The story of a company that was too big to fail - until it did.
I say “almost” because Sorkin has pulled off a rare feat. He has turned more than 500 hours of interviews and documentary evidence ranging from e-mails to call logs into an engrossing fly-on-the-wall account of one of the most tumultuous years in U.S. history. “In the end,” he writes, “this drama is a human one, a tale about the fallibility of people who thought they themselves were too big to fail.” ..... As chapter one opens, we see Richard S. Fuld Jr. of Lehman Brothers Holdings Inc. shuffling out the front door of his mansion in Greenwich, Connecticut, and into the back seat of a chauffeured black Mercedes. It’s 5 a.m. on March 17, 2008, and there’s talk of a run on the bank. From there, Sorkin traces the full arc of the crisis as it unfolded in executive suites, corporate jets and government Suburbans that year. He shows how U.S. Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and Timothy Geithner at the New York Fed brokered ad hoc deals in an attempt to halt the conflagration as it engulfed one institution after another -- Fannie Mae and Freddie Mac, Lehman, Merrill Lynch & Co., American International Group Inc. Take the Money The story closes on the chilling day last October when Paulson seated the leaders of nine banks -- including Jamie Dimon of JPMorgan Chase, Vikram Pandit of Citigroup Inc. and Richard Kovacevich of Wells Fargo & Co. -- around a 24-foot-long mahogany table and effectively ordered them to take billions of dollars in government cash injections in exchange for preferred shares. When Kovacevich protested that his San Francisco-based bank didn’t need its $25 billion slug -- “I’m not one of you New York guys with your fancy products,” he’s quoted as saying -- Paulson responded with a none-too-subtle threat of a regulatory crackdown, according to this account. “You’re going to get a call tomorrow telling you you’re undercapitalized and that you won’t be able to raise money in the private markets,” Paulson is quoted as saying. ..... Other anecdotes are less familiar, especially when it comes to Geithner’s often inept attempts to play matchmaker between a dizzying array of banks. His “insta-merger strategy” became so unpopular that executives started calling him “eHarmony,” after the online dating service, Sorkin says. ..... Sorkin resists editorializing until the epilogue, where he poses a key question about Paulson: Did his work help mitigate the crisis -- or make it worse? Paulson gets a passing grade. “A year later, it appears that many of the steps he took in the midst of the crises laid the groundwork for the market’s stabilization,” Sorkin writes. The danger now, he adds, is that Washington will squander a “once-in-a-generation opportunity” to fix our broken regulatory machinery, including tougher limits on leverage. “Relieved that the worst is supposedly behind us, the Obama administration seems to have moved on to other priorities,” he writes. That is a monumental mistake. Andrew Ross Sorkin’s “Too Big to Fail” is almost too big to read: 600 packed pages recounting, blow by BlackBerried blow, how Wall Street and Washington struggled to save the financial system (and their own skins).