Chapter 25 22 The Judgment of Solomon

I—Crisis On Friday evening, Buffett and Godfrey left Salomon with Sjoss.Limousines snaked their way through the financial district, joining the 6 o'clock caravans heading home from get off work.Kerrigan received them politely at the Fed.He stressed that Salomon's reseller position was in jeopardy; at the same time, he made it clear that he wanted not only to tackle illegal bidding, but to overhaul it, as in the good old days.Buffett begged for time, or he would have to apologize like a failed samurai. In the morning, Buffett once again summoned a dozen senior Solomon officials to Wauchitel, downtown.Lipton's office.Facing them—several of whom he never knew—he calmly announced that one of them would be chosen to run the company.

"I'm going to meet with all of you individually," he said, "and ask the same question each time. 'Who can do this?' You can come in in any order." Then he went into a side room and closed the door. Door. All but two nominated the same person.Mohan said: "It seems that this person is none other than me." When Buffett came out again, Wochitel.Lawrence, Lipton's partner.Pedewitz briefly described the Mosher incident.Buffett asked about Mary Wisher.The general point is that Solomon's top leader made no mistakes, but he had to resign due to calls for a clean-up.Buffett later met with Mary Wisher privately.The first victim of this incident, "JM", resigned.

On Saturday night, the camera turned to Christela, a buzzing steakhouse in East Manhattan.Buffett, Munger and Godfrey are eating.The latter provided advice free of charge.Buffett politely said he needed all the help.The king of Wall Street raised his glass to congratulate the new team. At 10 o'clock on Sunday morning, outside the Seventh World Trade Center, the directors, surrounded by photographers, struggled to move to the board room on the forty-fifth floor.But things were moving faster than they were, and just as they sat down at the knotted walnut table, news arrived that the Treasury had disqualified Solomon from the auction.

The board appears to be cluttered.One of the directors is at Zhite.There was a walkie-talkie from McKinley's cabin, and a phone call from Maine.Buffett was constantly out and answering calls from government officials, including Treasury Secretary Nicholas Nicholas.Brady, Assistant Secretary Geron, and Kerrigan, who is also talking to Fed Chairman Allan.Greenspan and others held a meeting.Buffett pleaded with them, unabashedly, reminding that Salomon's massive $150 billion balance sheet was financed almost entirely with short-term securities.The amount handled every day is as high as 50 billion, of which only 1 billion is guaranteed in the name of Solomon, and such assets will soon be exhausted.If it can't refinance, the only dead end is bankruptcy and liquidation.Meanwhile, Wochitel.Lipton is preparing bankruptcy papers.Although it's morning in New York, the opening hours in Tokyo are only a few hours away.Buffett worried that the Treasury Department's sanctions on Solomon would trigger a fundraising crisis in Japan and eventually lead to the company's bankruptcy.Proof is needed that the government still trusts Solomon or Buffett.

Meanwhile, while the airwaves carried news of Solomon's firing, company employees roamed the floor like people waiting for a relative's funeral.Bond trader Eric.Rosenfeld, $23 million arbitrageur Lawrence.Hilly Blunt and McIntosh are considering option shares to raise emergency capital.Mohan is on the phone with the Japanese side; John, 37, the treasurer who has just completed a triathlon.McFarlane hurried back to the office.He was busy figuring out how much money Solomon would need the next day.There are 3 electronic clocks hanging above the huge trading hall, showing the New York New York, London and Tokyo times."Your lives are flying by before your eyes," McFarlane said.

In the conference room, Godfrey resigned and Buffett took over.His sense of humor is gone, but he still brings his old calm and purpose into meetings.Director Doe.When Andrews saw that Buffett himself had a lot of investments in Salomon, he felt more at ease.Others rejoice that Buffett has personal relationships with many government officials.Regardless of the reason, all directors believed that Buffett, with his combination of reputation, financial resources, experience and ability, was the one who could save Solomon.All of his work habits—particularly the habit of making decisions alone—are coming into play now.

But Buffett is not yet sure whether to take the job.Had Solomon remained on the Treasury blacklist, he would have acted indistinguishably from Solomon's own managers.Munger strongly argued that Buffett should decline the assignment. At noon, Secretary Brady's phone call came. When Buffett walked out of the conference room, Munger shouted: "You are crazy to answer it!" Brady is at his summer home in Saladoga, where he assesses how much the market would be hit if Wall Street's biggest firms fail.Buffett took the microphone in a nearby room decorated with ancient pottery and lavender wallpaper.He recounted the changes at Solomon: Mosher was fired, Godfreud and Sjos resigned, the company took some new and special measures to prevent similar incidents from happening again, and he also personally pledged to fully Clean up the company.

"I told him to be in control and be accountable to me ... and I'm planning a very different future than the past." However, he added that if the Treasury removed Solomon, his role as chairman would be meaningless up. Brady understood that Buffett was a threat, but instinct told him that Buffett would not let go. "He never gave up any investments in the past," he said to himself. Brady was also rather disturbed by the prospect of Solomon disappearing.The system has weathered Black Monday, Jacksell's collapse and other tragedies. "Nothing is more important than the American government," he thought.

