Too Big to Fail (2011) - full transcript

We have no intention
of dismantling

the regulatory agencies.

However, we must
come to grips with

inefficient and
burdensome regulations.

We will eliminate those that are
unproductive and unnecessary.

Tearing down these
antiquated walls and

granting banks significant
new authority.

In a victory for the
banking industry,

Congress has approved legislation

which will allow commercial
and investment banks

to merge and form institutions of



unprecedented size
and global reach.

I think it's very
important for us not to

introduce regulation
for regulation's sake.

I do believe in the
American dream.

Owning a home is a
part of that dream.

We are taking action to
bring many thousands

of Americans closer
to owning a home.

This project not only is good
for the soul of the country,

it's good for the pocketbook
of the country as well.

The housing market has
reached frantic proportions.

It seems that everybody is
building, buying or selling.

The Dow and the S&P
both breaking records.

Profits soared 93% at
Goldman Sachs this year.

Hotshot traders and bankers can
expect to take home 10, 25,



and in some cases, $50 million.

Things that are too
good to be true, are.

When you see something coming...

The real estate bubble...

- Housing bubble...
- Bubble...

don't put it off.

Take action immediately.

Will there be a soft landing,
or will the bubble burst?

The new story, the
mortgage meltdown.

This morning in the mortgage
meltdown, new numbers showing

that a record number of Americans
are losing their homes.

More than 70 mortgage
companies have

failed in the last few
months in America,

and now the biggest
of the big companies,

the Bear Stearns, the big banks,

are caught holding the bag.

The fifth largest investment bank
in the country, Bear Stearns,

is being sold for just
$2 a share to JP Morgan.

It's being assisted
by the government,

which is stepping in to guarantee

some $30 billion in Bear's
toxic real estate assets.

You've got to imagine
that Hank Paulson

didn't think he signed up for this

when President Bush picked him
to become Treasury Secretary.

Hank Paulson may now have to undo
some of the deregulation measures

that he and his peers
on Wall Street

pushed through when
he ran Goldman.

Treasury Secretary Hank Paulson
telling Matt Lauer this morning,

We're all over it. I've got great
confidence in our markets.

They're resilient.
They're flexible.

Ali, the truth is
that Bear Stearns is

only a very small
fraction of this story.

Our economy could face far
worse than a recession.

In the wake of Bear's collapse,
Lehman Brothers is scrambling

to reassure investors
about the impact of

the mortgage crisis
on its own assets.

Insurers of the firm under a great
deal of pressure this morning.

Dick Fuld, a 39-year
veteran of Lehman

and the longest-running
CEO of a major

investment bank on Wall Street,

has pulled the firm back from
the brink during other crises,

but today, for the first
time that I'm hearing

it, investors are
questioning his leadership.

- Motherfucker.
- One key question

investors have for
Lehman Brothers,

What's the true earnings power of
this investment bank's business?

- Hey.
- Get up here.

We gotta start stacking sand bags.

What are you talking about?

We're down 21%. On paper, I just
lost $90 million, personally.

With investors pummelling
Lehman shares,

the big question this morning is,

What options does Fuld have?

So far, he has failed
to raise new capital

while virtually all of his
rivals have already done so.

And now, hedge fund
manager David Einhorn

is publicly questioning
the accuracy of...

Anything good?

It's a red-tailed hawk,
first one this year.

Dick Fuld's on one.

To provide credible answers.

So let's go through
a couple of those,

what you call
discrepancies, because...

- Tough morning?
- We show top-quality earnings,

- we beat every prediction.
- Yeah.

It's the damn short-sellers. You
know the game, short and distort.

They're rumourmongers and
they're making a killing.

What are your plans
for a capital raise?

We're way ahead of you.
Now, let me be clear,

we don't need the cash.

You know, it's about perception.

Buffett, Buffett.

We're thinking of reaching
out to Warren Buffett.

Great.

You and Buffett go back, right?

Do me a favour and call him.

Tell him Lehman is rock solid.

As Treasury Secretary, I can't

advocate for a
specific investment.

Hank, you want me to
raise capital or not?

Lehman Brothers is a hell of a
lot bigger than Bear Stearns.

The market is terrified.

When I was running Goldman,
I never even conceived

of asking the Treasury Secretary
to cut a deal for me.

Yeah, but the Bear
bailout created...

Please don't call it a bailout.

Okay, the very large Bear Stearns
purchase assistance package

created an expectation.

Fuld's counting on direct
intervention from you.

Buffett's a simple solution.

I think you make the call.

As what? Warren's
friend? His former

banker? The Treasury Secretary?

No. Fuld's calling him.

Hopefully he'll jump in
and we can all relax.

Relax? We just buried
one investment bank,

we got another one
that's barely breathing.

This is a confidence game.
People lose faith in Lehman,

these banks are gonna
drop like dominoes

and I don't have the authority
to do a thing about it.

We're late. We've been
late on everything.

Neel's team is working on some
kind of a disaster scenario.

We're calling it the
Break the Glass plan,

what to ask Congress for if
your back's against the wall.

Money.

Is what you ask them for.

The problem is,
Congress won't move

until we've already
hit the iceberg,

and at that point,
it may be too late.

So you're saying,
with the full weight

of the United States
Treasury behind me,

all I can do is call
Warren Buffett?

Hi, Warren. It's Hank.

I understand you've been
talking to Dick Fuld.

You know my misgivings, Hank,
about investment banks.

As soon as they started
trading for themselves,

the risk managers lost control.

I had a very unpleasant
time with Salomon Brothers.

That's fair enough.

But we both know that investment
banking is a profitable business.

I figure it made you a
billion or so, huh?

I gotta believe that
if the price was

right, you wouldn't
just walk away.

You know a good deal when
you see one. What say you?

I gotta leave that
to your judgement.

People act like we're
crack dealers.

Nobody put a gun to
anybody's head and said,

Hey, Nimrod, buy a house
you can't afford.

And you know what?
While you're at it,

put a line of credit on that
baby and buy yourself a boat.

You heard anything from Buffett?

He's asking for preferred shares
at 40 with a dividend of 9%.

We were just at 66. What the fuck?

Maybe it's just an
opening gambit, Dick.

Sounds more like a goddamn insult.

- Let me get that, Dick.
- Thank you.

We're at 36 right now.

We haven't been anywhere
near 66 in months.

The markets like Buffett.

His name will push the
price up overnight.

I don't care who he is,

I am not spending $360
million a year for

the pleasure of doing
business with him.

Real estate will come back.

Koreans have been sniffing around.

There you go. And they
won't steal us blind.

I've seen this before. CEOs
panic and they sell out cheap.

Right now, the Street's running
around with its hair on fire,

but the storm always passes.

We stand strong, and on the other
side, we'll eat Goldman's lunch.

So, what do we do about Buffett?

Screw Warren Buffett.

- He passed?
- Lehman dropped

to 28 and a half this morning.
What in the world is he thinking?

He's not thinking.
He's delusional.

He thought the ask was too high.

