Sparks, Mike Swenson, and Fabrice Tourre were found in documents released in April 2010 by the U.S. Senate Permanent Subcommittee on Investigations.
5. “The structured-products traders”: WSJ, December 14, 2007.
6. “The good thing we did”: Author interview with Dan Sparks.
7. SEC interviews Sparks: WSJ, May 15, 2010.
8. “I guess it depends”: Author interview with Josh Birnbaum.
Chapter 24: God’s Work
1. “Our history of good performance”: WSJ, January 11, 2011.
2. “I think there are a lot of things”: Author interview with Lloyd Blankfein.
3. “The first thing you need to know”: Matt Taibbi, Rolling Stone, July 9–23, 2009.
4. “That Rolling Stone article”: Author interview with Lloyd Blankfein.
5. “This is not an unalloyed”: John Gapper, Financial Times, December 24, 2009.
6. “If Lloyd had a twin brother”: Warren Buffet, speech at the 2010 Berkshire Hathaway annual meeting, as reported by Reuters, May 1, 2010.
7. “we never had any”: Financial Times, April 22, 2010.
8. “Goldman became”: Author interview with Steve Schwarzman.
9. “Front-running is illegal”: Author interview with Eliot Spitzer.
10. “to embrace conflicts”: NYT, May 19, 2010.
11. “My take on the whole firm”: Author interview with Sandy Lewis.
12. “In a crisis”: Author interview with Lloyd Blankfein.
13. “I think the big challenge”: Author interview with Clayton Rose.
14. “The fundamental problem”: Author interview with Charles Elson.
15. “You settle with the SEC”: Author interview with Jim Cramer.
16. “at least ironic”: Author interview with Lloyd Blankfein.
INDEX
ABACUS 2006 HGS1
ABACUS 2007–AC1—83, prl.1, prl.2, 20.1, 20.2, 20.3, 20.4, 21.1, 22.1, 23.1
Abanto, J. Nelson
ABC
ABN AMRO, prl.1, prl.2, 21.1, 22.1
Abraham, Kathy, 12.1, 12.2
ABX.HE, 18.1, 19.1, 19.2, 19.3, 19.4, 20.1, 20.2, 20.3, 20.4, 20.5, 20.6, 20.7, 21.1, 21.2, 22.1, 22.2, 22.3
ACA Capital Holdings, Inc., prl.1, prl.2, prl.3
ACA Management, LLC, prl.1, 20.1, 20.2, 20.3, 20.4, 21.1, 21.2, 21.3, 22.1
Accredited Home Lenders, Inc.
ACLI
acquisitions, see mergers and acquisitions
Adams, Sherman
Adelphia Pharmaceutical Manufacturing Company
adjustable-rate mortgage
Afghanistan
Agee, William
AIG, 16.1, 16.2, 16.3, 22.1, 23.1, 24.1
CDSs sold by
financial troubles of, prl.1, prl.2, prl.3, 16.1, 18.1, 23.1
Goldman Sach’s squeeze on, prl.1, prl.2, 23.1
government rescue of, prl.1, 23.1, 24.1
AIG Financial Products
Aitschel, Arthur
Akamatsu, Shigeru
Akron, Ohio
Albany, N.Y.
Alcan Aluminum
Alexander & Baldwin
Alex. Brown Inc.
Alger, Horatio, 3.1, 3.2
Alien Property Custodian
Aliredha, Yusuf
Allan, John H., 7.1, 7.2
Allegheny Corporation, 5.1, 5.2
Allied Corporation
Allison, Herbert, 16.1, 16.2
Alt-A mortgages, 18.1, 21.1
Alter, Jonathan
Alterna-Track
Altman, Roger, 13.1, 13.2, 13.3, 13.4
Alton Box Board Company
Altschul, Arthur
Amazon
Amelia Island conference
American Cyanamid Corporation
American Express, 7.1, 7.2, 9.1
American Stock Exchange, 5.1, 17.1
Amoco, 14.1, 17.1
Amstutz, Dan
Anderson, Jenny
Anderson Mezzanine Funding, 21.1, 21.2
Annenberg Building
anti-Semitism, 3.1, 14.1
in Europe
of Henry Ford, 4.1, 4.2
see also Jews
Aoki
Apple Hill Farm
Araskog, Rand
arbitrage:
derivatives and
event driven
by Goldman Sachs, 5.1, 5.2, 5.3, 5.4, 6.1, 6.2, 6.3, 6.4, 7.1, 7.2, 7.3, 9.1, 9.2, 10.1, 11.1, 11.2, 12.1, 14.1, 15.1, 18.1
merger, 5.1, 5.2, 9.1
of Phillips Petroleum
risk, 5.1, 6.1
secret Kidder Peabody department of
and Trading Corporation
Archer Daniels Midland
Archipelago Holdings, 17.1, 24.1
Archon Mortgage LLC
Argentina, 2.1, 9.1
Argent Mortgage Company
Arkin, Stanley
Arning, Lee
Aron, Jacob
Arrow, Kenneth
Arthur D. Little & Co.