Of course Brady also knows Buffett.He is the same Nick.Brady, who wrote a dissertation on his family company, Buffett Worsted, as an MBA at Harvard.Although Buffett hadn't come out when he was playing stocks, he knew exactly what Buffett did later.Brady has often been with Buffett in Catherine in recent years.Graham met at dinner parties, and like Graham, called Buffett from time to time to ask for "real checks."Although he shrugged off Buffett's threats, he promised to plow a lot of stock into cleaning up Salomon Brothers.Their conversation ended in vain. The board of directors stayed open until more than 3 o'clock in the afternoon, and then Buffett went to the auditorium to attend the press conference as planned.As he walked out of the conference room, he gave Derek a slap.Mohan's collar, nodded and said: "You are elected." Since then, the giant Solomon among Wall Street traders has fallen into the hands of these two men, one from the Midwest, who once demanded a 100% tax on short-term transactions; The other was a former civil servant and full-time administrator in the United Kingdom.

After introducing himself and Mohan to the press, Buffett said he was a temporary unpaid chairman until Solomon came out of trouble.Then he announced the good news: Brady had just reversed his decision, and Solomon could use his own account to participate in Treasury auctions, but still not represent customers.This conditional probation is very important. To ease the aggressiveness of the questioner, Buffett said he was prepared to answer questions "like someone who has never met a lawyer."He still only knows the outlines of the scandal.But in the face of problems, he is as calm and astute as he is at the annual meeting.When to confess and when to politely retort, he has a strategy.He is willing to apologize for the past, but does not let the past be linked to the future.

Reporter: I was wondering if you've read Liar's Poker? Buffett: Yes, a long time ago. Reporter: Did you watch it later? Buffett: No, I don't think it was reprinted. The reporter's question was whether Solomon's culture was worthy of criticism, and whether Mosher was just a harbinger.Buffett countered that Solomon was generally above board.It's not "satisfying the lawlessness".But he recognizes that the cause of the incident is murky and that Solomon culture may also be partly responsible. "I don't think the same thing would happen in a monastery," he admitted. Most of the Q&As were about Godfreud.Buffett declared his silent support for Mosher's case "incredible and inexcusable."But his description of his friend's approval hasn't changed. Reporter: Do you think you misread John.Godfrey?Do you regret investing in Salomon? Buffett: Both answers are "no". The three-hour reception was a success, and Buffett did well.After the meeting, he walked into the room where the senior managers and distributors were, and made the expected announcement: "The company is run by Derek. It is up to him to decide who to fire and who to fire, so there is no need to call me.See you. " Then he walked into the nearby Marriott Hotel.Within a day he had tasted mediator among the press, managers and staff.To save Solomon he had to satisfy all three parties, as well as the company's customers and creditors.No recent investment bank has survived such a crisis. II—War Time For Solomon, the difficult times were just beginning.Monday's "Wall Street Journal" said leisurely.One might ask why it just started.The bad things are over and the bad guys are gone, but Huabao is wise.In Washington, management vowed a full investigation; Solomon's claims were reduced.Companies still cannot participate in the market for commercial paper.More and more customers—the employee pension systems of Connecticut, Massachusetts, and California—and the World Bank dropped Salomon.Taken individually, these blows are nothing to worry about; but together they are a danger.Come to think of it, the "scandal" continued, and it turned Godfreud's bond department into a grave. Buffett fought back hard on several fronts. Early Monday morning, he gave some of Solomon's top leaders his home phone number and sent a letter asking them to call him at the first sign of misdirection.While this is mostly symbolic, it's a simple but powerful move.Most CEOs don't like calling home. That same day, he and Munger went to see Richard, the chairman of the Securities and Exchange Commission.Brighton, which is the main agency investigating Solomon.The Brighton picket hawk is preparing to extend his jurisdiction to the bond