![]() This wasn’t weather coming at them, but the consequences of years of untrammeled criminal fraud.īanks like Lehman had lent billions to fly-by-night mortgage mills like Countrywide and New Century. This colorful language – dominoes, a confidence game, an “iceberg,” a “storm” – artfully disguised reality. CEOs panic and they sell out cheap… The street’s running around with its hair on fire, but the storm always passes.” “Real estate always comes back,” he snorts, smugly fixing his tux. The film flashes to Lehman’s Dick “The Gorilla“ Fuld (played by James Woods in kinetic perma-jerk mode), who contrasts their fears with his overconfident weather report: Poor Cynthia Nixon, who plays Treasury spokesperson Michele Davis, is heard responding, “Congress won’t move until we’ve already hit the iceberg.” He quips, early in the mess: “This is a confidence game,” and if Lehman Brothers failed, “all the other banks are gonna drop like dominoes.” In Too Big to Fail, William Hurt plays Treasury Secretary Paulson as a saddened, wearied Atlas. The economy was basically healthy, but fear had caused it to founder on a lack of confidence. When Lehman Brothers failed, the theory held, investors overreacted by freezing all lending, causing more disruptions and more losses. It was even implied that the meltdown was due in part to irrational panic, “ hysteria,” a fear of fear itself. And the operating metaphor for 2008 was a “ thousand-year flood,” a rare and inexplicable accident – something that just sort of happened. In the early days of the crash, reporters were told the crisis particulars were probably too complex for news audiences. In Too Big To Fail, the “superstar” chief of Goldman, Lloyd Blankfein, along with “smart” Jamie Dimon of Chase, “fighter” John Mack of Morgan Stanley, and other titans brokered the deal of deals, just in time to stave off a Mad Max scenario for us all. The legend of that meeting, as immortalized in hagiographic reconstructions like Andrew Ross Sorkin’s Too Big to Fail, is that the tough-minded bank honchos found a way to scrape up just enough cash to steer the debt-comet off course. In the twin collapses of top-five investment bank Lehman Brothers and insurance giant AIG, Wall Street saw a civilization-imperiling ball of debt hurtling its way. The crowd included future Treasury Secretary Timothy Geithner, then-Treasury Secretary (and former Goldman Sachs CEO) Hank Paulson, the representatives of multiple regulatory offices, and the CEOs of virtually every major bank in New York, each toting armies of bean counters and bankers. That was the New York Fed: all hands on deck, peak human panic. Imagine NASA headquarters on the day a giant asteroid careens into the atmosphere. Ten years ago, on Saturday, September 13th, 2008, the world was about to end.
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