Chapter 24 21 Securities King

john.Godfrey ran Solomon very well. — Warren.Buffett's Berkshire in 1991.The Hathaway Annual Report says exactly what Salomon Brothers was based on was a family dispute.Ferdinando.Solomon was born in Alsace.Lorraine, they are all local brokers. When he moved to New York in the late 19th century, he brought with him his ancestral business, providing short-term loans to securities firms.At the dawn of the new century, three of his four sons became his helpers.Wall Street was only open for half a day on Saturdays.Orthodox Ferdinando wants to keep the Jewish Sabbath, but the sons insist on working.Slowly their conflicts became irreconcilable; finally, in 1910, the sons scraped together $5,000 to start their own business.

They set up a shop at 80 Broadway, and the brothers went from bank to bank every morning, asking who had extra money, and putting it with the broker.Gradually they also started the corporate bond business.Although conventional wisdom held that it was a dead business, Salomon Brothers soon found an unrivaled client—the U.S. government. In 1917, Salomon became a registered dealer with the Department of the Treasury.It didn't take long for people to think that being a partner of Solomon's meant being "a partner of the United States Treasury." But the company remained small over the years, and it grew because of two key decisions that ultimately drew Buffett to it.

Since the beginning of Salomon's establishment, its organization is not very strict, which has attracted a lot of discussion.But despite its humble beginnings, it had one of its brothers, Arthur.Solomon was one of the few people on Wall Street that JP Morgan Jr. asked for advice.Once when he was shaving and learned that Morgan wanted to see him, Arthur didn't have time to fix his temples, so he hurriedly wiped off the soap and ran to Morgan's office.In return for this loyalty, the Morgans would often give him a bone to chew—a little corporate bond, for example—just the kind Solomon liked.

But Solomon wasn't content to be second fiddle.During the Great Depression, when all the big names on Wall Street "drove capital" to boycott the newly established SEC, Solomon went deep into the dangerous situation and gained a foothold in the subscription.This audacity, and the courage of its partners to risk capital, has prospered the company. Some believe that this "marketable" bond was the impetus for Solomon's growth before the war.But it remains a cautious player, fearful as a bond trader but aggressively active in underwriting and investment banking. 1958 William.Solomon reformed the company with one brilliant move.The second generation of Solomon stipulates that each partner must keep the money in Solomon except for 5% of the annual profit.Young fellows eager to buy a home are demanding a precedent.Billy the brunette.Solomon confidently declined; thus the interests of the partners intertwined, a spirit of exclusion arose, and the corporate fortune of the then $7.5 million began to grow.

Salomon then used growing funds to make up for the lack of corporate relations.It squeezed in the well-born Morgan and Kidder.Peabody's ranks are engaged in stock trading and investment banking. In 1968 Bruce was the first stock salesman hired by Salomon.Hector recalled: We were the last firm to start research, the last investment bank to start.This is not mainly because we are very familiar with customers, but we are very familiar with the market.We are money making machines. In 1979, IBM asked Morgan.Stanley relinquishes its traditional position as sole underwriting administrator, and

Managed its $1 billion in debt with Salomon.When Morgan refused, IBM chose Solomon, leaving old partner Morgan dumbfounded.Now that Solomon's wings are full, he no longer has to rush out of the barbershop to take orders from Morgan.Its funding had risen to $200 million at the time. This time private Wall Street firms, feeling the need for capital, are selling shares publicly.billy.Solomon believes that ensuring a stable partnership is the most important, so he strongly opposes the issuance of shares. John who was reused by him.Godfrey felt the same way.Once he overheard some of his fellows talking about taking such a course of action, and Godfrey cut in rudely, "If you guys think about it again, I'm quitting now."

Godfrod grew up in the rural suburb of Skarsdale, where his father, the owner of a meat company, lived with Billy.Solomon played golf together.Bright and withdrawn, Godfrey was an English major at Oberlin and had planned to teach.When he returned from serving in North Korea, Billy.Solomon invited him to the city.Fascinated by the hustle and bustle of the trading floor, the stocky young man became an apprentice. He worked hard in municipal bonds and syndicates, and at thirty-four he became a partner in the firm.He led Salomon to lightning-fast growth in the underwriting industry, but he never made it to Wall Street. During the Vietnam War, Godfrey, already bearded, led an anti-war march in the Financial District.

