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Too Big to Fail (film)

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Too Big to Fail is a 2011 American film about the 2008 financial crisis in the United States, focusing in particular in the efforts of Treasury Secretary Henry "Hank" Paulson and Federal Reserve Chairman Ben Bernanke to stem the crisis, ultimately settling on the controversial Troubled Asset Relief Program (TARP) which gave mandatory capital injections to Wall Street's biggest banks.

Directed by Curtis Hanson. Written by Peter Gould, based on the 2010 book of the same name by Andrew Ross Sorkin.
Main Street took the fall. Wall Street got the check.

Henry Paulson

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  • We're late. We've been late on everything.

Ben Bernanke

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  • I spent my entire academic career studying the Great Depression. The depression may have started because of a stock market crash, but what hit the general economy was a disruption of credit. Average citizens unable to borrow money, to do anything. To buy a home, start a business, stock their shelves. Credit has the ability to build a modern economy, but lack of credit has the ability to destroy it, swiftly and absolutely. If we do not act, boldly and immediately, we will replay the depression of the 1930s, only this time it will be... far, far worse. We don't do this now, we won't have an economy on Monday.
  • I don't really understand why there needs to be so much tension about this. The country is facing the worst economy since the Great Depression. If the financial system collapses, it will take every one of you down.

Dick Fuld

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  • [on the housing crisis] You know, people act like we're crack dealers. Nobody put a gun to anybody's head and said, "Hey, nimrod, buy a house you can't afford, and you know what? While you're at it, put a line of credit on that baby and buy yourself a boat."
  • I've seen this before: CEOs panic and they sell out cheap. Right now, the Street's running around with its hair on fire, but the storm always passes. We stand strong, and on the other side, we'll eat Goldman's lunch.

Other

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  • Jim Wilkinson: (watching Paulson's conversation with John McCain) He's not... threatening the Republican Presidential nominee, is he?
  • Nancy Pelosi: (when Paulson kneels down in front of her) Hank, I didn't know you were Catholic.
  • Michele Davis: They almost bring down the U.S. economy as we know it, but we can't put restrictions on how they spend the $125 billion we're giving them because... they might not take it?
  • Timothy Geithner: I'm on the Street, Hank, and people are just going about their business. They have no idea the whole thing is about to fall down.
  • Congressman Barney Frank: (reviewing the first draft of TARP) It's all for the banks. You don't want a penny for the average Joe that's about to lose his house?

