Bailout Nation (49 page)

4
Time line of major events since Citigroup and Travelers merged in 1998, Citibank North America web site,
www.citigroup.com/citi/corporate/history/citigroup.htm
.

5
“History of the Eighties—Lessons for the Future: Continental Illinois and ‘Too Big to Fail,'” Division of Research and Statistics, Federal Deposit Insurance Corporation, December 1997,
www.fdic.gov/bank/historical/history/235_258.pdf
.

6
Jonathan Fuerbringer, “Talking Deals: Citicorp Strategy on Glass-Steagall,”
New York Times
, March 23, 1989,
http://query.nytimes.com/gst/fullpage.html?res=950DE2D81F39F930A15750C0A96F948260

7
Robert Kuttner, “Friendly Takeover,”
American Prospect
, March 18, 2007,
www.prospect.org/cs/articles?articleId=12573
.

8
Ibid.; see also “Rubin Calls for Modernization through Reform of Glass -Steagall Act,”
Journal of Accountancy
, May 1, 1995,
www.allbusiness.com/government/business-regulations/500983-1.html
; Ken Brown and David Enrich, “Rubin, under Fire, Defends His Role at Citi,”
Wall Street Journal
, November 29, 2008,
http://online.wsj.com/article/SB122791795940965645.html

9
Stephen Labaton, “Congress Passes Wide-Ranging Bill Easing Bank Laws,”
New York Times
, November 5, 1999,
www.nytimes.com/1999/11/05/business/congress-passes-wide-ranging-bill-easing-bank-laws.html
.

10
“The S&L Crisis: A Chrono-Bibliography,” FDIC web site,
www.fdic.gov/bank/historical/s&l/
.

11
Eric Dash and Julie Creswell, “Citigroup Saw No Red Flags Even as It Made Bolder Bets,”
New York Times
, November 22, 2008,
www.nytimes.com/2008/11/23/business/23citi.html
; see also Eric Dash, “Citigroup Acknowledges Poor Risk Management,”
New York Times
, October 16, 2007,
www.nytimes.com/2007/10/16/business/16citi.html
.

12
Dash and Creswell, “Citigroup Saw No Red Flags.”

13
Shannon D. Harrington and Elizabeth Hester, “Citigroup Rescues SIVs with $58 Billion Debt Bailout,”
Bloomberg
, December 14, 2007,
www.bloomberg. com/apps/news?pid=20601087&refer=home&sid=aS0Dm.iV5BCI
see also “Citigroup Cuts SIV Size by $15 Billion,” Reuters, December 11, 2007,
www.reuters.com/article/ousiv/idUSL1111435920071211
George White, “Citigroup Finishes Winding Down SIVs,”
The Deal
, November 19, 2008,
www.thedeal.com/dealscape/2008/11/citigroup_finishes_winding_dow.php
; “Citi Finalizes SIV Wind-Down by Agreeing to Purchase All Remaining Assets,” Citigroup press release, November 19, 2008,
www.citigroup.com/citi/press/2008/081119a.htm
.

14
Hugo Dixon and Robert Cyran, “Vikram Pandit Scores a Great Deal for Citigroup,”
New York Times
, December 2, 2008,
www.nytimes.com/2008/12/03/business/economy/03views.html
.

15
Barry Ritholtz, “Actual Merrill CDO Sale: 5.47 Percent on the Dollar,”
The Big Picture
, July 29, 2008,
http://bigpicture.typepad.com/comments/2008/07/merrill-writedo.html
.

16
“Visa History,” Visa web site,
http://corporate.visa.com/av/about_visa/corp_history.jsp
.

17
“The Making of the Bank of America,”
Fortune
, September 5, 2005,
http://money.cnn.com/magazines/fortune/fortune_archive/2005/09/05/8271409/index.htm
.

18
Barry Ritholtz, “Citi & BofA Ain't No Continental Illinois Bank,”
The Big Picture
, February 24, 2009,
www.ritholtz.com/blog/2009/02/citi-bofa-aint-continental-illinois-bank/
.

19
“Bylaws, Board of Directors,” Federal Reserve Bank of New York, December 20, 2007,
www.newyorkfed.org/aboutthefed/ny_bylaws.html
.

20
“Fact Sheet: Proposed Treasury Authority to Purchase Troubled Assets,” U.S. Treasury press release, September 20, 2008,
www.treas.gov/press/releases/hp1150.htm
; see also “Statement by Secretary Henry M. Paulson, Jr. on Treasury and Federal Housing Finance Agency Action to Protect Financial Markets and Taxpayers,” September 7, 2008,
http://treasury.gov/press/releases/hp1129.htm
.

21
“Paulson TARP proposal,” U.S. Treasury press release, September 20, 2008.