As if to compensate for his incompatibility, he was outwardly disrespectful, even rude.At a formal reception, he was introduced to Rowland, the manager of the New Jersey Pension Fund.Mike Howard. Dissatisfied with the share of the business he was getting from Trenton, he suddenly burst into a curse: "Well, what the hell is the need to do business with New Jersey?" Colleagues thought his vulgar language was a last resort, but he was actually just covering up his shyness.A good friend in the company, Ghidal."The problem with John is that he doesn't want people to know he's compassionate. He can't get out of that shell," Hallewitz said.

billy.Solomon didn't think Godfrey would always be so rude, so he put him in charge of the company in 1978.In 1981, Salomon encountered an unprepared event.That day Godfrey, Henry.Kaufman and another partner flew to Solomon's headquarters in Southampton-by-the-Sea, New York.Solomon welcomed the pinstriped group of visitors in civilian clothes with bad news—the company would have to sell its share of the company's capital to commodity trading company Phibro Public Corporation. (Godfrod was reluctant to sell, but eventually succumbed to his colleagues.) Solomon's 70 partners got an average of $7 million.

Contrary to Godfrod's surprise, Southampton now has a path to Omaha.After the deal, Salomon had an avenue to raise public capital; it was growing at an unprecedented pace, but the culture had changed irreversibly.While managers still refer to each other as "partners," it's just a phrase, and now they don't keep their money with the company.billy."Suddenly your people have $560 million," Solomon recalls. "They now care about their own money as much as they care about the business." Godfrod agreed with Phibro general manager David.Tendler shares the powers of the chairman.But when Tendler's own business collapsed, Salomon was extricated easily.Godfrey kicked him away immediately.By the mid-1980s, Salomon had not only made great progress in the traditional bond business, but also increased its weight in stocks.It was far ahead in the subscription process, and was dubbed the "King of Wall Street" by "Business Weekly".The magazine also predicts that if the company's development stagnates for some reason and its profits decline, it can recover immediately.

Difficulties are something no one expects to happen.During those years, Godfrey worked in a fabled little room facing the Statue of Liberty.Short and thick-lipped, he passed two rows of traders and left Long cigar smoke.He shook the two piles of flesh under his jaw and yelled loudly, offending all his colleagues. "He's driving everyone to work," said one mate, "Let's deal with the shit that's on the floor." Godfrey is said to have encouraged his bond-trading star John.Mary Wisher's $1 million bet on a round of dead-end poker, a game traders play when the bond market is dull, is documented in the best-selling insider report on the company, "Liar's Poker." Actually, maybe it was a fabrication, but it gave Godfreud the color of a dealer's dealer. When not playing poker, Mary Wisher's bond wizards—some of them PhDs—play million-dollar gambles on spreads using sophisticated trading techniques.Godfreud encourages them to take risks and is manly about the inevitable loss.Not only did he encourage people to be cautious, but he also demanded loyalty. "John's operation is unforgettable," said accountant Martin."It's like he's walking down a corridor, and everywhere he goes, it's lit up," Leiberweiz said. The entire company is filled with Godfrey pride.Traders believe that if they do something unethical it will be the last one.In Jack Sai, Kidder and Morgan.While Stanley and the others were tainted by insider trading, Solomon was not.Godfreud, who has been influenced by traditional schools, avoids unscrupulous parties and rejects deals he is not satisfied with. But he finally gave in when it came time to sell the corporate partnership.He agreed with his bankers to finance the LBOs of Refco and the South and authorized a large bond loan to TVX.The indecisive personality that was not in harmony with his strong appearance led to three fiascos. In practice Godfrey had no real control, and the departments