PORTFOLIO/PENGUIN THE WEEKEND THAT CHANGED WALL STREET Maria Bartiromo is anchor of CNBC’s Closing Bell (M–F, 3–5 p.m. ET), and anchor and managing editor of the nationally syndicated Wall Street Journal Report with Maria Bartiromo, the most watched financial news program in America. In 1995, Bartiromo became the first journalist to report live from the floor of the New York Stock Exchange. She has covered Wall Street for more than twenty years. She joined CNBC in 1993 after five years as a producer, writer, and assignment editor with CNN Business News. She has received numerous prestigious awards, including a 2008 News and Documentary Emmy for her coverage of the financial collapse. She received a second Emmy Award for her 2009 documentary, Inside The Mind of Google and was awarded a Gracie Award for a special report Greenspan: Power, Money & the American Dream. In 2009, the Financial Times named her one of the “50 Faces That Shaped the Decade.” Bartiromo was inducted into the Cable Hall of Fame Class of 2011, the first journalist to be inducted. She was named a Young Global Leader by the World Economic Forum in 2005. She is the author of several books, including The 10 Laws of Enduring Success and Use the News. Bartiromo writes a monthly column for USA Today. She has written a column for BusinessWeek and Milano Finanza, as well as Individual Investor, Ticker, and Reader’s Digest magazines. She has been published in the Financial Times, Newsweek, Town & Country, Registered Rep, and the New York Post. Bartiromo is a member of the Board of Trustees of New York University. She also serves on the board of the World Economic Forum’s Young Global Leaders. She is a member of the Council on Foreign Relations, the Economic Club of New York, and the Board of Governors of the Columbus Citizens Foundation. Bartiromo graduated from New York University, where she studied journalism and economics. She served as an adjunct professor at NYU Stern School of Business for the fall 2010 semester. Follow Maria on Twitter@mariabartiromo Visit www.mariabartiromo.com The Weekend That Changed Wall Street And How the Fallout Is Still Impacting Our World MARIA BARTIROMO with Catherine Whitney PORTFOLIO / PENGUIN PORTFOLIO / PENGUIN Published by the Penguin Group Penguin Group (USA) Inc., 375 Hudson Street, New York, New York 10014, U.S.A. Penguin Group (Canada), 90 Eglinton Avenue East, Suite 700, Toronto, Ontario, Canada M4P 2Y3 (a division of Pearson Penguin Canada Inc.) Penguin Books Ltd, 80 Strand, London WC2R 0RL, England Penguin Ireland, 25 St. Stephen’s Green, Dublin 2, Ireland (a division of Penguin Books Ltd) Penguin Books Australia Ltd, 250 Camberwell Road, Camberwell, Victoria 3124, Australia (a division of Pearson Australia Group Pty Ltd) Penguin Books India Pvt Ltd, 11 Community Centre, Panchsheel Park, New Delhi – 110 017, India Penguin Group (NZ), 67 Apollo Drive, Rosedale, Auckland 0632, New Zealand (a division of Pearson New Zealand Ltd) Penguin Books (South Africa) (Pty) Ltd, 24 Sturdee Avenue, Rosebank, Johannesburg 2196, South Africa Penguin Books Ltd, Registered Offices: 80 Strand, London WC2R 0RL, England First published in the United States of America by Portfolio Penguin, a member of Penguin Group (USA) Inc. 2010 This paperback edition with a new epilogue published 2011 Copyright © Maria Bartiromo, 2010, 2011 All rights reserved THE LIBRARY OF CONGRESS HAS CATALOGED THE HARDCOVER EDITION AS FOLLOWS: Bartiromo, Maria. The weekend that changed Wall Street : an eyewitness account / Maria Bartiromo, with Catherine Whitney. p. cm. Includes bibliographical references and index. ISBN: 978-1-101-54741-0 1. Financial crises—United States—History—21st century. 2. Bank failures—United States—History—21st century. 3. Investment banking—United States—History—21st century. 4. Global Financial Crisis, 2008–2009. I. Whitney, Catherine. II. Title. HB3722.B375 2010 330.973’0931—dc22 2010026892 Designed by Jaime Putorti Title page image courtesy of istockphoto.com Except in the United States of America, this book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent, resold, hired out, or otherwise circulated without the publisher’s prior consent in any form of binding or cover other than that in which it is published and without a similar condition including this condition being imposed on the subsequent purchaser. The scanning, uploading, and distribution of this book via the Internet or via any other means without the permission of the publisher is illegal and punishable by law. Please purchase only authorized electronic editions and do not participate in or encourage electronic piracy of copyrightable materials. Your support of the author’s rights is appreciated. Dedicated to the next generation… Emerging from colleges and business schools across America, to take your place in a system that is challenged but still great. Learn from our mistakes, with wisdom, creativity, humility, and integrity. CONTENTS INTRODUCTION Eyewitness to the Crisis PROLOGUE Riding High Before the Fall ONE Nightmare on Liberty Street TWO The Bubble Machine THREE Zombies at Lehman FOUR Down to the Wire FIVE Death Sentence and Champagne SIX Fallout SEVEN Popcorn and Dominoes EIGHT The Aftershocks NINE A Greek Tragedy TEN Capitalism in the Balance Epilogue Acknowledgments Notes Index INTRODUCTION Eyewitness to the Crisis Every weekday I broadcast my show Closing Bell from the floor of the New York Stock Exchange. The air inside the NYSE is electric. The pace can be frantic, especially as we approach the ringing of the closing bell at 4:00 p.m. As I watch the traders hunched over their terminals and listen to the dull roar of their voices in the background, I feel a sense of awe. I am standing at the apex of the world’s financial system. Everything that happens on the Big Board has consequences for billions of people, and I get to witness it all. I realized long ago that what takes place at the NYSE is more about humans than about numbers. I know many people’s eyes glaze over when they think about the financial system. It feels so abstract and unwieldy. The jargon alone is difficult to master—puts and calls, market makers, derivatives. But in the aftermath of the collapse of Wall Street that occurred in September 2008, people did understand that the value of their homes declined precipitously, that their retirement plans bled money, that their jobs were less secure, that their retail customers had disappeared, that business and home loans were no longer available. They saw that because of the actions of some of America’s largest financial firms, their own
