What this amounts to, effectively, is that investment banks- there’s a vote of confidence every night on whether they survive or not. NARRATOR: And that night, the markets were voting no confidence in Bear Stearns. The safest companies in the world, the most rock solid banks in the world, unable to borrow money. CHARLES DUHIGG: Everything freezes, and that’s what causes the crisis. This option counts a student’s answer as correct if it includes the word or words you specify. They held $5 trillion in mortgages. CHARLES DUHIGG: They’re enormous.
But neither Bank of American America nor Barclays were willing to do the deal without the same kind of government guarantees that Bear Stearns got. And whatever criticism there would be of government intervention was a small price to pay for the deluge that would have occurred if AIG had collapsed. NARRATOR: Key members of Congress, many of whom still knew few specifics, were called. Sheila Bair from the FDIC was there. SHEILA BAIR, Chairman, FDIC: The meeting was at Treasury. Blank stepped back from Home Depot management in 2001 and made a name for himself in the world of professional sports. In 2002, he paid $545 million for the Atlanta Falcons, a team now worth $2.1 billion.