He's gotta raise cash.

I told him that.

- I spoke to Greenspan.
- Really?

He says there's too much housing
supply. That's the problem.

So we should buy up all the
vacant houses and burn them.

Dick needs a buyer, someone
with a grip on reality.

Barclays expressed some interest
a couple of months ago,

but I don't think the price
is low enough for them.

- Bank of America?
- Possible.

Dick's put out feelers
there before.

We have to keep it quiet, though.

Because if anyone hears that
they're trying to sell...

Lehman'll be dead within the hour.

The real estate investments
are killing the firm.

We have to admit publicly
we've made some mistakes.

We need to make a senior
management change,

signal to the market
that we get it.

- Meaning what?
- Meaning Joe Gregory.

Get the fuck out of here.

You are not gonna tell me
how to run my company.

Joe hasn't had your back on
risk, and everyone knows it.

Erin Callan's gotta
go, too. As far as

the Street's concerned,
she's a joke.

Joe Gregory has been
with me for 30 years.

And you want me to kick him to the
kerb because we had a bad quarter?

It's not just a bad quarter.

Stock hit 23.

Twenty-three. Most
of our guys are paid

in stock they can't
sell for years.

They've lost most of their net
worth over the last six months.

You don't stabilise the price,
your traders are gonna jump ship.

Selfish fucks.

It's not just bankers and traders,

Dick. Clients are
pulling their money.

There's gonna be a
run on this bank.

Sources tell CNBC that both

Erin Callan and Joseph Gregory
are out at Lehman Brothers.

In a statement, the company's
chairman, Dick Fuld, said

replacing Gregory with
48-year-old Bart McDade

has been one of the most difficult
decisions he's had to make.

Dick, the Koreans just
arrived at Sullivan.

Let's go make this happen.

My take is you'd be better
off staying here for now.

We need you to be our missing man.

We'll go in and push the
deal as far as we can,

and then we'll bring you in
at the end to top it off.

All right, fine.

Okay. Okay.

We are committed to our
presence in New York.

But we need to know that the
underlying numbers make sense.

We realise how things look.

But our stock is getting
hammered by the shorts.

The value is still there.

We just started. Min's excited,
but we haven't heard the terms.

Where are you?

I just stepped out
to take the call.

Get back in there. Don't be rude.

Okay.

We simply take the assets
you don't find appealing,

spin them off into a
separate company.

- You don't buy that bank.
- I'm very sorry.

You buy the good bank.

Look, they don't like
the real estate.

What do you mean,
they don't like it?

Dick, we're making
real progress here,

okay? Let me stay on it for now.

Min, how are you?

Great to see you.

I don't want to interrupt.

Dick, great timing.

We seem to be in sync on the
broad strokes of the deal.

Shall we get back to
the letter of intent?

Min, I have to tell you, I think
you're making a big mistake here.

There's great value in
the real estate assets.

How about we walk
through the portfolio

and I'll show you?

We have looked at them.

Then you must have looked
at them in the wrong way.

See, I just don't wanna see
you leave money on the table.

Perhaps we should take a break.

Min, I'm so sorry.

We have negotiated
in good faith. Now

all of a sudden we
are going backward?

We can work with you on the price.

It is not about the price.

It is about the way you
have conducted this.

I'd like to thank you, all of you,

but I don't think we have
a structure that works.

What, that's it?

You're just gonna pack
up and go back to Korea?

- Hello?
- Neel, it's Dick Fuld.

Listen, you know, if Hank
wants me to find a buyer,

you guys need to step up and help.

The Koreans just walked out, okay?

Look, I'm just speaking
for myself here,

but I think you need to do
what's right for the firm.

Do what's right?

What is that supposed to mean?

If your stock price keeps sliding,

you may get an offer
at a price that

doesn't look all that compelling,

but you may have to take it just
to keep the company intact.

What kind of price are
you talking about?

Could be...

I mean, it might be
low single digits.

Last February, we
were at 66 a share.

Lehman Brothers is
not Bear Stearns.

We've got a great business.
Real estate's gonna come back.

I am not fucking giving
this company away.

While the real estate
market has put

Lehman Brothers shares
under pressure,

mortgage giants Fannie Mae
and Freddie Mac stocks

are suddenly plummeting this

morning, after reports
the companies

may need to raise $75 billion
just to remain solvent.

Because they guarantee such
an enormous percentage

of the nation's mortgages,

there is renewed speculation
that the government

may have to step in
and take them over,

a possibility Barack Obama has now
raised on the campaign trail.

If Fannie Mae and
Freddie Mac collapsed,

then probably the financial system
would receive such a body blow

that it could be disastrous.

Freddie just dropped another
8%. Fannie's down 5%.

There's no bottom here. We
need to do something. Now.

We're working on a
proposal for Congress,

see if we can get the authority
to put some money in.

I'd rather not go that way,
but if we get there...

I think we're already there.

- How much are you gonna ask for?
- A blank check.

It has to be enough of a statement
to reassure the market.

They need to think I've got
a bazooka in my pocket.

I'm not saying that we use it,
but if we have the authority,

everyone who's dumping their
shares will calm down, back off.

Okay, if you're going to Congress,

why don't we give
to the banks, too?

Because Lehman's looking like shit
and Merrill's not far behind.

We'll be lucky to get them to
move on Fannie and Freddie.

We do what we can do.

Secretary, Mrs Paulson, over here.

Over here, please.

Mr And Mrs Paulson.

Secretary Paulson,
over here, please.

Mrs Paulson. Thank you.

Mrs Paulson.

Mr Paulson.

Mr And Mrs Paulson,
this way, please.

Mr Secretary, please.

- I've got her.
- You should take her.

Right over here, Secretary
Paulson, please.

Secretary, over here.

Big smile. Thank you.

That's just what I need.

Press photos of the Treasury
Secretary waving the Chinese flag.

Paulson the Communist. The look
on your face was priceless.

Hank, I must ask you about
Fannie and Freddie.

We have hundreds of
billions invested.

You've assured us the
investment is safe.

And it is, absolutely.

We're watching a great deal
of our money disappear.

Share prices have dropped
60% in the last two months.

Carrying your bazooka around
has not helped matters.

Congress gave you the power.
Perhaps it is time to use it.

The market will stabilise. We
just have to give it some time.

There was an approach
last month from Russia.

They have considerable holdings
in Fannie and Freddie as well.

They suggested we coordinate,
and without warning,

dump hundreds of
billions of Fannie

and Freddie's bonds
onto the market.

- That would be...
- Chaos.

The amount of debt your country

carries is a terrible
vulnerability.

- But you...
- We declined, respectfully.

Even in the US, it seems

the relationship
between the government

and private industry
isn't so simple.

Was it a threat?

No, no, it was a friendly reminder

that with a single
phone call to Moscow,

they can take down the
entire US economy.

The book says Fannie and
Freddie are a nightmare.

They are in the hole easily
tens of billions of dollars.

Another few weeks, they're gonna
start defaulting on their debts.

