American Scandal Lehman Brothers | The Reckoning | 4
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Feb 3, 2026 A fast-paced retelling of Lehman's collapse and the immediate scramble to prevent a wider financial meltdown. Intense decision-making at the Treasury and Fed as leaders weigh rescuing AIG and stabilizing markets. The birth of TARP and the political firestorm that nearly derailed it. The human toll of bank failures, foreclosures, and the long debate over who should be held accountable.
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Fed Meetings Turned Desperate
- At the New York Fed, CEOs begged Timothy Geithner for a public bailout but he initially refused, saying there would be no taxpayer money for AIG.
- By 2 a.m. they realized private funds couldn't save AIG and the Fed admitted Wall Street needed government help.
White House Greenlights AIG Loan
- Paulson and Ben Bernanke told President Bush AIG could fail within hours and requested up to $90 billion in Fed loans.
- Bush granted reluctant approval, calling it a tough decision despite objections about free-market principles.
Seek Unified Political Backing
- Paulson explicitly sought Congressional backing to avoid the appearance of executive-only decisions and to reassure markets.
- He argued that unified government support would prevent market panic and legitimize emergency actions.