Dialogue

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Joe Gregory: You heard anything from Buffett?
Erin Callan: He's asking for preferred shares at 40, with a dividend of nine percent.
Dick Fuld: We were just at 66! What-the-fuck?
Joe Gregory: Maybe it's just an opening gambit, Dick.
Richard Fuld: Sounds more like a goddamn insult!
Erin Callan: Dick, we're at 36 right now. We haven't been anywhere near 66 in months. The markets like Buffett. His name will push the price up overnight.
Dick Fuld: You know, I don't care who he is. I am not spending $360 million a year for the pleasure of doing business with him.
Bart McDade: Min, I'm so sorry.
Min Euoo Sung: We have negotiated in good faith, now all of a sudden we are going backward?
Bart McDade: We can work with you on the price.
Min Euoo Sung: It is not about the price. It is about the way you have conducted this.
[returns to the conference room]
Min Euoo Sung: I'd like to thank you, all of you, but I don't think we have a structure that works.
[The Koreans begin packing their papers.]
Dick Fuld: What, that's it? You're just gonna pack up and go back to Korea?
[over breakfast at the Federal Reserve]
Ben Bernanke: Lehman's down another 10%.
Henry Paulson: You are not gonna let me get down a single bite, are you?
Ben Bernanke: This is why I have oatmeal.
Neel Kashkari: Look, I'm just speaking for myself here, but I think you need to do what's right for the firm.
Dick Fuld: Do what's right? What is that supposed to mean?
Neel Kashkari: If your stock price keeps sliding, you may get an offer at a price that doesn't look all that compelling, but you may have to take it just to keep the company intact.
Dick Fuld: What kind of price are you talking about?
Neel Kashkari: Could be... I mean, it might be low single digits.
Dick Fuld: Last February, we were at 66 a share. Lehman Brothers is not Bear Stearns. We have a great business. Real estate will come back. I am not fucking giving this company away! [slams down the phone]
[in Beijing]
Chinese Official: Hank, I must ask you about Fannie and Freddie. We have hundreds of billions invested. You've assured us the investment is safe.
Hank Paulson: And it is, absolutely.
Chinese Official: We're watching a great deal of our money disappear. Share prices have dropped 60% in the last two months. Carrying your bazooka around has not helped matters. Congress gave you the power. Perhaps it is time to use it.
Hank Paulson: The market will stabilize. We just have to give it some time.
Chinese Official: There was an approach last month from Russia. They have considerable holdings in Fannie and Freddie as well. They suggested we coordinate and, without warning, dump hundreds of billions of Fannie and Freddie's bonds onto the market.
Henry Paulson: [flabbergasted] That would be...
Chinese Official: Chaos. The amount of debt your country carries is a terrible vulnerability.
Henry Paulson: But you...
Chinese Official: We declined. [smiles] Respectfully. Even in the U.S., it seems the relationship between the government and private industry isn't so simple.
[back in the States:]
Ben Bernanke: Was it a threat?
Hank Paulson: No, no, a friendly reminder... that with one phone call to Moscow they could take down the entire U.S. economy.
John Mack: Paulson's got 100,000 employees. Geithner has 200 lawyers. Frigging Chris Cox has 3,000 people. Not a single one of those assholes could pick up a phone, call the British, find out if there was a deal to be made before they spend the weekend sweating us for cash?
Jamie Dimon: Somebody dropped the ball.
John Mack: They didn't drop the ball. They dropped the ball, kicked the coach in the nuts and took a crap in the quarterback's mouth.
Hank Paulson: You are their regulator. Call the Lehman board now.
Christopher Cox: Hank, it's a complicated situation where...
Hank Paulson: Asia's opening. They don't announce, the market goes in the toilet.
Christopher Cox: We have to consider the appropriate role of government here. Can I, as Chairman of SEC, move forward and...?
Hank Paulson: You guys are like the gang that can't shoot straight. This is your job. Make the damn phone call.
[Paulson explains that the government has decided to bail out AIG.]
Henry Paulson: Tim thinks we need to do something big. Ben agrees, and so do I.
Jim Wilkinson: What can we do? AIG's not even a bank.
Henry Paulson: The Fed can lend to non-banks under "unusual and exigent circumstances". We're thinking of taking over 80% of the company.
Jim Wilkinson: Hank, we can't! This morning we were lecturing the entire country on moral hazard.
Henry Paulson: AIG has collateral, they have assets, Lehman didn't. We couldn't lend into a hole, it's not the same story!
Jim Wilkinson: Nobody is going to care, it's another bailout! With no legislation, the Hill is gonna go crazy, the country is gonna go crazy-
Henry Paulson: The plane we flew in on this morning, leased from AIG. Construction downtown, AIG. Life insurance, 81 million policies, with a face value of $1.9 trillion. Billions of dollars in teachers' pensions! It's everywhere! You want "too big to fail", here it is! You got a better idea, the suggestion box is wide open!
Michele Davis: I hate to do this right now, but I'm going to have to have a press call first thing, and I really don't know what I'm going to tell them.