had no budget.Before 1991, Salomon didn't even have a treasurer.It wasn't until after the bond market crashed that year that Godfreud discovered that his staff was too overstaffed—too late.The company has tripled its headcount to 6,800 since it began raising public funds.Godfrey has ramped up spending in stocks and investment banking, but profits have fallen."My trouble," he once told The New York Times direly foreboding, "is that I'm too cautious about people." From the number of people he has fired all the time, the partners found the pain in his heart.He paced the office like a caged bird, surrounded by carnival traders.On a vacation with his buddies on the Cape Cod peninsula, Leibweiz found him drinking alone in a corner.When Leiberweiz asked him what was wrong, Godfrey said, "I've found that work forces me to hurt people I don't want to hurt." In order to take power, Godfrey repeatedly changed the management structure.His close colleague Lewis.Ranariddh practically ran the mortgage department alone, customarily taking a cut of each transaction.Godfrey fired him mercilessly.But Solomon couldn't control the competition with rivals, bond dealers at the top, bankers and promoters at the middle.Some notable characters such as Ella the Trader.Harris and bond market guru Henry.Kaufman showed up.Godfrey is also in jeopardy.There was a plot to overthrow him, but it was too weak to succeed. The core of this intrigue is for year-end dividends.Godfrey wanted to pay less, but Solomon's various middle and senior personnel forced him to increase his bonus. While troubles continued in his career, problems arose in Godfrey's personal life.At the same time as the company's public offering, he remarried the famous former Pan Am flight attendant. Godfreud, who didn't like to make friends, became Gatsby. He and his wife bought a luxurious two-story building on Fifth Avenue for about 20 million U.S. dollars, and often held unbelievably extravagant parties.Finally, little Godfrey's 16-year-old blonde Susan.Godfrey is in Lu.Germany.Grenall bought an 18th-century house, as if they were vacationing in Paris. She doesn't often take her husband's attention away from the company, but she does. Tensions between the two had grown, as he still felt compelled to do something to get his boss's attention. Without even saying hello, Susan transforms their favorite manager's meeting room, replacing the big comfy sofa with a plush settee, and the old-fashioned ashtray is gone. “It looks like a French brothel,” grumbled one partner. “I walk around with a cigar in my mouth and I just don’t know where to flick the ash.” Godfrey is increasingly looking outside the company to build.By the late 1980s, he was making calls to Omaha several times a week.There is no doubt that Buffett, the largest shareholder, has helped him a lot. Godfrey admitted to "Institutional Investor" that he trusts Buffett more than his partners: Warren is the source.Whenever I can't ask someone in the company and get a solid answer, I go to him.Or more frankly, I don't believe the responses within the company are completely objective.Warren is a great guy. Buffett has been obsessed with Godfrey since he rescued GEICO in the mid-1970s.He repeatedly praised Godfrey for his "loyalty".But he and Munger were extremely dissatisfied with the chaos in the company.They and other directors don't even get the latest balance sheet. In 1990, Salomon Brothers' profits increased by 118 million, and Godfrey also increased the capital total by 120 million.Buffett was taken aback.The company's pre-tax profit of 10% is much lower than the average level of American industry.Its share price has been only 2 billion US dollars, which has hardly changed in 8 years, while the Dow in the same period.Jones Industrials shares nearly tripled.Its business grows year after year, but shareholders don't get a dime.It completely contradicts Buffett's philosophy, and he's not happy with it.Because it's using shareholders' money to buy luxuries for investment bankers. At the end of that year, Buffett went to their board of managers—he rarely interfered with company management—and asked them to lower their bonuses again. "I don't care how you pay, you can give