"But then, six months later, a tsunami came through town and blew away all the other houses, and I don't see how, frankly, we would have survived that tsunami. With Lehman going under, with Merrill about to go under, and with Morgan Stanley and Goldman an inch away, I don't see how Bear Stearns was a big enough franchise to survive that kind of storm. The reality is that going through that in March probably, on balance, Bear Stearns people did better than they would have if we'd survived until September."
Steel was riding yet another roller coaster, and the bumpy ride would continue into the fall. "I tell people it was a three-act play," he says. "Act I, I show up, and basically we cut the dividend, shrink the balance sheet, and reduce head count, and that generates over the next twelve to eighteen months, $5 to $6 billion of capital. And actually that seemed okay, and the market responded, and people were kind of processing that.
Steel also called Bair at home at 3:30 a.m. and told her the Wachovia board had voted to accept the Wells offer. She suggested that they together call Pandit at Citigroup later that morning. Steel didn't want to wait. "We're calling him right now," he told Bair. "I'm not going to have Vikram wake up and read in the paper about this. I've known him for twenty-five years, and he's a first-class guy, and so we should call him right now. And you should be on the phone, too, since you're the person who introduced me to Vikram, and now you've introduced me to Wells Fargo." 2b1af7f3a8