- We're gonna have to step in.
- I don't see how we can avoid it.

Turns out a bazooka's not that
useful unless you fire it.

Lehman's down another 10%.

You are not gonna let me get
down a single bite, are you?

This is why I have oatmeal.

Dick is trotting around the world
with his hat in his hands,

no one will give him any money.

Korea walked out on him.
Mexico told him to shove it.

No one's interested. All the
dumb money's already in.

What about B of A? Are
they still in the mix?

And Barclays is
sniffing around again,

now that they think
it's a fire sale.

- That's promising.
- I don't know.

The British, they do a lot of
talking. They never close.

- B of A is still our best bet.
- This can't be another Bear.

Absolutely not. They want
Lehman, they buy it outright.

But they may need a little
hand-holding, though.

They just bought Countrywide.
They're spread a little thin.

You may have to give them a break
with the capital requirements.

You want me to allow them
to raise their leverage

so they can buy a
bank that's about to

fail because it was
over leveraged?

You got a better idea?

Breaking news just coming
in. Sources telling CNBC

that the government has just taken

control of Fannie Mae
and Freddie Mac.

Back in July, you remember,
Hank Paulson said

that he wanted the
power to step in,

but he probably wouldn't use it.

It certainly sounds
like Paulson just

pulled the trigger
on that bazooka.

Despite the move to nationalise
Fannie and Freddie,

the market is still in negative
territory across the board.

Investors now focusing their
attention on Lehman Brothers,

amid fresh reports
that the nation's

fourth-largest investment bank

may be on the brink of bankruptcy.

Rodge.

Chris.

Bring your money today, huh?

Make sure Fuld's not keeping
any bad news out of the mix.

It's open kimono, to quote Dick.

There's a revolting image.

Did, you get a look
at the numbers?

The real estate's the issue. They
got it marked at 30 billion.

It's worth maybe half of
that. Don't look so nervous.

You're about to get a Wall Street
bank for the price of a hot dog.

I know that Paulson told Ken Lewis
that he's not gonna pay for this.

And I don't see how we can do it

unless the government takes
some of the downside.

Paulson is posturing.

He'll write a check
just like he did

for Jamie Dimon on the Bear deal.

He has to. He can't lose another
major bank in an election year.

Besides, the guy
made, like, a half

a billion bucks at Goldman Sachs.

He lets Lehman die? Goldman's
biggest competitor?

Makes him look like he's
still working for Goldman.

He's just doing it out
of a desk at Treasury.

Where are the donuts?

Exactly. If you're the CEO of
one of these financial firms,

you've already seen what the
government was willing to do.

Why wouldn't you play
chicken with them and say,

Sure, I'll help you out. But you
gotta throw in a sweetener,

just like you did for those guys?

They just assume I'm gonna
bail out Dick Fuld,

like I'm the guy behind the
elephant with the shovel.

They're all drawing a
line from Bear and

Fannie and Freddie
right to Lehman.

There's no way the taxpayers are
gonna go for another bailout.

Very large purchase
assistance package.

Large purchase assistance package.

We need to come up with a
private-sector solution,

get the investment banks
to bridge the gap.

Okay, but that's never
gonna work unless

they believe that
you've drawn a line.

I know you don't like leaking, but
let us reach out to the press.

Okay.

Mr Flowers, there's
a call for you.

Bob Willumstad from AIG.
He's very insistent.

Mr Flowers. My people tell me
you're the man to talk to.

We've got a real problem here.

Yeah? What kind of problem?

It looks very much like we are
about to run out of cash.

AIG?

We've sent over a document.
It's a spreadsheet.

It's confidential, of course, but
it might give you some insight.

I'm in the middle of Lehman.
I'm working with B of A.

Is there any way you could
come over tomorrow?

I'll take a look at the
numbers and we'll talk.

Mr Flowers.

Somebody put the TV on.

CNBC's talking about Lehman.

A person familiar
with Paulson's...

Treasury Secretary Hank
Paulson's thinking,

and he is saying there will
be no government money

in the resolution
of this situation.

They're saying two things make
the Lehman deal different.

The market's been aware
and had time to prepare

for over six months.
And the second is...

Is that just TV bullshit?

Or is that Paulson
sending us a message?

Chris?

Yeah? Sorry.

What exactly does
a person familiar

with the Treasury Secretary mean?

That could mean a lot of things.

Did one of your staffers do this?

Please tell me someone got
fired 10 minutes ago.

The leak came from me.

Hank, a public statement
like that can

have a lot of unintended
consequences.

We had to send a message to the
other banks. They need to step up.

I don't have another rabbit
I can pull out of my hat.

Rodgin Cohen just called me.

The B of A team is sitting there

playing Brick-breaker
on their phones.

They don't want this deal.

The deal is hanging
by a thread because

the closer they get to Lehman,

the more it looks like
a toxic waste dump.

Which is why at the end of the
day we may have to help them,

which would be a lot easier if
we didn't publicly state that...

We can't, Tim. Legally, we can't.

Legally, we haven't
figured out how yet.

I am concerned

we are limiting our options at
a time when we have very few,

if any, available.

I want all the CEOs in a
room. We've got the weekend.

We lock them in a room at the Fed

and we don't let them out until
they have a solution on Lehman.

Your oatmeal's getting cold.

They'll figure it out. They'll
all throw in some money.

Tim is advocating strongly that we

reconsider some kind
of Fed support.

Tim wants us to pick up the tab on
everyone. I can't be Mr Bailout.

The Lehman hole is
twice what Bear's was.

Investors are pulling
their accounts.

You want to lend into a run?

What about Barclays? Are
they still interested?

They can't afford the risk
any more than B of A can.

I don't doubt your ability to
talk anybody into submission,

but it is still a long shot.

And there's a very
real possibility

that Lehman goes under.

There's a deal to be made here.

I'm gonna make the deal.

With just a little more than an
hour left until the market closes,

shares of Lehman Brothers
have taken another tumble.

The stock is now trading at a
new low, under $4 a share.

And judging from
the selling, there

doesn't appear to be
a bottom in sight.

So, Blankfein has a speech
he's trying to get out of,

but the rest have confirmed.

- Tell him it's not optional.
- Yeah.

Good afternoon, Chairman. Thank
you so much for joining us.

- Whose plane is this?
- That's a rental.

Hank put it on his card.

Sir, you know Neel and Michele
Davis, Public Affairs.

Hi. Pleasure.

This is Dan Jester,
our new numbers guy.

Hi.

I talked him into coming
out of retirement.

- Excuse me? Retirement?
- He was with us at Goldman.

Got anybody at Treasury
who wasn't at Goldman?

Chairman, just to
be clear, there's

no question of
conflict of interest.

Hank sold all of his Goldman
stock before he took office.

- I wasn't implying anything.
- Sorry.

We're a little touchy about the
whole Government Sachs thing.

Shall we?

B of A keeps finding
more toxic assets.

They want you to
reconsider a Jamie deal.