it all to one person," said Buffett, one of three directors on the compensation committee, "but the total is wrong." Godfreud, who ignored Buffett's interests this time, ordered his bankers to cut their bonuses.But his old soldiers were all against it, and in the end he had to agree to increase the bonus plan by another $7 million. Buffett voted against the plan—the only time he voted against the managers, and everyone else voted for it, so the minority ruled the majority.The news that Buffett voted against Godfrey shocked the entire Salomon Company like a thunderbolt.Later, Buffett explained that he was worried that unreasonable remuneration would not last long, and that such one-sided remuneration would make the entire company "irrational."But Solomon is an irrational company. Although the benefits are not good, there are no less than 106 managers who have received more than 1 million US dollars. Someone in the capable Marie Weisher arbitrage group actually took 23 million!Although the group has brought huge profits to Solomon, the trader's bonus is ridiculously higher than others, all of which are only in the seven figures. Bao, manager of Solomon's government bond department.Mosher was even more "crazed." Mosher, 34, is fairly trusted.With narrow eyes and gold-rimmed glasses, he grew up on Long Island and holds an MBA from Northwestern University.He became Salomon's bond salesman in 1979. He worked in obscurity for four years in the Mary Wisher group. In 1988, Godfrey convinced him to take over the government bond department, which he said was the "second best" job.But he still kept working.He and his wife, who also worked on Wall Street, got a suite in Battery City Park, from which they could walk to work in Solomons.He installed a transaction screen in his bedroom and got up at 6 every day to pick up long-distance calls from London. He made $4 million in 1989 and $4.75 million in 1990. Even though he was a trader, Moshe was also very impatient.When Auditor John.When MacDonald informed him that he was going to check the Ministry of Government Bonds, he flew into a rage: "You see, my business is very good!" "Pau, you have no right to refuse an audit," Macdonald reminded. "Damn it, we keep calling back every time we try to do something nice," Mosher growled. When Mosher's boss, Mary Wisher, heard about it, he laughed: "You should take him with a grain of salt." But no one ever asked about Mosher's contributions. What Moshe did was to participate in the bidding when the U.S. Treasury Department auctioned government bonds and trade them after issuance. Treasuries have the largest market in the world, trading $100 billion a day, compared with only about $8 billion in New York stocks.The market is controlled by "prime dealers" selected by the New York Fed to complete transactions for the bank.While anyone can bid at a bond auction, only major dealers can bid on behalf of the parties involved.So they can know the market orientation a lot in advance.Among the 39 major dealers, the prestigious Salomon still gets the largest portion of the bonds. In return for this favor, Solomon, among other dealers, helps the government smooth out its debt issuance and keeps officials on track with the bond market.Its traders actually stare at the Fed as they gossip every day. The relationship was informal, a bit like passing the ball to the batsman, a gentleman's trust in an era of lawlessness.Every quarter, dealers and investors, including Salomon, are called to the Treasury to inform the government of its funding needs and seek advice on how to proceed. (Dealers were given a honorary bond not to call their offices, telling them to trade on the latest information.) The merchants and officials then went to the Madison Hotel for dinner, the customary mutton cutlet. The only time they are on opposing sides is at an auction, where the dealer wants to get the lowest bid and the government wants the most.Before each auction, dealers like Mosher rush to poll customers to determine demand.Meanwhile, Solomon and other dealers stationed salesmen at a row of telephones in the Italian Renaissance-style Federal Reserve building.Seconds before the auction starts at 1 o'clock, salesmen get their