Lehman Brothers collapse: Hank Paulson’s diary

Former Treasury Secretary Hank
Paulson.
Getty
Images

• Saturday marks exactly 10 years since the collapse of
  Lehman Brothers, the biggest bankruptcy in the history of the
  United States, and the defining event of the financial
  crisis.
• The days after Lehman’s collapse were a frantic
  scramble to prevent the collapse of the whole financial
  system.
• At the heart of that scramble was Henry “Hank” Paulson,
  the then-US Treasury Secretary.
• An extract from Paulson’s calendar two days after
  Lehman’s collapse so just how hectic things were.
• Paulson had 42 calls or meetings between 7.00 a.m. and
  1.20 p.m. on September 17, 2008.

Exactly 10 years ago, Lehman Brothers collapsed into
administration. It was the biggest bankruptcy in the history of
the United States and
the defining event of the financial crisis, which ravaged the
global economy between 2007 and 2009.

Lehman’s bankruptcy sparked genuine fears in the US that the
country’s entire financial system could collapse. It led to a
crazy scramble by senior bankers and politicians to insulate the
industry, and the wider economy, from the threat of contagion.

One of the most crucial figures during this period was Henry
“Hank” Paulson, the United States Treasury Secretary. He was the
most senior politician with responsibility for the financial
industry and the conduit between the US government and big banks.

Lehman collapsed on September 15, and Paulson’s schedule in the
days following provides a glimpse into the chaos

The schedule, printed in Andrew Ross Sorkin’s epic account of the
crisis, Too Big To Fail, reveals just how crazily busy and hectic
the days around Lehman’s collapse were. Paulson, who was Treasury
Secretary between 2006 and 2009, took a staggering 42 calls and
meetings between 7.10 a.m. and 1.20 p.m, and a total of 69 over
the course of the entire day.

Those calls included one to then-President George Bush, several
to Federal Reserve Chair Ben Bernanke, and New York Fed head Tim
Geithner, as well as conversations with Lehman CEO Dick Fuld,
Goldman Sachs boss Lloyd Blankfein, and JPMorgan’s Jamie Dimon.

“Paulson’s calendar and call log illustrates the frantic
scramble,” Sorkin wrote underneath the schedule, noting as well
that the log “does not reflect calls on his cell phone or home
phone.”

Check it out below, with the first half of the day reproduced in
full:

• 7.10 a.m. to 7.20 a.m. — Call from President George W.
  Bush
• 7.20 to 7.40 — Call from Tim Geithner, New York Federal
  Reserve Chairman
• 7.40 to 7.45 — Call to Jamie Dimon, JPMorgan
  CEO
• 7.45 to 7.50 — Call from Sheila Bair, Chair of the
  Federal Deposit Insurance Corporation
• 7.50 to 8.00 — Call to Tim Geithner
• 8.15 to 8.20 — Call to Dick Fuld, Lehman Brothers
  CEO
• 8.20 to 8.30 — Call to Jamie Dimon
• 8.30 to 8.35 — Call to Chris Cox, Securities and
  Exchanges Commission Chairman
• 8.35 to 8.50 — Staff Meeting, Secretary’s Large
  Conference Room
• 8.50 to 9.05 — Call to Congressman Steny Hoyer
• 9.05 to 9.10 — Call to Federal Reserve Chair Ben
  Bernanke
• 9.10 to 9.15 — Call to Lloyd Blankfein, Goldman Sachs
  CEO
• 9.15 to 9.20 — Call to Chris Cox
• 9.20 to 9.30 — Call with Russian Finance Minister
  Alexei Kudrin
• 9.30 to 9.50 — Drop by Ken’s [adviser Ken Wilson] meeting with Richard Davis, President and CEO of US Bancorp,
  and Andy Cecere, CFO and Vice Chairman
• 9.50 to 10.05 — Call to Ben Bernanke
• 10.05 to 10.10 — Call to Tim Geithner
• 10.10 to 10.20 — Call to Chris Cox
• 10.20 to 10.25 — Call to Tim Geithner
• 10.25 to 10.30 — Call to Senator Richard
  Shelby
• 10.30 to 10.35 — Call to Senator Chris Dodd
• 10.35 to 10.40 — Call to Congressman Barney
  Frank
• 10.40 to 10.45 — Call to Congressman Spencer
  Bachus
• 10.45 to 10.50 — Call to Congressman John
  Boehner
• 10.50 to 10.55 — Call to Josh Bolten, President Bush’s
  chief of staff
• 10.55 to 11.00 — Call to Congressman Barney
  Frank
• 11.00 to 11.05 — Call to Ed Herlihy, a lawyer at
  Wachtell, Lipton, Rosen & Katz
• 11.05 to 11.15 — Call to Congressman John
  Boehner
• 11.30 to 12.00 — Phone interview with Greg Ip of The
  Economist
• 12.05 p.m. to 12.10 p.m. — Call to Josh Bolten
• 12.10 to 12.15 — Call to Chris Cox
• 12.15 to 12.20 — Calls to Lloyd Blankfein and Tim
  Geithner
• 12.20 to 12.25 — Call to Ben Bernanke
• 12.25 to 12.30 — Call from John Thain, Merrill Lynch
  CEO
• 12.30 to 12.40 — Call to Ben Bernanke
• 12.40 to 12.50 — Call to Chris Dodd
• 12.50 to 12.55 — Call to Ben Bernanke
• 12.55 to 1.00 — Economic Principals Lunch, Ward Room,
  White House
• 1.00 to 1.05 — Call to Chris Cox
• 1.05 to 1.10 — Call to John Mack, Morgan Stanley
  CEO
• 1.10 to 1.15 — Call to Tim Geithner
• 1.15 to 1.20 — Call to Senator Richard Shelby