market.In keeping with his reputation for sternness, he warned visitors that he was always ready to "search the whole beach for a grain of sand." "If anyone isn't working with you, just give us a call anytime," Buffett said quietly, "and I'll replace you with someone new in 20 minutes." Brighton was deeply moved. After returning to New York, Buffett began to raise funds.Solomon set high interest rates when he traded with people to induce them to sell securities.By the end of the first week, assets across the company began to unfreeze. Immediately after, Buffett asked Godfreud's barrister, Forstein, to resign and hire Los Angeles Munger.Towers' partner, Robert.Deng Han put down the work at hand to take over this position.Deng Handan, who needs to be clean Has served as Buffett's Berkshire law firm for 15 years. "Bob, I need you," Buffett said.Deng Han felt that it was not easy to refuse. The biggest concern comes from sanctions from the Justice Department.Buffett knows that the company cannot be in business while it is in a lawsuit.If it's charged with a crime, the company is pretty much down. (Many clients are not allowed to do business with criminals, and ordinary companies rarely do.) Now there is only one hope: to cooperate fully with the government and get a reprieve.Wochitel."It's been a really long shooting process," Lipton said. The Justice Department rarely agrees to waive sanctions for cases that are clearly illegal. There is only one strategy Buffett can adopt.He instinctively reduces conflict with his opponents, but he's an expert at winning without fighting.He won the election without talking or resorting to tricks.He is afraid of causing hostility from others, because he knows that it will take a long time for others to find out-as long as there is no conflict-loyalty will soon be rewarded.That's how he let Kay go.Graham trusted him, letting Stan.Lipsey saved his Buffalo from getting the SEC to drop its investigation into Blue Chip. Now he has to cooperate with those investigating Solomon, humble himself in front of his accusers, and truthfully assist the Department of Justice in obtaining evidence.Only Buffett will publicly declare that he is personally responsible for this scandal, not only to wash away the stains, but also to sincerely repent. There was also a political element to the incident, and the hostility at the time was open and palpable.Due to previous scandals and the influence of "Liar's Poker," the public preconceived that Solomon was corrupt from head to toe.Law enforcement officials and many members of Congress, once discredited by the S&L fiasco, also seized the Solomon incident as an opportunity to show their "tough style."They also seem to be eager to draw conclusions first. JJ Bigger, a Texas Democrat who investigated Solomon, publicly declared: "I worry that this is not the only deviant behavior, and Solomon will turn over." Reprising Solomon as Jack Seth, Dunn issued a flurry of 135 subpoenas and requests for information. Compared with Boyarski and Milken, Mosher can only be regarded as a small fight.But his daring to speak out against the Treasury Department also reflected another aspect of Wall Street arrogance that repelled the public more than any specific crime. In a sense, Solomon is the most arrogant of all. "It's not just Milgan," said an old Salomon manager, "we can play U.S. government bonds too." As the summer wore on, Washington was buzzing about the "Solomon Scandal" in its own way. Markey booked a seat for the hearing two days after Labor Day and asked Buffett to be the main witness. The Senate also scheduled a week of hearings. Bell, Solomon's main lobbyist, cleverly sent Buffett to visit some of the interrogating officers first. Several people asked some cold and hard questions about the lack of oversight by Salomon's board.Buffett said he also regrets not paying enough attention.He appears humble, with the attitude of holding a hat in his hand, placating the aggressiveness of others with smooth words.He reminded that his father was also an MP, and joked that now he was reaping the consequences. He frankly admits that Solomon made mistakes, and he sided with the enforcers.After talking with Buffett, Congressman Jack.Gan said to the assistant: "Look, we have to be more cautious in handling it." Buffett has benefited from his friendship with several of the main characters.Unlike most businessmen, he never criticized the judiciary for its mistakes because he trusted the government. Hearings typically involve a barrage of witnesses, but lawmakers