instructions and jot them down.They put the bids in wooden boxes, and when the clock struck one, a Federal Reserve clerk covered the jacks of the wooden box with his hand to prevent further submissions. This tight-knit system has successfully financed U.S. government debt since World War I. In 1990, the Ministry of Finance auctioned 1.5 trillion of bills, notes and bonds.Only trouble occurred in 1962.Morgan's bankers were going to buy half of the short-term bonds to be auctioned.The Undersecretary of the Treasury worried that Morgan was trying to manipulate the market, and he certainly didn't want to be dependent on a handful of dealers.Since then, it has mandated that no more than 35 percent of business be awarded to each account. Usually the winning bidders don't reach this percentage because they are allocated pro rata.But the shrewd Mosher found a loophole.He thinks the award should not exceed 35%, but the tender is not.So in 1990 he bid twice as much as IOUs in all auctions.Although the proportion had already been allocated, Mosher still got the lion's share. Mike, the official in white shirt who was in charge of the auction.Ba Chen immediately called Moshe and warned him not to do this.No doubt he meant that it was the last time this would be done. But when the $5 billion bond was auctioned two weeks later, Mosher bid for $10 billion.Ba Chen was dumbfounded; he didn't believe that dealers would dare to openly oppose the U.S. Treasury Department, and he was one of the few dealers who had eaten him for 3/4 of a century.He rejected Mosher's bid and announced that bids, too, could not exceed 35 percent. Now Mosher has taken the unbelievable move of threatening to speak directly to the Undersecretary of the Treasury, bypassing Bachen.Then he rants to the press in an ungentlemanly way that sets the Treasury in the dark.Alerted, Solomon's senior staff arranged a meeting with Robert, Undersecretary for Finance at the Treasury Department.Korobel's breakfast, let Mosher apologize.Moshe had no choice, he seemed aggrieved.Salomon Corporation was very concerned about this and ordered Mosher to call and apologize, and then sailed to London to calm down. But Mosher was caught in far more than Solomon knew.At auctions in July and August, he represented The table did not authorize his customers to bid and get a large share. By November 1990, in an auction of four-year IOUs, he posed as a customer and made a $1 billion bid to Mercury Asset Management.He or his agents informed a staff member to "sell" the bond "to" Solomon from the account of an unwitting Mercury, as if Mercury had actually bid and then sold it to Solomon.In order to cover Mosher, the staffer wrote "do not confirm" on the transaction ticket so that no one would ask Mercury about the transaction. In this way, in February 1991, Mosher submitted a 35% bid for two more customers—Quantum Fund and Mercury Corporation—also unauthorized and actually Solomon's own bid.Solomon and its "clients" got $5.1 billion in notes, or 57 percent of the total auction value. Of course, the Ministry of Finance did not know that these bonds violated its regulations and went to a company.But in April, a Treasury Department official routinely gave Mercury General Manager Charles a review of the auction.Jackson sent a letter.Mosher also got a copy.You can imagine how worried he was.The letter referred to Solomon's April bid "on behalf of Mercury Asset Management."But Mercury had no idea. Desperate to defend himself, Mosher called Jackson and coyly said that the bid was a staff member's fault and that Solomon was correcting it.He asked Jackson not to embarrass him by calling the Treasury Department truthfully.Jackson agreed. Just to be on the safe side, Mosher told Mary Wisher that he had only made one wrong bid and said he was working hard to correct it as soon as possible.Mary Wisher was stunned. He said that Mosher would lose his job because of this. "Any more?" he asked. Mosher lied.He said it was only this time, and begged for another chance. A few days later, at Solomon's new headquarters near the World Trade Center, a building of granite and glass, Mary Wisher was with Godfrey, Thomas, Solomon's chairman.Joss and attorney