In the ‘Notes and Sources’ section of Andrew Ross Sorkin’s bestseller, Too Big To Fail, the New York Times financial writer and columnist details the extraordinary access he was given about the events of the Lehman Weekend—that is, the two days in mid-September 2008 in which the investment bank Lehman Brothers filed for bankruptcy, Merrill Lynch was sold to Bank of America, and insurance giant AIG nearly collapsed.
“One CEO, whom I have known for several years, arrived at our first meeting with meticulous handwritten notes,” writes Sorkin. “‘I’m giving you them for the same reason I took them,’ he explained. ‘This was history in the making.'” While Sorkin’s gripping narrative not only illuminates the minute-by-minute details of the weekend, but also the lead-up to the events that nearly cratered the U.S. economy, his book wasn’t the first account to highlight the minute particulars and nuances of how close the nation came to another Great Depression—that would be James B. Stewart’s ‘Eight Days,’ which was published in the New Yorker about a month before Sorkin’s book debuted.
While Stewart’s reporting isn’t as encompassing as Sorkin’s, which is understandable given the level of access that Sorkin possessed — sources provided videotaped recordings of internal meetings as well as illustrations documenting the seating arrangement of fateful meetings — Stewart deftly navigated the topsy-turvy nature of a 72 hour period that has since afflicted multiple generations. The genius of ‘Eight Days’ is how seamlessly Stewart weaves weighty material into a feature of how Wall Street nearly broke America.
Referring to a Lehman failure, the Treasury official said, “We knew it would be awful.” At the same time, after months of turmoil, anyone still owning Lehman stock or commercial paper had to be considered a speculator. Perhaps investors would stop assuming that the government would bail out every wayward financial institution and adjust their risk-taking accordingly. “Everybody in some part of their brain thought it was a good thing for Lehman Brothers to go under,” the Treasury official said. “Was this ten per cent of the brain? I don’t know. . . . But the thought was there somewhere.”
At noon, Steven Shafran, a senior adviser at the Treasury, text-messaged his colleagues, “We lost the patient.”