They'll split the first
billion in losses, but

they want you on the
hook for the next 40.

You did it for Bear.

Greg, let me get back to you.

What, do I have to tattoo it on my

forehead? We are not
bailing out Lehman.

Wall Street has a
gambling problem.

If government keeps covering their
losses, they never learn anything.

- What?
- I didn't know if you wanted

to keep lecturing
me on moral hazard

or if I should just
call B of A back.

We need to keep them at
the table until they

come up with a
private-sector solution.

Tell them to stay with us.

- Alistair, hello.
- Hello, Henry.

Hold on one second.

Chancellor of the Exchequer.

I understand Barclays is one of
your potential buyers for Lehman.

My banks are already under
a great deal of stress.

I don't want to
become overextended.

Lehman is problematic,
but there's value there.

We will find a way to make it
attractive. Just stay with us.

Talk soon then.

Bye.

We'll keep Barclays in the mix,
but B of A is still our best bet.

We've got the CEOs of every
major bank coming here tonight.

We have to make it clear
that this is their problem,

that we are their advisers
and their allies,

but we are not their safety net.

What should we expect
from these guys?

Jamie is smart.

He doesn't have as much cash to
work with since he bought Bear.

Lloyd's a superstar.

Goldman's the smartest
shop on the block.

And just because I
used to be his boss,

it doesn't mean he's
gonna listen to me.

John Mack, he used to run
around the floor screaming,

There's blood in the water.
Let's go kill someone.

He's a fighter.

Thain was my number
two at Goldman.

He's selfish. He's a pragmatist.

He knows if Lehman
goes, Merrill's next.

Vikram Pandit is the
new guy at Citigroup.

No one knows if he's running
Citi or if Citi's running him.

Thanks for coming down
here on such short notice.

Monday morning,
Lehman will no longer

be able to honour its obligations.

We have two potential buyers.
B of A and Barclays.

Neither will take
the company unless

someone else finances
part of the deal.

The government is not in
a position to step in.

I did the last one.
You're gonna do this one.

Where's Dick Fuld?

Dick's in no condition
to make any decisions.

We're breaking you
into three groups.

The first one will try to
value Lehman's toxic assets.

The second one will
work on some sort of

structure for you all
to invest in Lehman.

And the third one works
on the lights-out plan.

If Lehman files for bankruptcy,
we need to figure out

how to contain the damage
to the rest of you.

Christ.

We've all seen this
coming for miles.

I don't think a Lehman
bankruptcy takes down our firms.

What, are we crossing our fingers?

You're asking us to save
a competitor. Let's

not act like you're
doing us a favour.

Gentlemen, gentlemen,
you are great Americans

undertaking a patriotic duty.

Your travail will
earn you the love

and gratitude of your country.

I think it was Thomas Paine
who said, These are...

Lehman is a trading partner
for every bank in this room.

Their failure will be a
massive blow to all of you.

This is your problem.

We can all argue about
how we got here.

Deregulation, derivatives,
Dick Fuld made bad decisions.

We're all responsible.
It's a catastrophic mess.

The government's done whatever
it can do. It's on you now.

You need to fix it and
you need to pay for it.

Let me be clear.

We will remember anyone
who is not helpful.

Do you notice a
little pattern here?

We don't deal with
things until there's

some kind of emergency
on the table.

Yeah, we don't deal with
things until Friday.

Some kind of a weekend thing.

When were we gonna figure out

exactly how to handle the
failure of an investment bank?

Let's do it over a weekend.

I talked to a person who is

monitoring the
situation out there,

and the person said they all want
the same deal Jamie Dimon got,

and they're not going to get it.

Just a heads up, Chris
Flowers is in the lobby.

He's consulting for
B of A on Lehman.

Hank pushed Flowers
out of Goldman.

Yesterday, we thought
Lehman was holding

30 billion in crap. Today it's 70.

$70 billion in assets that we're
valuing with a dartboard.

No, we're gonna work this out.

Unless you step in,
we're ending this.

Don't forget about Dick.

Yeah, Dick Fuld keeps calling,
hammering us to raise the price.

Excuse me.

70 fucking billion
and no collateral?

If Lehman Brothers
fails this weekend,

there's little doubt
amongst the people I

speak to that Merrill
Lynch will be next.

Confidence is a
very fragile thing.

And in our financial markets,
it is eroding very quickly.

Lehman's not gonna
make it. We're next.

We need to do something right now.

B of A's the only one out
there. I can put in a call.

- It screws Lehman, but...
- Lehman screwed themselves.

Paulson has drawn a
line in the sand.

Lehman is dead. Make the call.

We'd like you guys to look at
taking a stake in Merrill,

something in the
neighbourhood of 10%.

I don't know if I can
generate any interest in 10%,

but if the whole
company's in play,

I bet that's something
that we'd consider.

Us and Lehman?

Deal this size, there's
only room for one.

It is a lot of risk, no question,
but if you stay in the game,

we all will find a
private solution.

Absolutely.

Don't get scared by
the numbers. We'll

figure it out. Lehman
is worth owning.

Guys, you got a second?

I was at AIG yesterday.

Next Wednesday, they got a
$5 billion hole, minimum.

I called Warren Buffett. He
wouldn't touch it with a stick.

We're looking into it.

It's a very big company.

Thanks, Chris. I
appreciate all your help.

They're not on top of it.

Look at this.

Is this even possible?

AIG?

Holy shit.

Get into this.

John.

Do you see what's happening here?

Are you watching out for yourself?

I'm not thick. I'm
working on something.

You're talking to B of A.

I'm sorry.

I know it's not good
for Lehman, but

I have to take care of Merrill.

Let me worry about Lehman.

Barclays is still in the game.

Just get it done.

B of A is gonna buy Merrill.

We need to make Barclays work.

I thought you said the
British never close.

They're here. They seem
to really want it.

If we hold their
hands, they'll close.

Rodgin, what the fuck? I can't get
Geithner. I can't get Paulson.

I can't even get my own goddamn
employees to pick up the phone.

There's a lot happening
down here, Dick.

Oh, fuck.

You know what? You tell Geithner,

he doesn't pull my ass out of the
fire, Merrill's gonna be next.

He knows that.

Dick, he just told me they're
working on a solution for Merrill.

Those cocksuckers are
gonna bail out Merrill?

No, no, not the Fed.

There's no private buyers.
There's just B of A and...

They're gonna put B of A
together with Merrill?

We still have Barclays.
Hank feels that...

The federal government
is snaking my deal?

I cannot fucking
believe this shit.

B of A made a deal with Merrill?

Yeah, Lehman's still our problem.

I don't think I can take
another day of this.

You're getting out
of a Mercedes to

go to the New York
Federal Reserve.

It's not a Higgins
boat on Omaha Beach.

Okay, okay, we've been
here a long time.

Let's stop fucking around.

Main Street wants
Wall Street to pay.

They think we're
overpaid assholes.

There's no politician who's
gonna sign off on a bailout.

Why would you bail out people
whose sole job is to make money?