Donald.Faulstein met.Godfrey was shocked by what he heard. "How can you use the customer's name indiscriminately?" he asked. Mary Wisher interceded that Mosher was a hardworking manager and he just made a mistake for a while.But they know this behavior is not isolated.They discussed the conflict between Mosher and Bachen and his displeasure with the company's auditors. Faulstein said the wrong bid could be a crime.He felt that although Solomon was not asked to do so, it should be reported.Godfrey hesitated.He pondered for a long time whether to report to the Treasury Department—an unpleasant choice because of Mosher's quarrel with Bachen—or to the Federal Reserve.A direct phone call to the New York Fed manager would do the trick.But they may be able to slowly reveal the news through private interviews.Everyone agrees that Mosher's wrongdoing should be made public, but it's unclear who and when.There is no doubt that Mo She was disposed of by the government. Anyone in Mosher's position needs to be careful, at least in the short term.But these two words cannot be found in his manual.At an auction of two-year IOUs in May, he paid an unexpectedly high price, taking $10.6 billion, or 87 percent, split between Solomon and two customers.Smart, but too smart. Many dealers who promised to distribute the bills did not get the bills and were "cheated".This led to a battle for the "May two-year note," and prices skyrocketed.Mosher swindled out of $18 million. (His bid some time ago made around $4 million.) But traders complained loudly—some directly to Washington—that Salomon had cornered the market.Apart from conspiring to control prices exclusively, short squeezes are not illegal, nor are they obvious. But the short squeeze in May cost many people, and several traders went bankrupt. The Treasury Department is still in the dark about Mosher's illegal bids, but Bachen and his colleagues have noticed Mosher.Now, to Bachen's surprise, he discovered a brazen attempt by a trusted partner in the Treasury Department to manipulate the market.Before Memorial Day, he secretly notified the Securities and Exchange Commission. While the whole of Washington was busy admiring the cherry blossoms, its investigative machinery quietly began to work. The Securities and Exchange Commission and the Justice Department began an undercover investigation into Solomon's role in the squeeze.Solomon's client received a subpoena. At the same time, the Ministry of Finance was also received by the chairman of the subordinate committee, Rip Edward. J. Mackey's pressure, he heard the complaints of many traders.Massachusetts Democrats begin work on a bill to strengthen bond market oversight. Solomon's amateur but capable lobbyist Stephen.Bell is concerned about the legal process. He knew trouble was coming when he saw reports of a short squeeze. Bell, a native of New Mexico, loves to wear a pair of cowboy boots.He called Solomon's government bond department, and he yelled, "What the hell is going on?" Mosher said Solomon had done nothing wrong.Nothing, Bell thought, Washington would react like this! In early June, at Bell's urging, Godfreud paid a courtesy visit to Undersecretary of the Treasury Colaubel.Despite repeated reminders from his lawyers, he did not disclose the illegal bidding.But with the Treasury Department already concerned about a short squeeze, it could be worse if it is revealed now.He sat firmly in front of the black portrait of Kraubel to defend Solomon and said he would work hard to cooperate.But he didn't mention that the head of the company's government debt department lied to the Treasury.Kraubel didn't understand what he was coming for. Maybe Godfreud hated it when Solomon was revived.But now he had to explain why he was procrastinating.Like a long silent witness, he acts as if he himself is guilty. He told Sjos that he still intended to make the illegal bids public, but that it was a "small matter."It's unbelievable.It never occurred to him that the Treasury—Solomon's oldest and most valuable associate—would think quite differently from him. By the end of June, Godfrey learned that Solomon was the subject of civil and criminal investigations.He hired Wochitel immediately.Lipton.Law firm