were careful not to smear Buffett in the face.Although his investment in Solomon is 7 billion, the lawmakers believe that he is not from Wall Street, but a visitor from the Prairie. "Half of the people think of Omaha as a country town," Bell said. Bell, who spent time with Buffett preparing for the hearing, was struck by his insight into Washington.He thought he was more sophisticated than Russell of France. He has a good temper and is not at all rude.I always thought he was a New England Yankee, one of those 18th-century businessmen who always had God forbid.He is unambiguous in his moral standards, but he is never sentimental.He does what he wants to do for good reason.He rarely says "no" because he's not pretentious, and of course he clashes with people in his own way.He is a complex combination of contradictions. Like the trial, the hearing is self-organized, and regardless of the conclusion, it has only one chance. On the hot afternoon of September 4, the lobby of Rayburn’s office building was packed with people. Reporters, lobbyists, and spectators poured into Room 2123. Standing full of people, it was Mike.It is here that Milgan glaringly invokes the Fifth Amendment, refusing to give unfavorable testimony.The front row was packed with journalists in full gear—blinding spotlights, video cameras, tape recorders and camera gear.Buffett in a black suit on the witness stand and Catherine in the front row.Graham stands out the most.Before they could testify, the lawmakers posed for the camera and announced convulsively: "—the interests of the American people—have been violated by some arrogant—malicious—dealers...with Ivan .Boarski-Mike.Milgan... In our economic culture - there has been an ignominious episode . . . " Congressman Jim.Slattery told witnesses: "Mr. Buffett, you have a great opportunity right now to do something for the nation's taxpayers ... I'm glad you quickly fired the senior executives responsible for this ... now just hope it doesn't happen in the future Incidents like this... I've always believed that those responsible don't deserve anything in return from Salomon, not a severance pay, not a dime in compensation. Salomon should kick them out into the street, kick their asses..." After they announced the death penalty of the old system, they couldn't wait to praise the new team: "Mr. Buffett, I have to congratulate you...Mr. Buffett, your honesty cannot be questioned...Mr. The people of the line..." Rep. Peter from Omaha.Hoagland stood up and introduced his neighbor as a typical Midwestern upbringing and influence...he had always lived on a tree lined street in Omaha...he voluntarily filed his personal income tax... Followed by dozens of photographers and videographers, Buffett walked briskly onto the podium to shake hands with Chairman Markey, and the sound of shutters sounded like cicadas in summer.His belly is slightly fat now, his eyebrows are dancing on the mirror frame, his hair is like a mop sprinkled with pepper and salt, his voice trembles slightly, and his smile is slightly nervous. Normar, who first saw Buffett's photo in high school.Let.Thurston, immediately saw Buffett's style and wisdom.Harry, his friend from Wharton.Bega, a successful businessman who saw the scene in Mexico, winked and said he could tell Buffett was "very cheerful," but his friend was too shy. Buffett sat on the witness stand facing the House of Representatives, and he kept drawing an arc with his left hand when he spoke: First I want to apologize for the events that brought us here.Governments have the power to require people to obey regulations, and Solomon unfortunately violated several of them. Perhaps there will never be a more frank apology.Since Earl JP Morgan attended the PuJo hearings in 1912, Wall Street has had quite a few tycoons called to Congress, but no one has ever apologized. The shutter sounded again.Buffett said that "most of Salomon's 8,000 employees are hardworking, competent, and honest."He has vowed to introduce new measures to ensure that businesses operate according to the law.But in the end he said: "The spirit of doing things according to the law is more important than words." When talking about the outlook for the reorganized Solomons, Buffett Tet made a vivid analogy, as if he could jump from a podium into every home in America for everyone to see and hear: I want every employee to think about whether they want some disgraceful practice to be on the front page of the local paper the next day for their lovers, children, and friends... If they understand this, they