Please... sit down
Welcome everyone, I must apologize for dragging all here at such an uncommon hour
But from what I've been told this matter needs to be dealt with urgently
So urgently in fact probably should have been addressed weeks ago but that is spilt milk under the bridge
So, why doesn't somebody tell me what they think is going on here
Mr. Tuld as i had mentioned earlier if you compare the figure at the top of page 13
Jerry, it's a little early for all that just speak to me in plain English.....ok
Infact, i would like to speak to the guy put this together..
Mr. Sullivan is it? Does he speak English?.... Sir?
I'd like to speak to the analyst who seems to have stumbled across this mess...
certainly that would be Peter Sullivan right here. Oh, Mr. Sullivan you're here
Good morning, maybe you could tell me what you think is going on here
and please speak as you might to a young child or a golden retriever
it wasn't brains that got me here I'll assure you of that. Well um..... sir as you may or may
not know I work here for Mr. Rogers as an associate in the risk assessment and
management office and MBS..Please just relax, stand up and tell us the cowboys
what is the nature of the bone? okay uh.. well as you probably know over the last 36 to
40 months the firm has begun packaging new MBS products that combine several
different tranches of rating classification in one tradable security
this has been enormously profitable as I imagined you noticed.... I have
well the firm is currently doing a considerable amount of this business
every day
Now the problem, which is I guess why we are here tonight is, that it takes us
the firm about a month to layer these products correctly thereby posing a
challenge from a risk management standpoint... and Mr Sullivan that challenge is?
Well, we have to hold these assets on our books longer than we might ideally
like to
yes? but the key factor here is these are essentially just mortgages so that has
allowed us to push the leverage considerably beyond what you might be
willing or allowed to do in any other circumstance there by pushing the risk
profile without raising any red flags now....
Thank you Mr. Sullivan, sit down.. what I'm guessing your report here says and I give me
some rope here
what I'm guessing it says is that considering that shall we say a bumpy
road we've been on the last week or so that the figures you're brilliant
co-workers up the line ahead of you come up with
don't make much sense anymore considering what's taking place today
actually not what's taking place today but what's already taken place over the
last two weeks
so you're saying this has already happened?
sort of ..Sort of..
and Mr. Sullivan what does your model say that that means for us here?
well that's where it becomes a projection..but...um...
You're speaking with me Mr. Sullivan.
well sir... if those assets decreased by just twenty-five percent and remain on
our books, that loss would be greater than the current market capitalization
of this entire company
so, what you're telling me is that music is about to stop and we're going to be
left holding the biggest bag of odorous excrement ever assembled in the history
of capitalism
Sir i'm not sure that i would... put it that way but let me clarify using your
analogy
what this model shows.. is the music so to speak
just slowing..if the music would have stopped as you put it
then this model wouldn't be even close to that scenario it would be
considerably worse
let me tell you something Mr.Sullivan, do you care to know why i'm in this chair with
you all I mean why i earn the big bucks
yes.... I'm here for one reason and one reason alone I'm here to guess what the
music might do a week, a month, a year from now
that's it nothing more
I'm standing here tonight
i'm afraid that i don't hear a
thing ....just
silence....
so
now that we know the music has stopped what can we do about it
Mr. Cole, Miss Roberts I'm afraid I think this is where you were supposed to step
back in
Lord knows we've relied enough on Mr.Sullivan tonight
what do you have for us?
what have i told you since the first day you stepped into my office?
there are three ways to make a living in this business
the first is smarter or cheat
Now I don't cheat and although i like to think we have some pretty smart people
in this building
it sure is a hell of a lot easier to just be first... Sell it all, today
Is that even possible, Sam? Yes, but at what cost?
I have to pay... really?.... i think so
where is this gonna come back to us?... everywhere
Sam I don't think you've seem to understand what your boy here has just said..... if
I made you
how would you do it?
well you call the traders in for the normal 6:30 meeting and you be honest
with them because they're gonna know it's the end either way, so you're gonna
have to throw him a bone and a pretty big one and then you've got to come out
of the gate storming no swaps no nothing
forty percent done by 10:15 by eleven o'clock all your trades have to be gone
because by lunchtime words going to be out and by two o'clock you're gonna be
selling at 65 cents on the dollar if you're lucky and then the feds are gonna
be in here up your ass trying to slow you down
Ramesh? they can slow you down but they can't stop you
she wants to sell ..but John even if we manage to pull that off and that's
saying something....
the real question is, who are we selling this to? same people we've been setting it to
the last two years and whoever else will buy it ...but John if you do this you will
kill the market for years it's over and you're selling something that you know
has no value
we are selling to willing buyers at the current fair market price... so that we may
survive... You will never sell anything to any of those people ever again
I understand... do you? - do you?
this is it.... I'm telling you, this is it...
that's four o'clock... Jared, you got till five to break this down, draw me up a plan
Is there anybody else who knows what's in here at the moment block by
block?
Eric Dale.. and where is he?
as of today he's no longer with the firm
we have been trying to locate him
Carmelo? yes... get me Eric Dale here by six...It's done...We meet back here in an
hour