Rosen & Katz investigated Solomon's role in the squeeze, but he still didn't say Mosher made the bid.He's been tight-lipped about his lawyers.Until July 12th, Wochitel.Solomon's truth came to light when Lipton's lawyers uncovered evidence of illegal reporting. For the next month, Wochitel.Lipton found six illegal bids.Marty, a senior partner at the law firm and a close friend of Godfreud's.Lipton also suggested that he should make the matter public, although he was not obliged to do so.Godfrey agreed.He believes that what he has done is always right, and that he should be applauded even if no one applauds him. On Thursday, August 8, Solomon informed the directors of the matter.They called Buffett from an outdoor pay phone next to a restaurant on Lake Tahoe.Since Buffett doesn't know much, he doesn't care much.But Munger, who dined on a boat in Minnesota, demanded an explanation. That same evening, after a long delay, Godfrod and Sjoss called Kerrigan at the New York Fed to inform Wochtel.What Lipton found out and what I found out about an illegal bid during a certain period of time.Kerrigan was cool.Likewise Godfrey to Richard, the chairman of the Securities and Exchange Commission.Britton and Kroebel called. On Friday, newspapers publicly reported on Solomon.But Wochitel, who wrote the report.Lipton's lawyers routinely downplay it.What they didn't say was that Godfrod and Sjos knew about the illicit deal months earlier.What came to light was only vague and incomplete.Godfrey said just as little.The promoters and traders went home for the weekend in peace, thinking it was just the fault of Mosher and his client, who knew how to keep quiet and were wrong. On Monday, August 12, the tune changed. The Wall Street Journal puts the spotlight on doubts about Godfreud's and Sjoss' role: "I can hardly believe it—but it's true—(Solomon's managers ) did not know the bid amount of his own company.” It would be inappropriate to suggest that Godfreud had an affair with illegal bidding.When he read this type of text, Godfreud knew that the spotlight had shifted from Mosher to himself. He immediately summoned Derek, who was chairing a meeting of Solomon's bid bankers on Monday.Mohan and William who chairs the weekly sales meeting.Mackintosh.He asked the two men to reassure subordinates that the problem was "under control."The two complied.But the problems didn't end there, as Salomon's stock price fell; to make matters worse, traders began selling the short-term commercial paper that Salomon relied on to raise funds for its operations. Towards the end of the day, rumors abounded in the market.Mackintosh met Godfreud and Sjoss again; they admitted there were more illicit deals, one of which they had learned of in April.A balding Mackintosh with 30 years of service had the audacity to demand Godfreud's resignation, but was rebuffed.But he allowed McIntosh to try and write a better press release if he wanted to. On Tuesday, McIntosh called Mohan: "Derek, I've found something. It feels terrible," he said. "You're the only person I can trust." Mohan, a British national, had turned Solomon's Tokyo office into a major profit center.He was recently called back to New York to revive the company's financial arm.The son of a coal miner, he was educated at the London School of Economics.Mohan, 43, is now expected to be Godfreud's successor. Just a day earlier, Mohan had vouched for Godfreud's integrity.Now both he and Mackintosh felt pushed to the brink.He blushed to Sasha Li, Solomon's lawyer who worked for Forstein.Snow called. "Sak, I need to speak to him. I want the facts. If you don't come, that will speak for itself." At the same time, a letter from the Fed reached Godfreud - Kerrigan also wanted the facts, and he suggested that Salomon's old dealer status was now in danger.Sensing that the situation was serious, Godfrod and Sjoss called Kerrigan, only to find that the other party was not very friendly.The burly central banker is annoyed that scandals are being played out right under his nose.Even on the phone he felt "little by little" discover the facts.He is said to have lost his temper with Sjos: "How can you do this to me?" Solomons' top officials were again in Wauchitel on Tuesday