will I will not worry about the following decision: I can understand the loss of the company's financial interests, but if the company's reputation is affected in the slightest, then don't blame me for being ruthless. Buffett's emphasis on reputation reminds people of Morgan's words - personality (not money) It is the basis of reputation.But that's where the similarities end.Morgan and others embody the cunning of Wall Street, but people agree that Buffett, who has made a fortune in the stock market, is a good antidote to the bad things that Main Street brought to Wall Street back then.Solomon couldn't have found another American who was both extremes. The atmosphere in the hearings in the House and later in the Senate was subdued.The subcommittee did not fully exercise the powers of law enforcement officers. "Mr. Kerrigan, the Fed was aware of what happened all along, right?" the reporter asked.Buffett, who was also surrounded by mobs as he left the House, got into a limousine and drove straight to The Washington Post. Solomon's "fired custodian" wasn't kicked out into the street.Godfreud and Sjoss have a new office and secretary in the empty building of the former headquarters.They are still given legal income in the company. After taking over, Buffett called Godfreud several times."I think he's fine -- he told John he's not useless," said an aide to Godfreud. But the day before the hearing, in the interest of the company, Godfreud said he would later They don't get in touch anymore. On the first day after the hearing, Solomon's directors gathered in New York.Buffett brought up the topic of the interests of Godfrey and several other former administrators.With the words of Rep. Slattery still ringing in their ears, they canceled their severance packages, bonuses, legal fees, offices and secretaries, and health care.Godfreud told his friends stoutly that he understood that Buffett was doing it to save the company. When a colleague came to visit him, Godfrey said: "You and the company must keep their distance." At this time, Buffett was using his secretary's office in the original Godfrey's office!He used his olive-wood Italian desk with sweeping views of the Hudson and East Rivers.But he was unfamiliar with all this and felt oppressed. By Friday afternoon, he couldn't take it anymore and boarded the plane, knowing that when he got back to Omaha, Asked and his family would pick him up at Glorex.He could sit in a cozy steakhouse with the sound of a nice organ, where people didn't understand economics, and he didn't have to bother telling this week's Wall Street story. For Buffett, the most stressful thing in Solomon is dealing with various external pressures.He can re-establish the credibility of bankers, credit bureaus, investors and news outlets.Just as at Berkshire, he had no control over Solomon's affairs. "It's like having another foot to step on a centipede," he murmurs to his friend.He even suffered from insomnia - a rarity for him. Friends who are familiar with him are very worried, because Buffett is always careful about his own affairs and avoids unfamiliar things as much as possible.Except for his wife's surgery, Munger had never seen him in such pain.Rick who had saved his life when the boat capsized.“People don’t know how much Buffett sacrificed for Solomon,” Goering said. Another friend said a little bitterly: “Warren was good in peacetime, now look at how he is in wartime.” Buffett is a reluctant fighter, but he has the demeanor of a general, such as self-confidence, sharp eyesight, and fearlessness. Unmatched attention span and gift for communicating with subordinates.Now he had to use all those wrists. The SEC asked Buffett to turn in Wochitel.Lipton's report - the deadliest piece of evidence in the case.As with all attorney-dealer ties, subpoenas have no effect on this report. Lawyers outside Solomon asked Buffett to decline.All lawyers in the United States would make such suggestions.Bell revealed that the lawyers said: "We are close to earning people's trust, we can't admit this, it will bring nightmares." "I don't want to hear these words." Buffett refused.He doesn't care what the public thinks—the money can be earned back, and legal details, no matter how important in his mind, won't make him break his promise to the Fed. "We're in a situation," he went on, "we did something wrong and now we're going to come clean about what we did wrong. We've signed the indictment." He then asked Bell if he could fire Solomon's paid government consultant. "Can we talk about this?" "of course