Neel Kashkari: Tell them Lehman exacerbated AIG. The simultaneous payouts of CDOs and credit default swaps put catastrophic pressure...
Henry Paulson: Go back further.
Neel Kashkari: The global pool of investment capital...
Henry Paulson: She has to do this in English! Start with the homeowners.
Jim Wilkinson: Okay, okay, here's how you explain it. [clears throat] Wall Street started bundling home loans together - mortgage-backed securities - and selling slices of those bundles to investors, and they were making big money. So they started pushing the lenders saying, "come on, we need more loans."
Henry Paulson: The lenders had already given loans to borrowers with good credit, so they go bottom-feeding, they lower their criteria.
Neel Kashkari: Before, you needed a credit score of 620 and a down payment of 20%; now they'll settle for 500, no money down.
Jim Wilkinson: And the buyer, the regular guy on the street assumes that the experts know what they're doing. He's saying to himself, "if the bank's willing to loan me money, I must be able to afford it." So he reaches for the American Dream, he buys that house.
Neel Kashkari: The banks knew securities based on shitbag mortgages were risky...
Henry Paulson: You'll work on "shitbag"...
Neel Kashkari: ...So to control their downside, the banks started buying a kind of insurance. If mortgages default, insurance company pays. Default swap. The banks insure their potential losses to move the risk off their books, so they can invest more, make more money.
Henry Paulson: And while a lot of companies insured their stuff, one was dumb enough to take on an almost unbelievable amount of risk.
Michele Davis: AIG.
Jim Wilkinson: And you'll work on "dumb."
Michele Davis: And when they ask me why they did that?
Jim Wilkinson: Fees!
Neel Kashkari: Hundreds of millions in fees.
Henry Paulson: AIG figures the housing market would just keep going up. But then the unexpected happens...
Jim Wilkinson: Housing prices go down.
Neel Kashkari: The poor bastard who bought his dream house? The teaser rate on his mortgage runs out, his payments go up, he defaults.
Henry Paulson: Mortgage-backed securities tank. AIG has to pay off the swaps. All of them. All over the world. At the same time.
Neel Kashkari: AIG can't pay. AIG goes under. Every bank they insure books massive losses on the same day. And then they all go under. It all comes down.
Michele Davis: [horrified] The whole financial system? [Wilkinson nods] And what do I say when they ask me why it wasn't regulated?
Henry Paulson: No one wanted to. We were making too much money.
[Paulson gets up and goes into the washroom.]
Jim Wilkinson: You'll work on, "we were making too much money."
Wendy Paulson: P., you can't put this all on your own shoulders.
Hank Paulson: We're running out of options.
Wendy Paulson: Then you just keep trying. That's what you do. Eventually something's gonna work.
Hank Paulson: I'm not sure that that is true anymore. There is not a bank in the world that has enough money in its vault to pay its depositors. It's all built on trust. And, Wendy, we are so very close. Morgan Stanley, Goldman are an inch away. If the other banks stop trusting them, if they pull back on interbank lending, it's over in a matter of hours. And from there it goes too fast to stop, a run, and not just on one bank, I mean on the whole system. And average people wondering, "Is my money safe?" They start pulling their cash. And after that, lines outside the banks, smashed ATMs. A couple of weeks, there's no milk in the store.
[Before meeting with members of Congress]
Hank Paulson: The only way to get them to agree to this is to scare them shitless.
Ben Bernanke: That shouldn't be too hard. I'm scared shitless myself.
Nancy Pelosi: How is it possible you didn't see this coming?
Hank Paulson: If you want to rewind the tape, we can do that. But right now, the one thing we don't have is time.
[John McCain suspends his presidential campaign to return to Washington, D.C. and ensure that TARP passes.]
Jim Wilkinson: They're blowing it up.
Neel Kaskhari: What happened?
Jim Wilkinson: McCain wanted to swoop in and save the day, but doesn't have any idea how to do it.
Neel Kashkari: It's a 100-page piece of legislation we've been carefully negotiating for days. What, did he think they were gonna sit around and spitball?
Jim Wilkinson: Yeah, when McCain got here and found out that the deal was basically done, he went apeshit. The Republicans fell in behind their guy. They wanna start all over again. Democrats flipped out. Republicans dug in.
Jim Wilkinson/Neel Kashkari: Clusterfuck.
(last lines)
Ben Bernanke: It was the right thing.
Hank Paulson: Absolutely.
Ben Bernanke: I was prepared for more blowback.
Hank Paulson: They didn't have a choice. They knew that.
Ben Bernanke: I certainly hope that they...
Hank Paulson: What?
Ben Bernanke: I hope they use the money the way we're asking them to. They will lend it out, won't they?
Hank Paulson: Of course they will... of course they will.

Cast

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The U.S. Government

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Wall Street

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Other

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Wikipedia
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