ABOUT THE AUTHOR
Andrew Ross Sorkin is the award-winning chief mergers and acquisitions reporter and columnist for the New York Times. He is also the editor and founder of DealBook, an online daily financial report. He has twice won a Gerald Loeb Award, one of the highest honors in business journalism; once for breaking news and and a second time for authoring Too Big to Fail. The World Economic Forum named him a Young Global Leader and he was added to The Directorship 100, recognizing the nation’s most influential people on corporate boardrooms. Too Big to Fail has been on the hardcover bestseller list for more than twenty-three weeks.
PENGUIN BOOKS
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First published in the United States of America by Viking Penguin, a member of Penguin Group (USA) Inc. 2009
This edition with a new afterword published in Penguin Books 2010
Copyright © Andrew Ross Sork in, 2009, 2010
All rights reserved
PHOTOGRAPH CREDITS
Insert page 1 (top): Lehman Brothers Holdings; (center): Hiroko Masuike/World Picture Network; (bottom): Scott J. Ferrell/Cong ressional Quarterly/Getty Images. Pages 2 (top), 3 (top), and 13 (bottom): Chip Somodevilla/Getty Images News. Pages 2 (center) and 6 (top): © Corbis. Page 2 (bottom): Brendan Smialowski/The New York Times/Redux. Pages 3 (bottom), 4 (top), and 10 (center): United States Department of Treasury. Page 4 (bottom left): Ethan Miller/Getty Images Entertainment. Pages 4 (bottom right), 7 (center right), and 9 (center and bottom): Photographer: Andrew Harrer/Bloomberg. Page 5 (top left): Scott Halleran/Getty Images Sport; (top right): Sullivan & Cromwell; (bottom): Magic Photography. Page 6 (bottom): Keith Waldgrave/Solo/Zuma Press. Page 7 (top); Goldman, Sachs & Co.; (center left): Axel Schmidt/ DDP/Getty Images. Pages 7 (bottom) and 8 (top left and right): J. P. Morgan. Page 8 (bottom): Yoshikazu Tsuno/AFP/ Getty Images. Page 9 (top): Mario Tama/Getty Images News. Page 10 (top): Wachtell, Lipton, Rosen & Katz; (bottom): Reuters. Pages 12 (all) and 14 (bottom): Morgan Stanley. Page 13 (top): Mark Wilson/Getty Images News; (center): Chester Higgins Jr./The New York Times/Redux. Page 14 (top): Win McNamee/Getty Images News. Page 16 (top): Alex Wong/Getty Images News; (bottom): Robert Kindler.
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To my parents, Joan and Larry, and my loving wife, Pilar
Size, we are told, is not a crime. But size may, at least, become noxious by reason of the means through which it was attained or the uses to which it is put.
—Louis Brandeis, Other People’s Money: And How the Bankers Use It, 1913
AUTHOR’S NOTE
This book is the product of more than five hundred hours of interviews with more than two hundred individuals who participated directly in the events surrounding the financial crisis. These individuals include Wall Street chief executives, board members, management teams, current and former U.S. government officials, foreign government officials, bankers, lawyers, accountants, consultants, and other advisers. Many of these individuals shared documentary evidence, including contemporaneous notes, e-mails, tape recordings, internal presentations, draft filings, scripts, calendars, call logs, billing time sheets, and expense reports that provided the basis for much of the detail in this book. They also spent hours painstakingly recalling the conversations and details of various meetings, many of which were considered privileged and confidential.
Given the continuing controversy surrounding many of these events—several criminal investigations are still ongoing as of this writing, and countless civil lawsuits have been filed—most of the subjects interviewed took part only on the condition that they not be identified as a source. As a result, and because of the number of sources used to confirm every scene, readers should not assume that the individual whose dialogue or specific feeling is recorded was necessarily the person who provided that information. In many cases the account came from him or her directly, but it may also have come from other eyewitnesses in the room or on the opposite side of a phone call (often via speakerphone), or from someone briefed directly on the conversation immediately afterward, or, as often as possible, from contemporaneous notes or other written evidence.
Much has already been written about the financial crisis, and this book has tried to build upon the extraordinary record created by my esteemed colleagues in financial journalism, whose work I cite at the end of this volume. But what I hope I have provided here is the first detailed, moment-by-moment account of one of the most calamitous times in our history. The individuals who propel this narrative genuinely believed they were—and may in fact have been—staring into the economic abyss.
Galileo Galilei said, “All truths are easy to understand once they are discovered; the point is to discover them.” I hope I have discovered at least some of them, and that in doing so I have made the often bewildering financial events of the past few years a little easier to understand.