So, let's make this real simple.

Hank thinks he can sell the good
parts of Lehman to Barclays,

but someone has to
take the real estate

crap that's weighing
down the company.

Nobody knows how much
this shit is worth,

but we know somebody has
to buy it to make a deal.

I don't like it. Nobody likes it.

Let's just suck it up and do it.

How many of you can
kick in a billion

dollars to stop Lehman
from going down?

I'm in. One billion.

Okay.

Goldman's in for a billion.

John?

Yeah?

Yes.

Yeah.

Yes.

We did it. Barclays came through.

Too goddamn right.

Barclays won't touch the
real estate assets,

but the other banks
agreed to cover those.

Call the board. Get everybody
here. We got a deal to make.

Okay.

Did you get him?

Geithner doesn't return my calls.

We can't get hold of
any of those people.

At the end of the day, they can't
sign the deal without our say so.

Yes, but do they know that?

Yes.

Yes, by all means, now that he
deigns to call, put him through.

Sir Callum, sorry I haven't
gotten back to you.

We're just sorting through
this Barclays deal for Lehman.

As Barclays' regulator,

we have serious concerns about
this proposed arrangement.

What? Are you saying you
won't approve the deal?

Even if we were comfortable with
the agreement, which we are not,

Barclays would need at least 30
days for shareholder approval.

No, no, no, no, no, no. He
can't. He can't do this.

Can they stop the deal?

Yeah, of course they
can stop the deal.

But even if they don't stop
it, the delay will kill it.

Let's call the Chancellor
of the Exchequer right now.

None of those assets would
be part of Barclays.

Yes, but if the FSA were to...

We need stability.

Of course.

Must be to the British financial
system. Surely you see that.

Yeah.

I wish you good night
and good luck.

Good night to you, too.

We don't want to
import your cancer.

Those of you

who didn't want to assist
the Barclays deal,

you can breathe a sigh of relief.

The deal's not gonna happen.

- Hey, we have the money.
- Deal's dead.

British regulator won't sign off.

There must be some
pressure you can exert.

Trust me, I've done
everything I can.

The British,

they grin-fucked us.

Paulson's got 100,000 employees.
Geithner has 200 lawyers.

Frigging Chris Cox
has 3,000 people.

Not a single one of those
assholes could pick up a phone,

call the British, find out if
there was a deal to be made

before they spend the weekend
sweating us for cash?

Somebody dropped the ball.

They didn't drop the ball.

They dropped the ball,
kicked the coach in the nuts

and took a crap in the
quarterback's mouth.

Of course.

The Fed will do something.

They have to.

We've got to announce the
Lehman bankruptcy now.

If Asia opens and this
isn't locked down,

everyone's gonna assume the worst.

The sell-off will kill
the Merrill-B of A deal.

Who's gonna make the announcement?

I think it's gotta be SEC.

Yeah.

Okay.

Let's do it here. How
soon can we set that up?

Right away.

We could use the main
floor, the entrance hall.

With the statue
behind me? Excellent.

Did Lehman actually agree to file?

Chris, call Lehman.

Make sure they file right now.

Absolutely.

AIG's a huge problem.

The books are a mess. But
from what I can tell,

half the banks in the world
are in bed with these guys.

Everyone who had a piece-of-crap
mortgage security

bought insurance on their risk
from AIG, and I mean everyone.

How could they let this happen?

They must have figured real
estate would never go down, ever.

Hank, Lehman still hasn't filed.

Cox has to make his
announcement. Asia's opening.

Has he talked to them?

He hasn't even called yet.

We told Fuld about Barclays.
We said Cox was gonna call.

He's got his entire board
sitting there, no call.

Cox is like a deer
in the headlights.

Son of a bitch.

You are their regulator.
Call the Lehman board now.

Hank, it's a complicated
situation where...

Asia's opening.

They don't announce, the
market goes in the toilet.

We have to consider
the appropriate

role of government here.

Can I, as Chairman of
SEC, move forward and...

You guys are like the gang
that can't shoot straight.

This is your job.

Make the damn phone call.

Chris, this is Dick Fuld.

The board is in session.
Everyone is here.

All the directors and
the firm's counsel.

We understand the Barclays
deal has imploded.

We were hoping you might have some

option that we haven't
thought of yet.

The markets are in
turmoil, as you know.

A Lehman bankruptcy will help

settle that uncertainty and,
we believe, calm the market.

Both the Fed and SEC are
in agreement about this.

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.
- Oh, 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 fucking 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 hyper-drive.

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

pull out 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.

You want too big to
fail? Here it is.

You got a better idea? The
suggestion box is wide open.

I hate to do this right now,

but I'm gonna have to have
a press call first thing,

and I really don't know
what I'm gonna tell them.

Tell them Lehman exacerbated AIG.
The simultaneous payouts of CDOs

and credit default swaps put
catastrophic pressure on...

Go back further.

The global pool of
investment capital...

She has to do this in English.
Start with the homeowners.

Okay, okay, here's
how you explain it.

Wall Street started
bundling home loans

together, mortgage-backed
securities,

and selling slices of those
bundles to investors.

And they were making big money,

so they started pushing
the lenders, saying,

Come on, we need more loans.

The lenders had
already given loans

to borrowers with good credit,

so they go bottom-feeding.
They lower their criteria.

Before, you needed a credit score
of 620 and a down payment of 20%.

Now, they'll settle for
500, no money down.

And the buyer, the regular
guy on the street,

assumes that the experts
know what they're doing.

He's saying to himself, If the
bank's willing to loan me money,.

I must be able to afford it.

So he reaches for
the American dream.

He buys that house.

The banks knew securities based
on shitbag mortgages were risky.

You'll work on shitbag.

So to control their
downside, the banks

started buying a
kind of insurance.

If mortgages default,
insurance company pays,

default swap.

The banks insure their
potential losses

to move the risk off their books

so they can invest
more, make more money.

And while a lot of companies
insured this stuff,

one was dumb enough to take on an

almost unbelievable
amount of risk.

- AIG.
- And you'll work on dumb.

And when they ask me
why they did that?

- Fees.
- Hundreds of millions in fees.

AIG figured the housing market
would just keep going up,

but then the unexpected happens.

Housing prices go down.

The poor bastard who
bought his dream house,

the teaser rate on his
mortgage runs out.

His payments go up. He defaults.

Mortgage-backed securities tank.
AIG has to pay off the swaps,

all of them, all over the
world, at the same time.

AIG can't pay. AIG goes under.

Every bank they insure books
massive losses on the same day.

And then they all go under.

It all comes down.

The whole financial system?

And what do I say when they ask
me why it wasn't regulated?

No one wanted to.

We were making too much money.

You'll work on, "We were
making too much money."

Hey, Hank.

These are really
mild, but they work.

I know the whole
Christian Scientist

thing, that you don't
take medicine.

But you need to sleep.

Jim...

Hank, not just for
your own sake. Okay?

You don't look so good.