AT&T, 2.1, 4.1, 5.1, 5.2, 8.1
Athan, Thomas
Atlantic Monthly, 2.1, 3.1
Atlas Corporation
auto-loan receivables, 18.1, 18.2
Automatic Data Processing
Aranessians, Armen
Aykroyd, Dan
Bache Halsey Stuart Shields
“back-office crisis”
Baer family
Baker, James
Ballantine, Arthur
Ballantine, Dewey
Ball family
Baltimore American Insurance Company
BankAmerica Corp.
Bank Clerks’ League
Bank One, 14.1, 14.2
Bankers Trust Company, 3.1, 16.1
Bank Holding Company Act (1956)
banking, underwriting vs.
Bank of America
Merrill Lynch purchased by, prl.1, prl.2
Bank of England, 1.1, 14.1
Bank of New York
Banque Nationale de Paris (BNP)
Barclays de Zoete Wedd
Barkley, Albert
Barofsky, Neil
Barron’s, 13.1
Baruc, Edgar, 5.1, 5.2, 5.3, 5.4
Baruch, Bernard, 3.1, 5.1
<
br /> Bash-Polley, Stacy
Basis Yield Alpha Fund, prl.1, prl.2, 23.1
Bass, Kyle
B.A.T. Industries
Bear, Dicky, 5.1, 5.2
Bear Stearns, prl.1, prl.2, 7.1, 16.1, 19.1, 20.1, 20.2, 22.1
capital of
collapse of, prl.1, 22.1, 22.2
Cy Lewis at
demise of, prl.1, prl.2, prl.3, prl.4
fixed-income group of
government rescue of, prl.1, 22.1, 23.1
hedge funds of, prl.1, prl.2, 2.1, 20.1, 21.1, 21.2, 22.1, 22.2, 22.3, 22.4, 22.5, 23.1
IPO of
LTCM deal and
mortgage-backed securities of, 18.1, 21.1, 21.2, 22.1, 22.2
private-equity fund of
Bear Stearns Asset Management (BSAM), 21.1, 21.2, 22.1, 22.2
Bear Stearns Merchant Banking
Bear Stearns Residential Mortgage Corporation
Beatrice Foods, 11.1, 11.2, 11.3, 11.4, 11.5, 11.6, 15.1
Becerra, Lawrence
Becton, Dickinson
Bell, Lord Timothy
Bendix
Bentsen, Lloyd, 13.1, 15.1
Berkshire Hathaway, 2.1, 16.1, 16.2, 18.1, 23.1
Bernanke, Ben, prl.1, 20.1, 21.1, 21.2, 22.1, 23.1
Bernanke Doctrine
Bernard, Lewis
Bernice Pauahi Bishop, Princess of Hawaii
Bernstein, Sandy
Bethlehem Steel
Bevan, David C., 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7
B. F. Goodrich Company, 1.1, 3.1, 4.1, 4.2, 7.1
Bhavsar, Avanish
Bieber, Matthew
“big short,” prl.1, prl.2, prl.3, prl.4, prl.5, prl.6, 19.1, 19.2, 19.3, 20.1, 21.1, 21.2, 21.3, 21.4, 21.5, 21.6, 22.1, 22.2, 22.3, 23.1, 23.2
Big Short, The (Lewis), 21.1, 22.1
Birmingham, Stephen, 1.1, 1.2, 1.3, 1.4, 1.5, 1.6, 1.7, 1.8, 1.9, 1.10
Birnbaum, Josh, 18.1, 18.2, 18.3, 18.4, 20.1, 22.1, 22.2, 23.1, 23.2
“big short” of, prl.1, prl.2, 19.1, 19.2, 19.3, 19.4, 19.5, 19.6, 19.7, 20.1, 20.2, 20.3, 20.4, 20.5, 21.1, 21.2, 21.3, 21.4, 21.5, 22.1, 22.2, 22.3, 22.4, 23.1, 23.2
Bishop Estate, 12.1, 14.1, 15.1, 15.2, 16.1, 16.2, 17.1
Black, Fisher
Black Panthers
Blackstone Group, 22.1, 24.1
Blair & Co.