can." Bell explained that these advisers were insiders in various ways and wielded a lot of political power. Solomon can use them. "You have a point," Buffett said, "but that's what we're going to do." Advisors are gone.Buffett hates these professional helpers.They obscure some important information.Buffett is going to do it himself like a lone cowboy. In fact, all these measures of Buffett are to win tolerance.He orders Solomon to stop dealing with oil trader Mark the Outlaw.Rich does business.He withdrew political aid so that no one would think he was buying favors.He also fired Wochtel, who had been implicated in Godfreud.Lipton. Another simple but powerful measure of his repeated warnings to Solomon's traders not to engage in "marginal" business.Within a few weeks, half a dozen Salomon traders brought the new strategy to Buffett to see if it met his "legal focus" requirements. Eric.Mosher was replaced by Rosenfeld, a prominent trader and former Harvard professor who proposed profiting from loopholes in the tax code.Rosenfeld worked on the idea for several months, and many lawyers thought the plan was brilliant and could make a lot of money. "I don't think so, Eric," Buffett said, saying it might be legal, but "it's borderline." He wants to use repeated moral education to improve employees' self-awareness.The company's banking analyst Thomas.Hanley, who has never seen Solomon so united, thinks Buffett is "amazing." But Buffett couldn't get the company off the front pages of the newspapers.New details of Mosher's mistakes have repeatedly been revealed, and the administration has continued to announce new and expanded investigations (five federal agencies and many states have joined the ranks).The news media kept saying that some other crimes would be uncovered by Solomon, the company was hit with multiple civil suits, and its credit lines were cut off.The basic problems have not changed, but the scandal has apparently grown bigger. The company's clients are also wary and concerned, unwilling to place business in the hands of parties who could be convicted the next day.BT has stripped it of its power to participate in a major deal.Bond traders also backed off.In order to convince the CEOs of large corporate clients, Buffett almost had to put his hands on his heart and swear that "there will be no more scandals." Five weeks later, the crisis began to stabilize, AT&T Chairman Robert. E. Allan, one of the nation's most respected presidents, struck another blow when he publicly declared Solomon's moral corruption to be "inexcusable."Solomon is like the fabled dog with a can tied to its tail, who gets scolded wherever he goes.The next day, September 24, its stock fell to 2034. Two days later, Buffett flew to meet Graham's team, which now has more than 50 members who are his friends and their lovers, including Bill, a young man from British Columbia on the shores of Lake Victoria.Gates.They were surprised that Buffett could come, but travel is just a supplement to Buffett. He stayed at the inn when his friends went to Victoria's lush and beautiful gardens - which he could have visited at will.He did, however, attend the seminar.The title was decided before the scandal -- "The Dumbest Thing I've Done in an Investment or Business." The scandal has greatly shaken the morale of the New York army.Says one manager, "It's a bad moment every morning when you open the paper and all you think about is when the end is going to end." Restaurant, he happened to overhear one of them smugly talking about Solomon: "You mean disgusting, isn't it disgusting?"—as if Solomon was full of liars. In early October, Buffett held a mobilization meeting for his staff.He said he did think the future was bright.This is the first crisis for most employees, but Buffett has been in similar situations before. I've seen a couple of companies go to emergency rooms - Amtrak in 1963, GEICO in 1976...someone at GEICO made a mistake.It went from being a very proud organization to one with much suspicion, and tens of thousands of shareholders left it.I admit, it's going to take a while, Jack.Byrne had to fight the crocodile again and again. He said it lightly, but since then, GEICO stock has gone from $2 to $194.When it comes to buying stocks in a bad market, he tells employees that they can't just look at the present, but look to the future, which he feels is bright. Wall Street is now betting on whether Salomon can survive or become a small company, just as "Business Week" said: "Small, less profitable, less powerful." People are worried