David Rosenthal: belief

Transcript context

…Whoever steps in has to have the reputation to be able to save this firm. Nobody wants their investment to go to zero, so I pick you as the person who seems like you might be able to save this thing. At this point, the fiduciarily responsible people are the board, and who are the most prominent people on the board, Warren and Charlie. Warren specifically. Gutfreund is already out as CEO. So there's nobody left except Warren to come in and deal with this. Warren immediately gets on a plane to New York. He goes and meets with the Federal Reserve and tries to understand and sweet-talk them. This is amazing to me. The Fed, I think, assumes that Warren knows about their letter, but he doesn't, and that wire is still getting crossed in this meeting. Warren doesn't understand what the worst-case scenario really is. Cryptically, at the end of the meeting, Buffett’s trying to sweet-talk time and buy more time. The Fed tells Warren to "prepare for all eventualities," i.e. that they're going to yank the right to participate in the treasury auctions and Salomon's going to go down the tubes. Now it's Friday night into Saturday morning and Warren has to make a choice. He can walk away from Salomon, say I'm resigning. And $700 million dollars goes up in flames.…

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