22
Alex Johnson, “Bush Signs $700 Billion Financial Bailout Bill,”
MSNBC.com
, October 3, 2008,
www.msnbc.msn.com/id/26987291/
.

23
Ibid.

24
Mark Landler and Eric Dash, “Drama Behind a $250 Billion Banking Deal,”
New York Times
, October 14, 2008,
www.nytimes.com/2008/10/15/business/economy/15bailout.html
.

25
Ibid.

26
Peter S. Goodman and Gretchen Morgenson, “Saying Yes, WaMu Built Empire on Shaky Loans,”
New York Times
, December 27, 2008,
www.nytimes.com/2008/12/28/business/28wamu.html
; see also Greg Morcroft, “J.P. Morgan Pondering Buyout of Washington Mutual,” January 11, 2008,
www.marketwatch.com/news/story/jp-morgan-pondering-buyout-Washington/story.aspx?guid=percent7B89CA2071-2631-42C6-8936-22E745A3B6DA
percent7D.

27
Binyamin Appelbaum, “After Change in Tax Law, Wells Fargo Swoops In,”
Washington Post
, October 4, 2008, A01,
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100301042.html?sub=AR
.

28
Landler and Dash, “Drama.”

29
Mark Pittman, Bob Ivry, and Alison Fitzgerald, “Fed Defies Transparency Aim in Refusal to Disclose,”
Bloomberg
, November 10, 2009,
www.bloomberg.com/apps/news?pid=20601087&sid=ahdVHk_Ccoeg&
.

30
Mark Pittman, “Bloomberg Sues Fed to Force Disclosure of Collateral (Update 1),”
Bloomberg
, November 7, 2009,
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKr.oY2YKc2g
.

31
John Carney, “TARP Trouble: GAO Report Rips Internal Controls, Bank Monitoring,” Yahoo! Tech Ticker, December 3, 2008,
http://finance.yahoo.com/tech-ticker/article/138232/TARP-Trouble
:-GAO-Report-Rips -Internal-Controls,-Bank-Monitoring.

32
Amit R. Paley, “A Quiet Windfall for U.S. Banks: With Attention on Bailout Debate, Treasury Made Change to Tax Policy,”
Washington Post
, November 10, 2008, A01,
www.washingtonpost.com/wp-dyn/content/article/2008/11/09/AR2008110902155_pf.html
.

33
Albert Bozzo, “Obama's Toxic-Asset Plan: End-Run around Congress?”
CNBC.com
, March 25, 2009,
www.cnbc.com/id/29863145
.

34
Felix Salmon, “How to Conjure Up $500 Billion,”
New York Times
, March 26, 2009,
www.nytimes.com/2009/03/27/opinion/27salmon.html
.

35
Alan Greenspan, “The Fed Didn't Cause the Housing Bubble: Any New Regulations Should Help Direct Savings toward Productive Investments,”
Wall Street Journal
, March 11, 2009,
http://online.wsj.com/article/SB123672965066989281.html

1
Joseph Stiglitz, “The Economic Crisis: Capitalist Fools,”
Vanity Fair
, January 2009,
www.vanityfair.com/magazine/2009/01/stiglitz200901
.

2
Edmund L. Andrews, “Greenspan Concedes Error on Regulation,”
New York Times
, October 23, 2008,
www.nytimes.com/2008/10/24/business/economy/24panel.html
.

3
Benjamin Disraeli,
Sybil
, Book IV, Chapter V.

4
Eric Lipton and Stephen Lebaton, “A Deregulator Looks Back, Unswayed,”
New York Times
, November 16, 2008,
www.nytimes.com/2008/11/17/business/economy/17gramm.html
.

5
Ken Brown and David Enrich, “Rubin, Under Fire, Defends His Role at Citi,”
Wall Street Journal
, November 29, 2008,
http://online.wsj.com/article/SB122791795940965645.html

6
Jonathan Fuerbringer, “Talking Deals: Citicorp Strategy on Glass-Steagall,”
New York Times
, March 23, 1989,
http://query.nytimes.com/gst/fullpage.html?res=950DE2D81F39F930A15750C0A96F948260

7
Alan Katz and Ian Katz, “Greenspan Slept as Off-Books Debt Escaped Scrutiny,”
Bloomberg
, October 20, 2008,
www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=aYJZOB_gZi0I
.

8
Matt Apuzzo, “US Diluted Loan Rules before Crash,” Associated Press, December 1, 2008,
www.google.com/hostednews/ap/article/ ALeqM5hTDPY8hFtJLxsv8i1Q7OvoRrlYrQD94PQ0JO0

9
Ibid.

10
Eric Stein, “Turmoil in the U.S. Credit Markets: The Genesis of the Current Economic Crisis,” testimony before the Senate Committee on Banking, Housing, and Urban Affairs, October 16, 2008,
www.responsiblelending.org/policy/testimony/turmoil-in-the-u-s-credit-markets-the-genesis-of-the-current-economic-crisis.htm
.