Just minutes ago,
CNN has confirmed

that the Federal
Reserve is negotiating

to rescue insurance giant AIG.

The negotiations could include
an $85 billion temporary loan

to stave off AIG's
imminent collapse.

This is a blockbuster, folks.

About this time last
night, many on Wall Street

were fearing total disaster today.

So, another federal bailout
of another Wall Street giant.

Again, as we mentioned,
big, big financial news.

And this affects almost everyone
out there who has a 401.

The news comes about
three and a half hours

after the stock
exchange closed on...

Motherfucker.

We wanna go straight
right now to Ali Velshi

to kind of give us a
bottom line on this, Ali.

And then we're gonna get
a lot more in depth...

AIG securing an 85...

The credit markets are
still frozen solid.

We keep dumping money
into these companies

so the markets will stabilise,

and nothing helps.

We can't keep doing this.

We rescued Bear with
no legislation,

AIG with no legislation.

People think Fannie and Freddie
was a bait-and-switch.

I don't like it any
more than you do,

but they were
exceptional situations.

This situation demands an endgame

that does not rely on
unilateral action from the Fed.

This is a democracy.

We cannot be men behind the
curtain pulling the strings.

We need some kind of an overall

solution that heals
the entire system.

And it has to be legitimate.

We've been putting off
going to Congress.

It's two months
before an election.

They can't vote yes to a massive

bailout of the entire
banking system.

- They'd never get re-elected.
- Hank...

We go to Congress, publicly state
we don't have the firepower

to control this any more,
and then they say no,

that is really the
nightmare scenario.

The nightmare scenario's
already here, my friend.

We're in it.

You can't put this all
on your own shoulders.

We're running out of options.

Then you just keep trying.
That's what you do.

Eventually something's gonna work.

I'm not sure that that
is true any more.

There's not a bank in the world
that has enough money in its vault

to pay its depositors.
It's all built on trust.

And, Wendy, we are so very close.

Morgan Stanley, Goldman
are an inch away.

If the other banks
stop trusting them,

if they pull back on
interbank lending,

it's over in a matter of hours.

And from there it goes
too fast to stop, a run,

and not just on one bank, I
mean on the whole system.

And average people
wondering, Is my money safe?

They start pulling their cash.

And after that, lines outside
the banks, smashed ATMs.

A couple of weeks,

there's no milk in the store.

For the second time this week,

there was a massive
sell-off on Wall Street,

the Dow Jones Industrial's
free-falling some 450 points

on news of a
taxpayer-funded bailout

of the AIG insurance company.

Three of the five
investment banks are gone.

The country's biggest
mortgage lender is gone.

Fannie Mae, Freddie Mac, brought
under government control.

The financial system is holding
right now, but for how long?

All the king's horses
and all the king's men

are being brought to bear to
keep this thing together.

- Hi, Tim.
- I'm on the Street, Hank,

and people are just going
about their business.

They have no idea the whole
thing is about to fall down.

We're gonna have
to go to Congress.

We don't have a choice any more.

Okay.

How fast do you think you
can get them to move?

It's gonna be at
least a couple days.

Goldman and Morgan Stanley
are going down now.

We gotta do something today.

Like what?

The market doesn't like
investment banks, right?

The money's saying fuck you
to the whole business model.

Yeah.

Yeah, so merge them
with commercial banks,

turn them into regular banks
regulated by the Fed.

They can use depositors' cash.

It will give them access
to the discount window.

It's cheap government cash.

- You wanna make them bigger?
- It's a trade-off, Hank.

The upside is it'll
stabilise them.

The downside is,

yeah, they'll be
really fucking big.

Do it, Tim.

Godspeed.

Get me Blankfein.

Lloyd, call Vikram Pandit,
talk to him about a merger.

Tim, we're looking
at all our options.

You don't have options, Lloyd.
There's a run on your bank.

You need money. Citi has deposits.

Citi's a mess, you're
organised. Call Pandit.

Yeah.

I want you to look at merging
with Morgan Stanley.

What, are you kidding
me? I just bought Bear.

We're still trying
to make that work.

You didn't buy Bear. You got
Bear as a Christmas present.

The market's a fucking disaster,
Jamie. Talk to John Mack.

Hey, Geithner says we
should talk about a merger.

- You wanna do a deal?
- No.

Then why the fuck did
he tell me to call you?

I'm under orders to
try and help you.

You're a prince,
Jamie. A real prince.

Apparently, some
people seem to think

combining our firms
would be a good idea.

I want you to know I'm
flattered by this call.

Vikram, I'm not trying to
flatter you, believe me.

Geithner's calling.

Here comes goddamn eHarmony.

Hey, guess what. Jamie's
not interested.

Do Wachovia.

They were writing mortgages
with their eyes closed.

Tim, it's a shit
sandwich. Forget it.

I haven't been able to
reach you for four hours.

That is totally fucking
unacceptable on a day like today.

I had to run my team through
the Goldman proposal.

It's not gonna work.

You passed on Goldman
without even talking to me?

I don't need another trillion
dollars on my balance sheet.

Next time I call, pick up.

Fucker.

The problem is the toxic
assets. Let's just buy them.

Ooh. We'll call it Cash for Trash.

When the market stabilises,
we'll unload them.

Hopefully, Treasury will
get its money back.

Is that in the Break
the Glass plan?

Basically.

My copy's missing
some pages. Could

someone else show
me the rest of...

It's succinct.

We've got one shot with Congress.

You want them to write a piece of
legislation based on three pages?

Look, guys,

buying toxic assets is
gonna be a nightmare.

Nobody knows what
the stuff's worth.

It'll take forever to untangle.
These banks are going down now.

So what do we do?

You wanna unfreeze
credit, right? You

want the banks to
lend people money?

- That's the goal.
- So give them money to lend.

Capital injections?

Dan, come on.

I can't believe you're
pulling out the N word.

I'm not saying
nationalise the banks.

I'm saying isolate
the ones that are

really in trouble and
make an investment.

- It's un-American.
- It's sure un-Republican.

You'd make the government
a stockholder.

What, do we tell
them how to manage

themselves, what to buy and sell?

Run them like the post office?
Because that works like a dream.

We make it temporary. We make
ourselves non-voting stockholders.

You can't just hand the banks
massive piles of cash.

Nobody's gonna go for it.

To the Republicans
it's nationalisation.

To the Democrats it's a bailout.

And the banks are
gonna go ballistic.

Sorry, Dan, not
gonna happen. Kudos

for out-of-the-box thinking.

Neel, if we go with your
plan to buy the assets,

how much is it gonna cost?

It won't work.

Look, the plan is three
pages long, totally vague.

If buying the assets
doesn't work, we'll

nationalise the banks
for you, okay?

- How much?
- To be safe, maybe a trillion.

The Congress will never
do a trillion, never.

There's $11 trillion in
residential mortgages.

There's three trillion
in commercial

mortgages. That's
14 trillion, right?

You gotta figure about
5% default rate.

5% of 14 trillion is

$700 billion.

