Carver - By Tom Cain Page 0,2

with being honest to themselves – maybe they could have saved the business. They could have resigned their positions, allowing more responsible individuals to take over. They could have drastically controlled the risks their people were taking, and reformed their accounting practices. They could have looked for smart deals based on genuinely undervalued assets – and by the way, they’d have made and kept a lot more money that way. They could have looked for a buyer when they were still in a position to negotiate from strength. They could have done a whole lot of things, and, sure, it would have cost me a heap of dough. But you know what? They were never, ever going to do that, because they were a bunch of arrogant assholes – just like most of the guys in all the other boardrooms on the Street – and they would never, and will never, admit that they were responsible for creating this disaster.’

‘But what about BoA and Barclays? How could you have known they weren’t going to close their deals and buy Lehman’s?’

Zorn reached into his jacket, pulled out his wallet and extracted a thousand dollars. He pushed them across the table to Misti’s companion, a brash young dealer by the name of Luis Ferrone, and said, ‘Buy yourself another friend.’ Then he looked at Misti and gestured at the empty space on the banquette next to him. She was round there in a flash.

‘So,’ Zorn said, ‘you want to know about those other banks? Well, that’s a no-brainer. Those deals were never going to happen. The moment the purchasers looked at Lehman’s books it was obvious that their true assets were nowhere near as big as they claimed. Officially, Lehman Brothers had around forty billion in assets. My understanding is the true figure was closer to twenty-five. That was when Bank of America decided to buy Merrill Lynch instead. Which left Barclays. But they had a problem. Lehman’s was bust. It couldn’t keep trading or even running as a business without fresh cash, and Barclays couldn’t hand over any till the deal was signed and sealed. So come Monday morning, someone was going to have to step in with a bridging loan to cover a deal that could still fall apart. So who could do that?’

‘Uncle Sam?’ Misti suggested.

‘Funny you should say that. Dick Fuld had the same idea, till Paulson told him no way was Washington going to hand over a single taxpayer dollar to bail out his bank. Now they got personal. There was a guy at Lehman’s, George Herbert Walker, who’s a cousin of the President. Word is, they asked him to put in a call to the Oval Office. Well, if he did, Dubya didn’t take it. So then people said, “Well, gee, Barclays is a Brit bank, maybe their government’ll give us the money.” That was when the Brits pointed out that hell would freeze over before their taxpayers were going to risk billions of bucks to support a US bank. Believe me, I didn’t lose a second of sleep over that. And you know what? Nor did Barclays. Yesterday they went picking through the wreckage at Lehman’s and acquired most of its US divisions for less than two billion. I reckon they paid about ten cents on the dollar. Wish I’d seen Fuld’s face when that news came through.’

Misti gave him a warm, genuine smile: one that came from the real woman, not the stripper.

‘You sound so passionate, like this isn’t just about business. It feels much more personal.’

‘Yeah, right again. This was very, very personal.’

‘Well, you put on quite a show.’

Malachi Zorn shook his head with a wry grin. ‘No,’ he replied. ‘That wasn’t the show.’ Then he laughed again so that Misti laughed too, assuming Zorn was just kidding as he said, ‘That was just a rehearsal.’

Washington DC: 17 March 2011

Three years in, and still the repercussions of the banking crash had not even begun to be resolved. At a congressional hearing into the practice and regulation of short-selling, Malachi Zorn effortlessly ran rings around the members of the House Committee on Financial Services, who attempted to portray him as an unscrupulous profiteer. Dressed with uncharacteristic formality, Zorn made his point not with any firecracker display of wit or mockery, but by speaking with a seriousness which suggested that the politicians questioning him were guilty of an improperly frivolous, exploitative attitude to the subject, whereas he was genuinely acting in the public interest.

Zorn was