Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the FinancialSystem--and Themselves

Farley conceded that there are “a lot of underwater bonds in the banking system and that can pose financial stability risks because banks are leveraged institutions. If it’s levered 10 to 1 and you have a 10 percent loss, all the equity is gone.” Which, of course, is exactly what happened to Bear Stearns, which at times was levered 50 to 1, meaning... See more

In Dallas Bob Crandall was jealous and outraged to learn that United was buying the Pacific division of Pan Am—and that he had never been given the opportunity to bid on it. Crandall could not imagine why he had been entirely cut out. In fact Acker and Gitner had considered shopping the routes to Crandall, whose interest in establishing foreign rou

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The executive said the “cake was already baked well before March 10, when it failed.” Indeed, in the 24 hours before SVB collapsed, Becker told his team the bank had lost $40 billion in deposits in four hours. That’s when a call was set up between Becker, the Fed, the F.D.I.C. and the state of California. “We’re not going to make it,” they were tol... See more

The gamble paid off. Despite Stanford’s success in persuading two institutions to withdraw their oral commitments to Benchmark’s fund, other investors stepped forward and the partners secured the $85 million in institutional capital that they had announced they would raise. At Bob Kagle’s urging, the partners started business by giving their secret

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