It's better than a trillion.

The only way to get this done
is to just scare them shitless.

That should be easy. I'm
scared shitless myself.

Troubled Asset Relief Programme?

TARP, we're calling it.

This is your draught of the bill?

Subject to revision, certainly.

I've only got three pages
here. Am I missing something?

No.

You're just looking for a
big blank check in a hurry.

It's all for the banks.
You don't want a penny

for the average Joe that's
about to lose his house?

There's not a scrap of
oversight built into this,

not for the banks or for
you, for that matter.

You want us to simply hand over
$700 billion and trust you?

How is it possible you
didn't see this coming?

If you wanna rewind the
tape, we can do that.

But right now, the one thing
we don't have is time.

We need an announcement
tonight to calm the market.

We need legislation next week.

I spent my entire academic career

studying the Great Depression.

The Depression may have started
because of a stock market crash,

but what hit the general economy
was a disruption of credit,

average citizens unable to borrow

money to do anything,
to buy a home,

start a business,
stock their shelves.

Credit has the ability to
build a modern economy,

but lack of credit
has the power to

destroy it, swiftly
and absolutely.

If we do not act boldly
and immediately, we

will replay the
Depression of the 1930s,

only this time it will
be far, far worse.

We don't do this now, we won't
have an economy on Monday.

Geithner.

We took the proposal
down to Congress.

Are they gonna go for it?

They didn't like the
fact that it was short.

I thought concise was a plus.

They thought it was flimsy
or arrogant or something.

I don't know what they think.
They couldn't get past it.

The market's in a death spiral.
They're gonna sink the bill

because the proposal
is too fucking short?

They're working on it. They're
gonna make it longer,

among other things.

Look, just tell me
you got something.

No. No, we're nowhere.

Who's left for Morgan Stanley?

China Investment Corporation.

Maybe Mitsubishi.

No, the Japanese will
never do this deal.

How about Goldman?

Goldman's looking at Wachovia,
but they're so fucked,

even John Mack turned up his nose.

You gotta get that bill passed.

- I'm pushing.
- Well, push harder. Please.

This isn't working, Hank.

Hank?

Could you excuse me a moment?

Oh, my God. Gao, Gao.

I am so sorry about this.
There's nothing we can do.

It's New York, you
know. We're lucky we

can still buy a beer
at Yankee Stadium.

Don't worry about it.
I should quit anyway.

When you're ready,
we'll be inside.

Is there any movement there?

They made an extremely low opening

offer. I pretended
I didn't hear it.

The markets can't
open Monday without

a resolution of Morgan Stanley.

We really need you to do a deal.

- You need to call Jamie.
- I called Jamie.

He doesn't want us.
There's too much overlap.

We've spoken to him. He'll do it.

For what, a dollar?
Why would I do that?

I got China Investment and
Mitsubishi kicking my tyres.

I know those guys. They're not
gonna close a deal in time.

We want you to call Jamie.

Let me ask you a question.

35,000 jobs just
disappeared in this

city between AIG, Lehman and Bear.

We make a deal with
Jamie, he'll fire

20,000 Morgan Stanley employees.

You think that's
good public policy?

John, we are looking at
the whole system here.

The Chinese are leaving.

Gao found out we're also
talking to Mitsubishi.

I gotta go.

All right, get me Kuroyanagi
and a Japanese translator.

We're closing with
Mitsubishi tonight.

Tim Geithner's calling again.

Cover your ears.

You tell Tim Geithner
to fucking blow

me. I'm trying to save my company.

Put him on the schedule, but
make sure it's after lunch,

because that way I can fit
Madeline in beforehand. And...

Morgan just made a
deal with Mitsubishi.

So we're the only bank with
our dick still in the wind.

I'm calling Buffett again.

Grandpa, they keep calling.
What if it's important?

They always think it's important.

All right, I'll make it fast.

Warren, thanks for calling
back. How are you?

Just fine, Lloyd. What
can I do for you today?

I'd like to talk to you about
taking a stake in Goldman Sachs.

What do you have in
mind? Sounds expensive.

Maybe not.

You better have good news,

because I might be dead before
we finish haggling over TARP.

Buffett's throwing five
billion into Goldman.

We're off the ledge.

For the moment.

The October surprise
arrived a little early,

with a game-changing jolt
to the White House race.

Call it a master stroke or a
desperate Hail Mary pass,

McCain announced he would
suspend his campaign

and asked for this Friday's
debate to be postponed

so he can return to Washington
to focus on the economic crisis.

Now is our chance
to come together to

prove that Washington
is once again

capable of leading this country.

Thank God he came back.

Like Daniel Day-Lewis in
Last of the Mohicans,

he will find us.

- They're blowing it up.
- What happened?

McCain wanted to swoop
in and save the day,

but doesn't have any
idea how to do it.

It's a 100-page piece
of legislation we've

been carefully
negotiating for days.

What, did he think they were
gonna sit around and spitball?

Yeah, when McCain got here

and found out that the deal was
basically done, he went apeshit.

The Republicans fell
in behind their

guy. They wanna start
all over again.

Democrats flipped out.
Republicans dug in.

- Clusterfuck.
- Clusterfuck.

- Where's Hank?
- Still talking to McCain.

If you or anyone
else does anything

that causes the next depression,
it is not gonna be on me.

I have a big mouth, Senator,

- a very big mouth.
- Hold on...

He's not threatening
the Republican

presidential nominee, is he?

- Something's gotta be done.
- No, no. Excuse me, please.

Where are the Democrats?

They're right down this way.

- Is Nancy there?
- Yes. Yes, she is.

Thank you.

Nancy...

Oh, gee, Hank. I didn't
know you were Catholic.

I beg of you, don't blow this
up. It was a bad meeting,

but we need to get
together on this.

We're not the ones
trying to blow it up.

I just ask you to stay with us.

Please.

The House began debating the
rescue bill at 9:27 this morning.

At about 1:28 p.m.,
Congress did finally act.

- This is a squeaker of a vote.
- We are down to it right now.

It looks like the Democrats
delivered their caucus

and the Republicans
so far have not.

What do you think they could
do to change the bill

to get a few Republican votes
over to the other side?

If they hang Wall Street CEOs,

I think that would get
a few more votes.

I'm not sure what they
could do exactly.

It is possible that the leadership
of the Congress would conclude

that there's nothing that can
get a majority of support

and see what Hank Paulson can do
and the administration can do.

Leaders are negotiating right now

who risks their seat. And
that's what I'm hearing.

Pelosi wouldn't have
brought the bill to the

floor if she didn't
think it would pass.

I don't know the answer to
that, Charlie. I can't answer.

I'm just reading an e-mail
that's coming to me.

I think the bottom line is they

gotta go back to
the drawing board.

Do they have the time,
though, to do that?

Look at the Dow Jones
Industrial Average.

You know you're gonna
get a sell-off.

You guys, at this
point, we just gotta

hold on to the sides of the kayak

and ride through this because...

They didn't pass it.