that Buffett, who is cleaning up Salomon, has castrated the company .He has overseen the sale of $50 billion in assets to ease the credit crisis, but this has reduced the company's ability to do the traditional big deals.larry.Tisch asked sharply: "If Godfreud understands it, who will bear the risk?" Buffett has no answer. From the outside, Buffett doesn't look like much out of the ordinary at Salomon.He used to go to the manager's cafeteria and grab a sandwich and devour it while the others ate beef patties.Nor did he pace the aisles like Godfrey did.As the case calmed down, he spent more and more time in Omaha. He has close ties to just a few employees: Rosenfeld, the trading wunderkind who marveled at Buffett's delicate arbitrage skills; treasurer; the whole book. At first managers mistakenly equated Buffett's genial exterior with softness, but he's much tougher than he appears (as opposed to Godfrey). "He's nothing like John," Senior Deputy Manager William."It wasn't easy to convince him, he stood firm, and John was always hesitant to say 'no,'" said Jenin. But Buffett would not specifically manage Solomon.Mohan was surprised by his words: "I don't want to disappoint you, but I never wanted to run an investment bank." In fact, he went back to his own way-being a watchful but keeping his distance, as if in hilarious. Poetry sugar industry the same. Unlike most CEOs, he doesn't mingle with other managers. He looks less like a manager than an investor sitting in the stands. In October, he told Mohan: "Your company may be good, but the stock Oops." It was a reminder.In the past 5 years, the profit of Salomon stock ranked only 445 among the S & P500 stocks.Now Buffett's attention is slowly turning from scandals to stocks. Ⅲ—pain In the long run, Buffett believes that Solomon's prospects are very good.Its assets swelled like gas, but its capital profits dwindled.It has a steady stream of profitable businesses such as its Tokyo division, arbitrage, bond trading and underwriting.But the investment bankers who made a lot of money have been losing money for years.In terms of stocks, it makes profits one year and loses one year; the balance sheet shows that it is now a big machine, with a lot of money invested and more employees, but the profits it makes back are too small. Buffett began to realize that the crux of the problem was that Solomon was handing out too many bonuses.In the past, Godfrey made managers take home 3/4 of the company's profits-as if the company had to keep the managers if they didn't make money.But the real partners - the shareholders - have been left out in the cold.Irresponsible managers are a freak signal, as is Buffett's reluctance to overindulge children.The higher their bonus, the company's bonus is "insufficient or gone." Now Buffett is going to take bold action to break this pattern. On October 29, he published two eye-catching ads in the New York Times, Wall Street Journal and Washington Post.At the center is a letter Buffett wrote about cutting compensation.He stresses that exceptionally good work can be rewarded exceptionally well, but that Solomon's system of "equal wealth sharing" has deprived all -- even the middle class -- of shareholders. Then, he dropped a bomb. In 1991 he reduced the bonus total by $110 million.So even though the winning rate in that year (before the scandal) was double that of 1990, the prize money was slightly reduced.Those who don't like it can leave. Our principle of distribution according to benefits will definitely cause some management talents to leave...but the people who stay in the end will abide by the principles. Twenty-five years ago, Buffett spoke to Ken when Hathaway faced difficulties.Chase says he wants employees to be as accountable to the company as they are to their own property.Now, in a handsome glass-and-steel building on Wall Street, he's telling Mohan that he's ready to accept the mass resignation of his employees.Mohan asked how many there would be, and Buffett said, "Loyalty can't be bought, Derek." Buffett's decision has drawn strong support outside the company, with many hoping it will finally make sense of how Wall Street is paid.The reaction in my own company was quite different.雇员们觉得莫舍造成的黑锅扣到了他们的头上，因此对巴菲特走向公开化的做法深恶痛绝。 广告刊登的同一天，专挖人才的加利。哥德斯坦就接到了许多所罗门的经理们来的电话，他们希望忠诚是有标价的。 还有，这次创华尔街的削减程度也让他们呆若木鸡。莫汉减了经理70％的奖金，投资银行家是25％，减得最多的人达50万美元之多。巴菲特和莫汉还解雇了80名专业人员和200名后勤人员。 巴菲特很快就因此颇受微词了。人们感谢他拯救了所罗门，但现在又受不了了。他们认为巴菲特对执法者曲意奉承，而且对他冷落戈弗洛德也严加指责。一位老分析家说：“我们当中在这儿呆了很长时间的人对戈弗洛德很同情，沃伦是个救星，你知道人们对救星是又爱又恨的。” 戈弗洛德的老部下中最受同情的是所罗门主要的股票经销商斯坦利。夏普康。