Notes
1 This chapter is adapted from Greycourt White Paper No. 44: The Financial Crisis and the Collapse of Ethical Behavior (2008), available at www.Greycourt.com.
2 Postcrisis, the GSEs had to be nationalized.
3 See, generally, Jeffrey Goldfarb and Richard Beales, “It's Time to Feast on Crow,” Wall Street Journal (July 21, 2008): C8. Regarding Lehman, see Floyd Norris, “Lehman's Assurances Ring Hollow,” New York Times (September 12, 2008): C1, and “The Two Faces of Lehman's Fall: Private Talks of Raising Capital Belied the Firm's Public Optimism,” Wall Street Journal (October 6, 2008): 1.
4 Naked short selling occurs when a short seller fails to borrow a shorted stock before the settlement date.
5 Commission rates for small investors actually went up, but commissions for the major traders went down by more than half. Eventually discount brokerage firms arose to offer lower commissions to smaller investors as well.
6 “Eye on the Market,” Michael Cembalest, JPMorgan Chase (September 10, 2008).
7 Even the best-parachuted CEOs outside the financial sector would envy Alan Fishman, whose golden parachute at WaMu entitled him to $19 million for serving as CEO for 19 days at the date WaMu failed.
8 James Grant, “Why No Outrage?” Wall Street Journal (July 19–20, 2008): W1.
9 Greycourt White Paper No. 24: A Modest Proposal: Let's End Conflicts of Interest in the Wealth Advisory Business (2003), available at www.Greycourt.com.
10 Eric Dash and Geraldine Fabrikant, “A High-Ranking Woman Is Out at Citi,” New York Times (September 23, 2008): C7.
11 Greg Smith, “Why I Am Leaving Goldman Sachs,” New York Times (March 14, 2012).
12 Adjusted for stock dividends and splits. Under O'Neill, Alcoa's stock price peaked at about $35/share.