- They did not pass it.
- It just wasn't enough.

They're gonna end up being
nine votes short, Bill.

Say that again, Steve.

I think they're gonna end
up being nine votes...

If they get all six... Five
of the remaining votes,

they'll be 10 votes short now,
if they get all five remaining.

The writing is on the wall there.

And we're here down on the floor.

Of course, traders have
been standing around.

Look, we're all here in knots...

The networks are waiting
for you in the press room.

I can't even...

We have to go back again.

They don't get to say no on this.

Okay.

The White House wants a meeting.

Good. We'll come up
with a new strategy.

The White House has to
push harder on the Hill.

Meanwhile, we need to keep working
on what we do with the money.

Let's act like this is gonna work.

In that case, let's talk
about cash injections.

- Here we go again.
- We can't nationalise the banks.

It's not nationalising...

That's how Japan got itself
a decade-long recession.

Is that where we wanna go?

What else do we have?

Cash for Trash.

Buying toxic assets is
still our go-to move.

All right. Find a
way to simplify it.

Dan, work something up.

For discussion purposes, let's
see what it would look like.

For those who supported the $700
billion Wall Street bailout,

it was a surprising
and stunning failure

when the House of Representatives
voted to reject it.

It's a stinging defeat
for President Bush,

delivered at the hands of
his fellow Republicans.

We put forth a plan that was big
because we've got a big problem.

The reality is that we're
in an urgent situation.

And the consequences
will grow worse each day

if we do not act.

- I know. I keep telling...
- Draught of the new bill.

Are they having any luck with it?

The White House thinks they got
a better shot of pushing it

through the Senate side first.
Hopefully they're right.

They asked us to back off
and let them handle it.

So I'm trying to back off.

Buying toxic assets
isn't gonna work.

- Why not?
- It's too slow.

I think I've been saying that.

Well, we knew it was
complicated, but how slow...

Two months, maybe more.

How is it possible we
didn't know how...

I didn't ask how long
it would take, okay?

Can we move on?

So maybe we can talk about
capital injections.

Dan, we really can't.

I think we're gonna have to.

Even if Neel could expedite the
process, which seems unlikely,

the system is crumbling.
The banks need money now.

If cash injections are the most
efficient way to stabilise them,

then we can't back off
because we're uncomfortable

being the men who nationalised
a few American banks.

It's faster, that's for sure.

It will push us back off the

precipice, yes,
unfreeze the system.

We give them some money
and they lend it out.

The motion is adopted.

After rejecting the Bush
Administration's TARP plan

only four days ago, the
House passed it today.

The big question now,
whether investors

will take comfort in the news.

Current indicators show the stock

market is continuing
its free fall.

Hello?

Warren, it's Hank.

I'm sorry. It's late.

Am I waking you?

No, not at all.

Can I pick your
brain for a minute?

Sure. What's the problem?

How do you get a healthy bank
to accept a capital injection?

I had to drag my ass all the
way here from California.

They wouldn't even tell me why.

Nobody knows what this is about?

Nope.

Talk to Jamie?

Yep. He'll be fine.

Did you tell him what was coming?

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

a capital injection
he doesn't need? No.

I told him we need his help

and I asked him very politely
not to fuck with us today.

He got it.

She's here.

Gentlemen. We think
this is gonna work?

Oh, yeah. They're gonna love it.

We are of the view that
the United States needs

to take strong, decisive action

to arrest the stress in
our financial system.

Through our new TARP authority,

Treasury will purchase
preferred stock

in each of the banks
represented in this room.

That stock will yield 5%
the first five years,

9% after that.

We give you money.
You lend it out.

It will unfreeze credit, stabilise
the banks, restore confidence.

Everyone will be better off with
more capital in the system.

And that is why all nine of you

will participate in the programme.

Some of us don't need any capital.

You all need capital.

You have no idea what the market's
gonna look like in a year.

Neither do you.

I'm not one of you New York
guys with your fancy products.

Why am I in this room talking
about bailing you out?

The stronger banks will serve
as cover for the weaker banks.

If just some of you take
it, the money's a signal

that a bank is too
weak to survive.

The market will devour it.

How much are we talking about?

A hundred and twenty-five billion.

Bank of America, 15 billion.

Bank of New York
Mellon, three billion.

Citigroup, 25 billion.

Goldman Sachs, 10 billion.

JP Morgan, 25 billion.

Merrill Lynch, 10 billion.

Morgan Stanley, 10 billion.

State Street, two billion.

Wells Fargo, 25 billion.

What happened to
buying toxic assets?

- Wasn't that the idea?
- It's too slow.

It'll be dead before
we sort it out.

So, we're just handing
the reins over to you?

The deal's actually pretty good.

You turn your nose up at this now
and we have to rescue you later,

the terms won't be
nearly as attractive.

It's cheap capital. It's not
the worst idea in the world.

It is for those of us who
already have capital.

We will be non-voting
shareholders.

This will be a temporary measure.

What if we decline to be involved?

The Chairman of the FDIC
is sitting right there.

Tomorrow you'll find out

that you're not as well
capitalised as you think you are.

What kind of protections
can you offer on changes

for compensation policy?

I mean, if the government is
going to become a part-owner,

does that mean that the government
is going to dictate compensation?

Are you asking me about
your bonus right now, John?

I'm running a company.

If the Fed tells me I can't offer
competitive pay for talent,

you're gonna launch
the biggest brain

drain this country's ever seen.

Is that the way you
wanna run the banks?

Until the money is
repaid to the Treasury,

there will be some
limitations on tax

deductions and golden parachutes.

- Well, there you go.
- I don't really understand

why there needs to be so
much tension about this.

The country is facing the worst

economy since the
Great Depression.

If the financial system collapses,

it will take every
one of you down.

Give me the papers.

- You can't just sign it.
- Oh, no?

- Not without your board.
- My board's on 24-hour notice.

I think they'll go along with it.

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

Anyone else?

Are they gonna do it?

They're calling their boards.

- That's a good sign.
- If they do go along with this,

we should announce something
alongside the injections,

maybe a programme to
buy up mortgages.

I'm not rushing out
some half-assed plan

just to make it look like
we're doing something.

Maybe we just beef
up the restrictions

on how they spend the money,

something to take the stink off.

Put more restrictions on
it, they won't take it.

One thing too many for today.

They almost bring down the
US economy as we know it,

but we can't put restrictions
on how they spend

the $125 billion we're giving them

because they might not take it.

What's this?

That is,

a poison dart frog.

Wendy took it in Guyana.

Is this yours?

Al Capone's.

Eight out of nine are in.

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

It's gonna go through.

I'll call the Speaker's office.

And, we're gonna get you on
the phone with the President.

Okay.

Dow is up 900 points just
because we were meeting.

Well, that's good.

That's good.

It was the right thing.

Absolutely.

I was prepared for more blowback.

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

Well, I certainly
hope that they...

What?

I hope they use the money the
way we're asking them to.

They will lend it out, won't they?

Of course they will.

Of course they will.