All the Presidents' Bankers (95 page)

99
. “Venezuela’s Creditors Are Unlikely to Agree,”
New York Times,
July 29, 1989, at
www.nytimes.com/1989/07/29/opinion/l-venezuela-s-creditors-are-unlikely-to-agree-329689.html
. See also “Brady to the Banks: Stop Stonewalling,”
New York Times,
July 21, 1989, at
www.nytimes.com/1989/07/21/opinion/brady-to-the-banks-stop-stonewalling.html
.

100
. Willard C. Butcher, “Venezuela’s Creditors Are Unlikely to Agree” (letter),
New York Times,
July 25, 1989.

101
. “Venezuelan Debt Payment,”
New York Times,
October 7, 1989, at
www.nytimes.com/1989/10/07/business/venezuelan-debt-payment.html
.

102
. Butcher, “Venezuela’s Creditors Are Unlikely to Agree.”

103
. The senators were Christopher Bond, Orrin Hatch, Larry Pressler, Bob Dole, and Trent Lott.

104
. Letter from five senators to major American banks urging their cooperation with Venezuela debt restructuring, December 18, 1989, WHORM, General FO-004-02, Folder: Loans–Funds, Bush Library. The other bankers were Walter Shipley, chairman of Chemical Bank; Charles Sanford Jr. of Bankers Trust; John McGillicuddy, chairman and CEO of Manufacturers Hanover Trust; and Barry Sullivan, chairman of First Chicago.

105
. Rowen, “Is it Time for a Debt Czar?”

106
. Paul Craig Roberts, “Beneath the ‘Twin Towers of Debt,’”
Wall Street Journal,
October 28, 1986, Folder: Paul Craig Roberts [2 of 2], Reagan Library.

107
. Ibid.

108
. Curry and Shibut, “The Cost of the Savings and Loan Crisis.”

Chapter 17. The Early to Mid-1990s: Killer Instinct, Bank Wars, and the Rise of Goldman Sachs

1
. Alan Greenspan, “The Challenge of Central Banking in a Democratic Society,”
Federal Reserve Board,
December 5, 1996, at
www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm
.

2
. Document 142712, May 26, 1990, Presidential Files, WHORM FG 001-07, Bush Library.

3
. Document 201298, June 9, 1990, WHORM, FI 002, Bush Library. See also
www.hks.harvard.edu/about/faculty-staff-directory/roger-porter
.

4
. Document 140558CU, Letter to C. Boyden Gray from John G. Aldridge, May 7, 1990, WHORM, BE Box 4, Folder 302736 [2], Bush Library.

5
. Ibid.

6
. Mark D. Fefer, Wilton Woods, and John Labate, “Favorite S&L Felonies,”
CNN Money,
November 5, 1990, at
money.cnn.com/magazines/fortune/fortune_archive/1990/11/05/74309/index.htm
.

7
. Justice Department Release, “How Prosecutions Have Fared in S&L Area During Past Two Years,” White-Collar Crime Reporter 17, September 6, 1990.

8
. Barnaby J. Feder, “Chase Manhattan to Cut 5,000 Jobs and Trim Dividend,”
New York Times,
September 22, 1990.

9
. Michael Quint, “Citicorp Sees Payout Likely Again by 1994,”
New York Times,
October 9, 1992.

10
. John Authers, “Engineer Behind the Bank’s Global Quest,”
Financial Times,
April 14, 1998.

11
. Robert Lenzner, “N.Y. Banks’ Bailout Proposal Would Buy Time for Trump,”
Boston Globe,
June 12, 1990.

12
. “Forgive and Forget (Brazil’s Debt),”
The Economist,
September 1, 1990.

13
. Robert Guenther and Douglas R. Sease, “Chase Manhattan’s Labrecque, Ryan Face Investors’ ‘Show-Me Attitude,’”
Wall Street Journal,
June 29, 1990.

14
. Michael Quint, “Chase to Consider Ties to Non-Bank Partners,”
New York Times,
October 23, 1990.

15
. Louise Glass, “Taking Stock (and Other Securities),”
ABA Banking Journal,
1990.

16
. US Senate, Daily Digest, April 3, 1990, Topic: Financial Service Industry, Congressional Record, 101st Congress, at
http://thomas.loc.gov/cgi-bin/query/B?r101:@FIELD(FLD003+d)+@FIELD(DDATE+19900403)
.

17
. Michael Quint, “Regulatory Shift Allows U.S. Banks to Trade Stocks,”
New York Times,
September 21, 1990, at
www.nytimes.com/1990/09/21/business/regulatory-shift-allows-us-banks-to-trade-stocks.html?pagewanted=all&src=pm
. In March 1991, J. P. Morgan underwrote a $56 million equity issue by AMSCO International, the first common stock underwriting by a commercial bank since the Glass-Steagall Act.

