Chapters 18-19 Summary and Analysis

Chapter 18 opens on September 19, 2008, as Henry Paulson announced his plan to stop the market panic which he called the Troubled Asset Relief Program, or TARP. Having promised Congressional leaders he would have a bill ready for them as soon as possible, Paulson and his staff quickly drafted a three-page bill that asked for authority to spend $700 billion. The bill would also give Paulson complete authority over the program with no political oversight.

John Mack at Morgan Stanley was encouraged by the announcement, which might buy it time, but he still knew that his company had to find an investment partner to stay alive. They had been looking at the books of Wachovia, but were not enthusiastic about what they found. Talks between the two firms were put on hold.

Morgan Stanley had also entered into talks with Gao Xiqing...