History of Investment Banking

Too Big to Fail Notes

* Treasury Secretary – Hank Paulson (former Goldman CEO)

* Bear Stearns sold to JP Morgan for 2 dollars a share, with Government help

* Dick Fuld CEO Lehman Brothers

* Fuld expects Treasury to help since they helped Bear

* “We’re late, we’re late on everything” – HP

* Lehman passed on Buffett’s bid

* Real Estate Investments is what’s hurting Lehman, they are worth nothing anymore due to dropping house prices and mortgage defaults

* Korean Company interested in buying Lehman

* Lehman wants to spin off toxic assets into separate company and sell good assets to Koreans

* Fannie and Freddie need billions to support itself – Gov eventually takes them over

* Timothy Geinther – Pres of NY Fed

* China has hundreds of billions invested in Fannie and Freddie, reminds Paulson with one call to Moscow they could take down Fannie Freddie, wants Paulson to use “Bazooka” and bail them out.

* Forced into using bazooka to bail out Fannie and Freddie “Truth is a Bazooka isn’t useful unless you use it”

* BOA expects Paulson will write a check to help with buyout of Lehman….

* AIG runs out of cash…. While Lehman and BOA deal is being discussed

* Paulson says “No government money in Lehman deal”

* Chris Cox – SEC Chairman

* Barclays is entering into mix for Lehman, BOA is still preferred buyer from Paulson

* Jamie Dimon – JP Morgan

* Lloyd Blankfein – GS CEO

* John Mack – MS CEO

* John Thain – CEO Merrill

* Vikram Pandit – CEO Citigroup

* “You caused it, you pay for it”- HP

* “They all want the same deal Jaime Dimon got, but they are not going to get it” – CNBC

* ML reaches out to BOA when they realized Lehman is dead and they are going to be next

* Treasury starts to realize AIG is screwed

* Paulson pissed that ML starts talking to BOA, screwing over Lehman

* Jaime Dimon proposes they kick in a billion each to buy toxic assets to stop Lehman from...