18
. Document 213358, February 5, 1991, WHORM, FI 002, Bush Library.

19
. Steve Lohr, “Banking’s Real Estate Miseries,”
New York Times,
January 13, 1991.

20
. Robert J. McCartney. “Citicorp’s Earnings Fall 81%; Profits Also Decline at 4 Other Big Banks,”
Washington Post,
April 17, 1991.

21
. “White House Threat on Banking Bill,”
New York Times,
September 18, 1991.

22
. “Federal Reserve Bulletin,”
St. Louis Federal Reserve
75, no. 5 (1987), at
http://fraser.stlouisfed.org/docs/publications/FRB/1980s/frb_051987.pdf
and
http://fraser.stlouisfed.org/docs/publications/FRB/1980s/frb_111984.pdf
.
See also Hobart Rowen, “Conable Says He’ll Retire as World Bank President; Bush to Name Lewis T. Preston as Successor,”
Washington Post,
March 7, 1991.

23
. Lewis Thomas Preston, “World Bank Archives,” at
http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/EXTARCHIVES/0,,contentMDK:20505265~pagePK:36726~piPK:437378~theSitePK:29506,00.html
. See also “Banks Led Way in Easing Crisis on Mexican Debt,”
Los Angeles Times,
January 10, 1998, at
http://articles.latimes.com/1988-01-10/business/fi-34708_1_commercial-bank
.

24
. Hobart Rowen, “Preston Facing Big Job As Head of World Bank,”
Washington Post,
March 17, 1991.

25
. Preston, “World Bank Archives.”

26
. Stephen Labaton, “Wall Street’s Ambitious Top Cop,”
New York Times,
March 24, 1991.

27
. Ivan C. Roten and Donald J. Mullineaux, “Debt Underwriting by Commercial Bank-Affiliated Firms and Investment Banks: More Evidence,”
Journal of Banking and Finance,
November 27, 2000, at
http://pages.stern.nyu.edu/~eofek/InvBank/papers/DebtUnder_JBF.pdf
. Section 20 of the Glass-Steagall Act prohibited banks from affiliating with companies “engaged principally” in the underwriting or dealing with securities.

28
. Labaton, “Wall Street’s Ambitious Top Cop.”

29
. Ronald Reagan, “Remarks at a Republican Party Fundraising Dinner in Houston, Texas,” September 22, 1998, American Presidency Project, at
www.presidency.ucsb.edu/ws/index.php?pid=34876
.

30
. Document 15164001-159070, WHORM, BE Box 2, Folder BE 000, Bush Library.

31
. Ibid.

32
. Ibid.

33
. Document 241932, From Robert T. Swanson, April 12, 1991, WHORM, FI 002, Box 12, Bush Library.

34
. US Commodity Futures Trading Commission, “E9-6187,” Law & Regulation: Proposed Rules, March 24, 2009, at
www.cftc.gov/LawRegulation/FederalRegister/ProposedRules/e9–6187
.

35
. Robert Barone, “Commodity Bubble Redux in Full Effect,”
Forbes,
April 25, 2011.

36
. George W. Bush, “Statement on Signing the Futures Trading Practices Act of 1992,” October 28, 1992, American Presidency Project, at
www.presidency.ucsb.edu/ws/index.php?pid=21696
.

37
. Stephen A. Rhoades, “Bank Mergers and Industry Wide Structure,”
Board of Governors of the Federal Reserve System,
January 1996, 6, at
www.federalreserve.gov/pubs/staffstudies/1990–99/ss169.pdf
.

38
. “Manufacturers Hanover, Chemical Banks to Merge Transaction, Biggest Ever in Industry, Worth $2 Billion,”
Post-Tribune
(Indiana), July 16, 1991.

39
. Eric Dash, “John F. McGillicuddy, 78, Banking Leader,”
New York Times,
January 6, 2009. See also “Executive Changes,”
New York Times,
February 18, 1988.

40
. Lawrence Malkin, “Hanover Swaps Stock with Chemical: Banks Join to Form 2d Biggest in U.S. Manufacturers,”
New York Times,
July 16, 1991.

41
. Transcript of the announcement, “Special Report: The Engagement of Chemical and Manufacturers Hanover,”
American Banker,
July 16, 1991.

42
. Malkin, “Hanover Swaps Stock with Chemical.” See also “Manufacturers Hanover, Chemical Banks to Merge.”