11
Ibid.

12
“Confronting Economic Meltdown,” New America Foundation,
www.newamerica.net/events/2008/confronting_economic_meltdown
.

13
Jason Niss, “Harvey Pitt: Accounts Angel Who Supped with the Devil,”
UK Independent
, August 11, 2002,
www.independent.co.uk/news/business/analysis-and-features/harvey-pitt-accounts-angel-who-supped-with-the-devil-639450.html
.

14
Simon English, “U.S. Watchdog Under Fire,”
The Telegraph
, May 20, 2002,
http://www.telegraph.co.uk/finance/2763231/US-watchdog-under-fire.html
.

15
Arianna Huffington, “The SEC Goes AWOL,”
Salon
, May 14, 2002,
http://archive.salon.com/news/col/huff/2002/05/14/sec/print.html
.

16
John McCain, “The Free Market Needs New Rules,”
New York Times
, July 8, 2002,
http://query.nytimes.com/gst/fullpage.html?res=9B00E3D61031F93BA35754C0A9649C8B63

17
Dana Parson, “An Ironic Twist in the Tale of SEC's Christopher Cox,”
Los Angeles Times
, January 30, 2009,
www.latimes.com/news/local/la-me-parsons30-2009jan30,0,3244574.column
.

18
Doug Kass, “Madoff Was Made Up,”
TheStreet.com
, December 12, 2008,
www.thestreet.com/story/10452909/1/kass-madoff-was-made-up.html
.

19
Kara Scannell, “Madoff Chasers Dug for Years, to No Avail,”
Wall Street Journal
, January 5, 2009,
http://online.wsj.com/article/SB123111743915052731
.html

20
Congressional testimony of Harry Markopolos before the U.S. House of Representatives Committee on Financial Services, February 4, 2009,
http://online.wsj.com//files/09/77/40/f097740/public/resources/documents/MarkopolosTestimony20090203 .pdf

21
Alex Spillius, “Sir Allen Stanford Refuses to Testify in Fraud Probe,”
Telegraph
, March 12, 2009,
www.telegraph.co.uk/finance/4976280/Sir-Allen-Stanford-refuses-to-testify-in-fraud-probe.html
.

22
Mara Der Hovanesian, “Nightmare Mortgages,”
BusinessWeek
, September 11, 2006,
www.businessweek.com/magazine/content/06_37/b4000001.htm
.

23
Floyd Norris, “Trump Sees Act of God in Recession,”
New York Times
, December 4, 2008,
www.nytimes.com/2008/12/05/business/05norris.html
.

24
Tyler Cowen, “So We Thought. But Then Again
. . .
,”
New York Times
, January 13, 2008,
www.nytimes.com/2008/01/13/business/13view.html
.

25
Aaron Lucchetti and Serena Ng, “How Rating Firms' Calls Fueled Subprime Mess,”
Wall Street Journal
, August 15, 2007,
http://online.wsj.com/article/SB118714461352698015.html

26
Ibid.

27
Stiglitz, “Economic Crisis.”

28
Testimony of Deven Sharma, president, Standard & Poor's, remarks before the United States House of Representatives Committee on Oversight and Government Reform, October 22, 2008,
http://oversight.house.gov/documents/20081022125052.pdf
.

29
Jeffrey McCracken, “Moody's Aims to Be Ahead on Defaults,”
Wall Street Journal
, March 10, 2009,
http://online.wsj.com/article/SB123664643956778537 .html
www.bloomberg.com/apps/news?pid=20601109&sid=ah839IWTLP9s&#
.

30
Matthew Haggman, Rob Barry, and Jack Dolan, “Thousands with Criminal Records Work Unlicensed as Loan Originators,”
Miami Herald
, July 20, 2008,
www.miamiherald.com/static/multimedia/news/mortgage/originators.html
; also, Jack Dolan, Rob Barry, and Matthew Haggman, “Ex-Convicts Active in Mortgage Fraud,”
Miami Herald
, July 20, 2008,
www.miamiherald.com/static/multimedia/news/mortgage/brokers.html
.

31
Brad Linder, “Arizona Bans Zillow from Offering Real Estate Estimates,” April 17, 2007,
www.downloadsquad.com/2007/04/17/arizona-bans-zillow-from-offering-real-estate-estimates/
.

1
Roger Lowenstein, “Who Needs the Mortgage-Interest Deduction?”
New York Times
, March 5, 2006,
www.nytimes.com/2006/03/05/magazine/305deduction.1.html
.

2
Edward L. Glaeser and Jesse M. Shapiro, “The Benefits of the Home Mortgage Interest Deduction,” Harvard University Discussion Paper 1979, October 2002,
http://post.economics.harvard.edu/hier/2002papers/2002list.html
.