Blankfein, Laura Jacobs
Blankfein, Lloyd, 1.1, 2.1, 3.1, 9.1, 16.1, 16.2, 17.1, 17.2, 17.3, 17.4, 17.5, 19.1, 20.1, 21.1, 21.2, 22.1, 22.2, 22.3, 22.4, 22.5, 23.1, 24.1, 24.2, 24.3, 24.4, 24.5, 24.6
apartment of
appearance and tics of, prl.1, prl.2
background of
“big short” denied by, prl.1
compensation received by, prl.1, prl.2
on conflict management
ignorance of public mood, prl.1, prl.2
as law school graduate
made manager of traders
made partner
made president
made vice chairman
on “mark-to-market”
Obama’s criticism of, prl.1, prl.2
personality of, prl.1
Senate testimony of, prl.1, prl.2, prl.3
on strategic planning committee
TARP funds not desired by, prl.1, prl.2
“two-percent probabilities” remark of
Blankfein, Seymour
block trading, 5.1, 5.2, 5.3, 6.1, 6.2, 7.1, 7.2, 8.1
of mortgage-backed securities
Bloomberg
Blue Ridge Corporation
blue sheets
Blyth & Co.
B’nai B’rith Foundation
BNP Paribas
Board of National Defense
boards of directors, 3.1, 6.1, 7.1
Boeschenstein, Harold
Boesky, Ivan, 11.1, 11.2, 11.3, 11.4, 11.5, 11.6
Bohra, V. Bunty
Boisi, Geoffrey, 9.1, 9.2, 10.1, 10.2, 12.1, 12.2, 17.1
Bolten, Joshua, 14.1, 14.2, 17.1, 24.1
Bond Club
bonds
AT&T
Eurobond
Ford
foreign exchange trading and
government, 7.1, 10.1, 13.1, 14.1, 14.2, 14.3, 14.4, 15.1, 18.1, 23.1
high-grade corporate
high-yield (junk), 2.1, 10.1, 10.2, 12.1, 15.1
Liberty
municipal, prl.1, 14.1
railroad, 5.1, 5.2
utility, 5.1, 5.2
Whitehead’s work on
bonuses, 3.1, 7.1, 7.2
Booth Newspaper, Inc.
Booz Allen
Boston, Mass., 3.1, 4.1
Boukhtouche, Fatiha
Bouton, Daniel
Bowers, Henry S., 1.1, 3.1, 4.1, 4.2
Bowne Business College
Bradfield, Michael
Bradley, Bill
Branson, Richard
Brattleboro
Brazil
Brazil, Alan
bridge loans
Briger, Peter
British Petroleum, 12.1, 12.2
British Printing Corporation
Broderick, Craig, prl.1, 21.1, 22.1, 22.2, 22.3
Senate testimony of
Brody, Kenneth, 12.1, 12.2, 13.1
Broeckel, Janet
Brook
Brookings Institution, 17.1, 17.2
Brosens, Frank, 11.1, 11.2, 12.1, 15.1, 17.1
Brown, David S.
Browne, John, 17.1, 17.2
Brownell, Herbert
Brown Shoe Company, 4.1, 4.2
Bryan, John
Buchanan, George
Buffalo, N.Y.
Buffett, Warren, 2.1, 2.2, 16.1, 18.1, 23.1, 24.1
on derivatives
Goldman Sachs given loan by, prl.1, prl.2
LTCM investment of, 16.1, 16.2
Bunds
Burgess, Mary
Burnham, Tubby
Bush, George H. W., 13.1, 14.1
Bush, George W., 14.1, 17.1, 17.2, 24.1
BusinessWeek, 18.1
Business World, 11.1
Butcher, Howard, III
Buzan, Anthony
Byrne, Brendan
Byron, Christopher
Cabot, Paul C., 2.1, 3.1, 3.2, 3.3
Cahouet, Frank
Callahan, Jim
Calyon
Cantor, Eddie, 2.1, 3.1
Capetown
Capital Institute
capitalism, 1.1, 1.2, 3.1
Capitalism: A Love Story, 24.1
Capital One Financial
Cargill
Carnegie, Andrew
Carnegie Foundation
Carr, Michael
Carter, Jimmy, 13.1, 13.2, 14.1
Cartusciello, Neil
Casey, William J.