43
. Malkin, “Hanover Swaps Stock with Chemical.”

44
. Ibid.

45
. Bill Clinton,
My Life
(New York, NY: Alfred A. Knopf, 2004), 377.

46
. Charles R. Babcock, “Both Parties Raise Millions in ‘Soft Money’; Campaign Laws Let CEOs, Companies, Unions Donate Big Checks,”
Washington Post,
July 26, 1992.

47
. Open Secrets, Center for Responsive Politics, “Mortgage Bankers & Brokers: Long-Term Contribution Trends,” February 18, 2013, at
www.opensecrets.org/industries/totals.php?ind=F4600
.

48
. Ibid.

49
. “Bill Clinton: The Terror and Toast of Wall Street,”
BusinessWeek,
April 5, 1992, at
www.businessweek.com/stories/1992-04-05/bill-clinton-the-terror-and-toast-of-wall-street
. Attendees included Kohlberg Kravis Roberts & Company partner Theodore Ammon, Bloomberg Financial Markets president Michael Bloomberg, and Lazard Freres & Company partner Peter Tufo.

50
. Phillip Inman, “Black Wednesday 20 Years On: How the Day Unfolded,”
Guardian,
September 13, 2012.

51
. “2005 Freedom of Information Requests—The Cost of Black Wednesday Reconsidered,”
HM Treasury,
August 6, 1997, at
www.hm-treasury.gov.uk/foi_erm4_2005.htm
.

52
. George Soros, Byron Wien, and Krisztina Koenen,
Soros on Soros: Staying Ahead of the Curve
(New York, NY: J. Wiley, 1995).

53
. Ibid., 81.

54
. Thomas Jaffe and Dyan Machan, “How the Market Overwhelmed the Central Banks,”
Forbes,
November 9, 1992.

55
. “1992 Presidential Election,” American Presidency Project, at
www.presidency.ucsb.edu/showelection.php?year=1992
.

56
. Tyson Slocum, “Blind Faith: How Deregulation and Enron’s Influence Over Government Looted Billions from Americans,”
Public Citizen,
December 2001.

57
. Sandy Weill entry on “Forbes List,”
Forbes,
at
www.forbes.com/lists/2006/10/HRFZ.html
.

58
. Chris Jones, “Wall Street Legends: Sandy Weill,”
Here Is the City,
at
http://hereisthecity.com/2011/05/11/wall-street-legends-no-14-sandy-weill/
.

59
. Pat Widder, “Drexel Sells Half of Its Retail Units,”
Chicago Tribune,
April 26, 1989, at
http://articles.chicagotribune.com/1989-04-26/business/8904070433_1_drexel-burnham-lambert-smith-barney-retail-units
.

60
. Leah Nathans Spiro, “Smith Barney’s Whiz Kid,”
BusinessWeek,
October 21, 1996, at
www.businessweek.com/1996/43/b3498153.htm
.

61
. “Bill Clinton: Life Before the Presidency,” University of Virginia Miller Center, at
http://millercenter.org/president/clinton/essays/biography/2
.

62
. Lisa Du, “The Rise and Spectacular Fall of Jon Corzine,”
Business Insider,
November 2011, at
www.businessinsider.com/the-rise-and-fall-of-jon-corzine-2011-10?op=1
.

63
. Robert J. McCartney, “Goldman Places Duo at Helm; No Major Change in Strategy Planned,”
Washington Post,
August 15, 1990.

64
. Clinton,
My Life,
452.

65
. “President Names Stephen Friedman as Director of the National Economic Council,” White House Archives, George W. Bush, December 12, 2002, at
http://georgewbush-whitehouse.archives.gov/news/releases/2002/12/20021212-8.html
. See also “President Thanks Steve Friedman,” The White House Archives, George W. Bush, November 29, 2004, at
http://georgewbush-whitehouse.archives.gov/news/releases/2004/11/20041129-9.html
.

66
. William D. Cohan, “Goldman’s Alpha War,”
Vanity Fair,
May 2011.

67
. “Jon Corzine Biography,” Project Vote Smart, at
http://votesmart.org/candidate/biography/43268/jon-corzine
.

68
. The White House, Henry M. Paulson Jr. Biography, US Treasury Government Archives, at
http://georgewbush-whitehouse.archives.gov/government/paulson-bio.html
.

69
. William B. English and Brian K. Reid, “Profits and Balance Sheet Developments at U.S. Commercial Banks in 1993,”
St. Louis Federal Reserve,
June 1994, at
http://fraser.stlouisfed.org/docs/publications/FRB/pages/1990-1994/33467_1990–1994.pdf
.