night.Meet at Lipton.After a heated discussion about Godfreud's crimes, they drafted a second press release.This time they slightly admitted that the "senior leaders" knew about those bids in advance.Munger called: "Don't say 'senior leaders,' we want to know who!" So it was settled. A week ago, Godfrey was a formidable general manager on Wall Street, but by Wednesday his position was in jeopardy.The revelations that he had learned of the illegal bid in April but still set Mosher up again set off a chain reaction.In the eyes of managers, lawyers, journalists, and Solomon's own employees, the company was tied to the recently deceased Jack Seymour.It's no different for Benmann, which also collapsed a year ago in a protracted dispute with the government. On Thursday, customers ran away.The Wisconsin Board of Investments dropped Solomon's name.Moody's announced that it was likely to be downgraded, and the company's parties said that there was no need to call again until there was a change in the senior leadership team.Godfreud, who hid on the 43rd floor with his cronies, became a leper who everyone feared. Going down the 13th floor, Mohan, who was grasping the harvest, issued some expedient instructions like the deputy platoon leader who cut off the command of the headquarters.But he couldn't calm the market.Overnight, the company's share price fell from 37 to 27. The bond market also turned against its former king.Salomon's intermediate-term bond decline has also changed from 60 points on the curve to 300 points.Its credibility is shaky.People suggested that Mohan should call Buffett, whom he had never met. Kerrigan spoke again with Godfreud on Thursday night.This time Kerrigan made it clear that he would disqualify Salomon as a major distributor. It is difficult for those in high positions, especially those with vacation homes in Paris, to understand that the alarm bells are ringing for them.It certainly never occurred to Godfrod that Mosher's little trick would endanger him, but he doubted he would have been able to do it without Kerrigan. On Friday, Godfrey woke up to find his photo on the headlines of The New York Times.He thought he saw his own obituary. At 6:30 he called Kerrigan, who had no objection to his resignation.Then he called Lipton again, who was shaving.Lipton was always eager to help a friend—even though his client was Solomon rather than Godfrey.He asked him to think again. Once a securities king, he hurried to the office.It was just before 7 o'clock in Omaha, and he called Buffett's house to wake him up.Godfrey said he personally decided to resign and asked Buffett to step in. Buffett hesitated because he was careful not to get involved in such disputes.His life in Omaha is very regular.Used to be Tom."Think about how your life will change," Murphy said as he prepared to buy ABC, and he's no doubt thinking about it himself now. “你必须来纽约，”戈弗洛德坚持道，“我看到自己的讣告了，你看看报纸吧。” “好吧，让我想想。” 巴菲特洗了澡，穿上衣服，按老路线去了凯威特广场，脑子里想着所罗门的资产负债表。他知道它的资产近1500亿，其中有40亿是股票。所罗门比美国花旗银行下的任何银行都更可靠。然后他开始考虑所罗门的有形资产。生意很赚钱，并不会破产。关键是对生意极为重要的管理层一夜之间就垮了。董事们星期天将接受戈弗洛德和斯乔斯的辞呈，需要有新人来管理公司。 巴菲特的心腹们十分怀疑他是否该这么做。芒格的托尔斯和奥尔森的律师罗。奥尔森警告他“这是高风险的决策”，一旦失败他的名誉也就永远毁了。豪伊也向父亲发出了预言：“所有想背后给你一枪的人，现在会找到机会的。” 保险的做法是让所罗门安静地死去。不错，巴菲特在所罗门有7亿美元的优先股。优先股要比普通股安全得多；但芒格和巴菲特都觉得不能随波逐流地失去这么多。 他将失去或黯然失色的只是一张帆中的一小片。但他认为他的职业是把股东和公司紧密结合起来。戈弗洛德由于无能和优柔寡断而失去了别人的信任，但这种紧密的协议是双向的。作为所罗门最大的股东，巴菲特也有责任。 他的责任与命运极为相似。 中午时分，巴菲特坐上飞机直插云霄，义无反顾地飞往纽约。 那个周五的大部分时间，对所罗门股票的交易停止了。它的日常业务也歇业了。高级领导人聚在董事会议室里。中午时分，戈弗洛德进来了，他说：“沃伦是新总裁。”其他人等待着，四处闲逛。据莫汉说： 整个公司放下了所有电话。他们知道正在开关于新董事长的会议。在等待新总裁飞来时，我们莫名地感到有了生机。 经理们知道公司走出低谷也许要几天、几周的时间。他们已两眼发直地开了许多乏味的会议。财务总管唐纳德。豪百德说：“我们都吓懞了。” 那天下午，巴菲特把头探进董事会议室热情地招呼了声“嗨，好吗？” 他开玩笑说，“我们现在遇上点小问题，”好像公司只是走丢了一名不错的随从一样。然后他使劲地大声补充说：“我对约翰和汤米感到难过。我们有什么办法可以拯救JM（玛丽威舍）吗？” 巴菲特对他现在要负责的丑闻细节仍一无所知。但他不想盘问谁。他环视了一下说，很显然大家都累了，该休息一下了。他轻松的方式达到了效果，本周来经理们第一次感到精神振奋。 “这只是暂时的挫折。”他好像真的知道一样。 然后巴菲特去了礼堂把所罗门所有的管理人都召集起来。戈弗洛德首先发言。他说公司很幸运地迎来了巴菲特，这是他给他们鼓劲。他没有多愁善感，但仍略带着反叛的神情。他没做错什么，但他得走了。莱伯韦兹觉得他冷冰冰的告别仪式真是“太悲惨了”。投资银行家理查德。巴拉特说“这才是约翰——让坏时刻显得更糟”。没有人会忘记戈弗洛德最后的话：“道歉不是狗屎。” 过了一会儿，巴菲特第一次站在了这支队伍面前。他发现公司处境艰难，急需有人领导，但又不知该走向何方。现在巴菲特告诉他们，所罗门兄弟公司不能只遵守规则，他的标准将更严厉。 不仅是压线的，就是在线边上的事都不许做。 这是警告，也是挑战。它唤醒了人们对公司失去已久的荣誉的模糊记忆。 第二天，《纽约时报》登出了在场的人的话，也正是他们想听到的话： 巴菲特先生要求管理人让公司严格依法办事，经理们对这位即将上任的董事长报以热烈的掌声。