Cassano, Joseph, 23.1, 23.2, 23.3, 23.4, 23.5, 23.6
Catcher in the Rye, The (Salinger), 17.1
Catchings, Nora Belle Waddill
Catchings, Silas Fly
Catchings, Waddill, 3.1, 3.2, 4.1, 6.1, 8.1
background of
Blue Ridge constructed and sold by, 2.1, 2.2
on board of Merck
companies created by
debt-financing scheme of
divorce of, 2.1, 2.2
economic theories of
Goldman Sachs partnership canceled, 2.1, 3.1, 3.2, 3.3, 14.1
investment trust created by, 2.1, 2.2, 3.1, 4.1
made partner of Goldman Sachs, 1.1, 2.1
power grab by
Shenandoah constructed and sold by
at Sullivan & Cromwell
Caterpillar
Cayne, James E., 16.1, 16.2
CDS IndexCo LLC
Celler, Emanuel
Central Foundry Company
Century Country Club
Cerberus
Chafee, John
Challenger space shuttle
Chamber of Commerce, U.S., 1.1, 2.1
Chang, Victor
/>
Charles M. Schott & Co.
Charles Schwab
Chase Bank, 3.1, 16.1
Chase National Bank
Chen-Oster, H. Cristina
Chicago, Ill., 3.1, 4.1
Chicago Board Options Exchange (CBOE)
China, 14.1, 14.2, 16.1, 17.1
Cholnoky, Thomas
Christian Science Monitor, 5.1
Christopher, Warren
CIA
CIGNA
Cioffi, Ralph, 20.1, 21.1, 22.1, 22.2, 22.3, 22.4, 22.5, 22.6
CIT Financial, 1.1, 4.1, 22.1
Citibank, 14.1, 16.1
Citigroup, prl.1, 10.1, 13.1, 16.1, 17.1, 17.2, 17.3, 18.1
Citizens for Eisenhower-Nixon
Civil Air Patrol
Clark, Harold B., 4.1, 4.2
Clay, Lucius D., 3.1, 3.2
Clayton, Dubilier & Rice
Cleary Gottlieb, 6.1, 6.2
Clemenceau, George
Clikeman, Paul
Clinton, Bill, 7.1, 10.1, 13.1, 14.1, 14.2
Cluett, Peabody
CNBC
Coakley, Martha
Coburn, Tom
Cofield, James E., Jr.
Cohen, Harold, 5.1, 5.2
Cohen, Jonathan
Cohen, Laurie, 11.1, 15.1
Cohen, Roger
Cohn, Gary, prl.1, 15.1, 15.2, 17.1, 19.1, 19.2, 19.3, 20.1, 20.2, 21.1, 21.2, 21.3, 21.4, 22.1, 22.2, 22.3, 22.4, 22.5, 22.6, 22.7, 23.1, 24.1, 24.2
Cole, Christopher
Coles, Michael
collateralized debt obligations (CDOs), prl.1, prl.2, prl.3, 19.1, 19.2, 19.3, 19.4, 20.1, 20.2, 20.3, 20.4, 21.1, 21.2, 21.3, 21.4, 21.5, 21.6, 21.7, 21.8, 22.1, 22.2, 22.3, 22.4, 22.5, 22.6, 22.7, 22.8, 23.1, 23.2
complexity of, prl.1, prl.2, 19.1
market volatility caused by
synthetic, prl.1, prl.2, prl.3, prl.4, prl.5, 20.1, 20.2, 20.3, 20.4, 21.1, 21.2, 22.1, 23.1, 23.2, 24.1
tranches of, 19.1, 23.1
collateralized debt obligations (CDOs) squared, prl.1, 21.1, 21.2
collateralized mortgage obligations (CMOs), 18.1, 18.2
Collins, Timothy
Commerce Department, U.S.
Commercial Bank
commercial banks, prevented from intermingling with investment banks, 2.1, 4.1, 10.1
Commercial Investment Trust
commercial paper, 1.1, 1.2, 1.3, 1.4, 1.5, 1.6, 5.1, 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.10, 7.11, 7.12, 9.1
see also IOUs
Commodities Corporation
commodities trading, 1.1, 1.2, 6.1, 9.1, 9.2, 12.1, 14.1, 16.1
see also specific trades
Commodity Futures Trading Commission, prl.1, 17.1
Commodore Hotel
“Compliance and Reputational Judgment” training
COMSAT
Congress, U.S.
Joint Economic Committee of
see also House of Representatives, U.S. Senate, U.S.;
Connally, John
Connecticut General Corp
Money and Power Page 90
