Nearly 100 years after its creation, the power of the U.S. Federal Reserve has never been greater. Markets and governments around the world hold their breath in anticipation of the Fed ... See full summary »
A close look behind the scenes, between late March and mid-October, 2008: we follow Richard Fuld's benighted attempt to save Lehman Brothers; conversations among Hank Paulson (the Secretary of the Treasury), Ben Bernanke (chair of the Federal Reserve), and Tim Geithner (president of the New York Fed) as they seek a private solution for Lehman's; and, back-channel negotiations among Paulson, Warren Buffet, investment bankers, a British regulator, and members of Congress as almost all work to save the U.S. economy. By the end, with the no-strings bailout arranged, modest confidence restored on Wall Street, and a meltdown averted, Paulson wonders if banks will lend. Written by
I hate to do this right now, but I'm going to have to have a press call first thing, and I don't know what I'm going to tell them.
Okay, here's how you explain it. Wall Street started bundling home loans together - mortgage-backed securities - and selling slices of those bundles to investors, and they were making big money. So they started pushing the lenders saying, come on, we need more loans.
The lenders had already given loans to borrowers with good credit, so they go bottom feeding, they ...
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