过去戈弗洛德常在他的办公室里抽雪茄，穿金带银的壮汉夏普康在一边做着股票交易。在华尔街夏普康做大买卖和展示自己块头是出了名的。 但他经管的证券部却效益不佳。巴菲特对他的魅力无动于衷，他命令他 卖出一些赔钱的股票并放弃投机行为。夏普康辞职了。 他的离开给证券带来了一些麻烦。当巴菲特宣布了为数极少的奖金额后，接替夏普康的布鲁斯。哈克特暴跳如雷地对下属说：“我都快疯了，你们猜猜是为什么吧！”巴菲特对公司大刀阔斧的改革就像在所罗门的阁楼上开了个暗门，作祟数十载的鬼怪们纷纷着了道儿跌落下来。 1991年冬季是个灾难时节。所罗门包销的证券份额从丑闻前的8％跌到了2％。那是个可怕的时期，整条华尔街的推销商、分析家还有银行家都无所事事。于是他们纷纷离去。 “沃伦认识不到让人离开有多容易，他真是太自作聪明了，”一位离任的银行家斜倚在男子汉俱乐部的一张皮靠背椅上，怒气冲冲地说，“他经营公司就像经营股票一样，从不考虑人的因素。” 他越说越激动：“你以为他的全部纪录敢上头版吗？除非他不是人，是圣贤什么的。” 1992年1月，巴菲特又面临着一场危机。曾受巴菲特的集体观念鼓舞的银行分析家汤姆。汉利威胁说，如果他的工资不加到200万，他就要为第一波士顿工作了。他过去就是这样给自己加薪的（1991年甚至加了40％），虽然喜怒无常，但他是一位有价值的分析家，在为银行争取业务中很有影响。 巴菲特还是让他走了。 同时还有4位分析家离去了。这引起了恐慌：大牌走了，该部正面临着人才被挖空的危险。在莫汉的一再催促下，巴菲特稍加让步，他保证了6位青年分析家的奖金。这是他第一次妥协。 巴菲特同时也正与莫汉试图建立一种把各组奖金和利润挂钩的体制。这可不太容易，所罗门从未算过下属众多单位要用多少奖金，巴菲特认为这是致命的疏忽。 坦率地讲，我觉得很奇怪，一个经手近40亿证券资金的人，竟不知道是谁在用它。 当奖金大战还在继续时，杰克。拜恩的儿子，正攻读斯坦福大学经济学和哲学博士的巴其克来拜望巴菲特。他们就激励问题进行了一次长谈。巴菲特鼓励小拜恩对书上的教条提出质疑，他说，人——至少有些人——并不像经济学家描述的那样是经济动物，他们还可用忠诚来激励。 客气地讲，华尔街上看不出这一点。人们当投资银行家就是为了赚钱。 如果你不付报酬他们就走人。曾是投资银行家的尼克。布拉迪认为巴菲特对此很不适应：“这就像一幕歌剧，你得与很自私的人打交道，与主角打交道。 我想他不完全了解这一行。 " 许多人同意此观点，还有人补充说巴菲特是想把自己的中西部道德标准应用在社会关系上。他们的批判暴露出华尔街总是与巴菲特格格不入。他们虽然对此大加批评，但又对自己的专业人员的报酬和表现深感不安。华尔街上一家主要的非公共竞争公司的总裁嘲讽地评价巴菲特是“清洁先生，一个来自奥马哈的眼睛瞪得亮亮的小子”。 说他是什么都不如说是一位俭朴、精明的商人。但他试图使报酬合理化未免太天真。 （他紧张地讪笑着。）他的话至少有部分说到点子上了，我同意报酬并不合理；我的工资就得由公众投票决定。Really annoying. （又是一阵讪笑。）他很对，是该把它当作生意来管。 就像豪伊预言的一样，等着从背后给他父亲一枪的人终于从树林中钻出来了。《商业周刊》从韦尔斯法戈和所罗门的失败中（就是不提可口可乐） 断言巴菲特已失去了投资者的内质。三周后，《商业周刊》再次断言巴菲特在所罗门的职位也告吹了。虽然杂志也承认巴菲特的确拯救了所罗门，但猛烈抨击他犯了“一系列错误”。他让雇员们吃了不少苦头，却减少了他们的工资，他磨去了公司敢担风险的棱角，而且越来越“缺乏领导才能和用人不疑的风度了”。 有些批评带有很强的个人色彩。有一期《华尔街日报》上对巴菲特有情妇一事大肆渲染，并暗示巴菲特传奇般的形象纯粹是骗局。从这种修正主义的观点看，巴菲特精心构思的年度报告是为了躲避“严肃问题”，他用自己的形象使股票浮在半空，他的成功完全是因为他的交际圈无人能比。《华尔街日报》引用金融界竞争者麦克。普莱斯的话，认为巴菲特是“最大之一的幕后市场操纵者，在套利和所有活动中他得到的市场信息比任何人都有用，但大家却以为他只是个普通的正常人”。 习惯于被报告奉承的巴菲特对此文“极为烦恼”，彼得说：“我和他在一起，他摆脱不了这种烦恼。”巴菲特给报社写了封信，对报道中的许多论点提出反驳，但他特别不愿公开表示自己被伤害了，因此他坚持不许发表他的信。 紧接而来的是《撒谎者的扑克》的作者麦克。刘易斯，他在《新共和国》上大肆讽刺巴菲特。他在《圣沃伦：华尔街上失败的天使》中攻击了巴菲特，全文谈的无非是投资和伦理的问题。这也证明一个一无所知的作家可以表现出发现了本世纪最大的一个骗子和骗子的惨败。刘易斯根据有效市场原理，说巴菲特事业上的成功只是扔硬币时运气好罢了，而且这个“失败的天使” 实际上满是错误。 巴菲特被这篇文章气得脸色发青。Book.格雷厄姆的忠实信徒《寻找布里迪。默菲》的作者曾偶然相识巴菲特，他给他写了封短信表示同情，并说刘易斯的话是明显的亵渎。一向对文辞谨慎的巴菲特回信说：“莫里，谢谢你对麦克。刘易斯文章的评价，你说他是什么就是什么吧。” 有趣的问题是，刘易斯为什么如此恨巴菲特？这可从他的《撒谎者的扑克》中找到了线索，也表明华尔街不喜欢巴菲特。他在书中描写了自己的生活，一个年轻的债券交易商，由于把8600万美元无人要的奥林匹亚约克债券出手给一名上当的当事人而兴高采烈。但他也承认为此感到难堪，因为他欺骗了一个信任他的“最好的顾客”。刘易斯卖出的债券是“自己八竿子都不想碰到”的。他的这种“光荣”会使他在所罗门步步高升的。 我知道这样很不好，其次我现在的感觉比当时更糟。 在描写巴菲特一文的结尾他写道： 你可以一时吓得人们手足无措，但时间一长他会犯错的……因此我们可以看到巴菲特进退两难：做好人还是赚钱？ 事实上做此选择的正是刘易斯本人。巴菲特大多数情况下都是想鱼与熊 掌兼得的。他反复申明的“好利润并不与好行业矛盾”正是对刘易斯和其他愤世疾俗者的理论的挑战。 当1992年2月中旬刘易斯的文章发表时，所罗门已跳起了欢快的凌波舞。股票恢复到了30美元。世界银行和养老基金会这样的顾客也回来了。管理层已完成了大修改，大多数时间巴菲特都呆在奥马哈。 但所罗门的业务仍在流血。莫汉痛苦地发现公司正在失去赖以生存的主要业务；同时谣言四起说巴菲特准备把公司重新交给债券交易商，把其他一切业务包括投资银行都取消。光2月一个月就有100名雇员开小差跑了。而8月份还拿工资的人中，有1/3的股东和1/4的银行家也跑了。就连丹尼斯。波文也跳槽去了贝尔斯特恩斯，他是70年代巴菲特的崇拜者。 叛变情况如此令人痛心，但巴菲特毫不示弱地坚持所罗门要按轨道行驶。他说，当迷雾散尽，所罗门在各方面都会更强大。没有哪位手下见他动摇过。这正是巴菲特的根本价值所在——勇于坚持自己的路线。财务主管唐纳德。豪瓦特说：“他对我说所有的困难都是可以克服的。” 但他心如刀绞，也许巴菲特感到压力最大的就是不习惯于和对他不忠的人一起共事。“那种痛苦，”那年春天芒格说，“就像血腥的谋杀。也许我们现在谈话时所罗门正在失去主要的关键雇员。”只要财政部的案子一日不了结，想结束这种打击就毫无希望。 Ⅳ—初恋 巴菲特早就明白政府一直让所罗门耗着就是对它的惩罚。他请求财政部早日了结此案，尽管他一向很少对人施加压力。“快点下手吧，”他说，“我们不想在你还没想好之时就失血而死。” 司法部和证券交易委员会要求所罗门接受重罪名和4亿美元的罚款。所罗门的刑事律师加利。耐夫台尔认为这个决定严峻得吓人，他在1990年为之辩护的基德尔。皮博迪的罚款只有2500万美元，而且没有罪名，虽然当时它的交易明星马丁。西加承认了大量的内幕交易。政府对所罗门唯一的起诉只有不正当投标。 （更重的罪名——市场榨空——由于缺乏证据而取消了。） 孩子气的耐夫台尔甚至就本案的不足为奇向政府律师团开玩笑说：“哪个宝宝被坏人杀了？” 一位美国助理律师回答：“你对政府撒了谎，这比内幕交易更严重。” 最后的决定得由曼哈顿的美国律师奥托。G.奥伯迈尔做出。他与喜欢给白天的投资银行家戴手铐的前人鲁道夫。朱力尼不同，奥伯迈尔是个一向被视作温和派的法学家。可惜执法人都有要震慑别人的天性，他判定所罗门有罪。 当耐夫台尔与他的律师谈判时，他发现巴菲特已给了他一件奥妙的武器。8月份巴菲特已答应与政府合作，而且政府认为他没有食言。因此耐夫台尔辩解说，如果奥伯迈尔现在制裁所罗门，那么人们会以为巴菲特的坦率诚实是太天真了。因此制裁不是警告别人以后不要犯罪，而是以后千万别与政府合作了。本案中巴菲特有很好的表现，不是莫舍也不是戈弗洛德。 4月份本案到了高潮。耐夫台尔打出了王牌。他、邓汉和律师罗。奥尔森把巴菲特带到了政府的律师办公室。他们在联邦法院边上的一座棕色矮楼里与奥伯迈尔见面。由于这次是巴菲特唱主角，几位律师都闭上了嘴。 巴菲特随随便便地说起了自己的职业。他没有就本案辩解，倒像为被控谋杀者辩护的乡村律师那样大谈家庭的正直。同样，巴菲特没从正面开始，他简单介绍了他与所罗门公司之间的几个里程碑——它是如何开始为伯克希尔赚钱，如何继续成为他的经纪人，戈弗洛德是如何拯救GEICO等。从巴菲特的经历看，所罗门是家值得自豪的公司，他与它25年的关系就是最好的证明。虽然巴菲特没有夸小戈弗洛德向他求救时公司的道德和财政危机，但他争辩说现在公司在这两方面都已恢复正常。“公司与8月份时已判若两人。” 他强调说。 奥伯迈尔只问了一个问题：巴菲特准备为他干多久？ 于是巴菲特侃侃谈起了他的长期投资哲学——对待公司就像对待伙伴一样，就像他在早期职业生涯和风云变幻的80年代一样。他从不从公司中吸血，而是紧紧地与它们站在一起。现在和将来他都会留在所罗门董事会中，为它投资为他监督。与星期天和整个事件过程中不一样，现在他不是求情，而是谈个人观点。 虽然奥伯迈尔坚持认为事实不容否认，但他在5月宣布不予起诉。同时各种联邦机构也宣布与所罗门达成了民事调解。巴菲特孤身一人就赢得了众多高级官员。财政部的助理秘书鲍威尔说：“我想，所罗门的所有股东都会在床头柜上放上张巴菲特的照片的。” 调解花去了所罗门2亿9000万美元，（包括1亿元的起诉撤消费。）这是历史上对美国证券公司第二次大数额的罚金。 证券交易委员会最后详细公布了10次“极严重”的违法投票。布莱顿严肃地说他发出了400张传票，得到了3万页的证明材料。但委员会在证实所罗门的忠实上做得最多。它的详尽调查除了莫舍的行为外找不到一丝违法行为的证据，这是对所罗门的一次大公开。 6月份，巴菲特离开了坐了9个月之久的董事长的交椅。股票现为3358 ，比1991年8月高出25％。又一次使华尔街目瞪口呆的是，巴菲特挑选了寡言少语的鲍伯。邓汉作他的接班人。 这位和颜悦色，柔声轻语的德克萨斯人是华尔街的门外汉，但他对巴菲特忠心不二；他的使命是坚持巴菲特的改革。德里克。莫汉继续去管业务。 但王冠后的权力没变——仍在巴菲特手中。 巴菲特进入所罗门时大张旗鼓，离开时却静悄悄的。送别的只有比尔。麦金托什的一张小条。 “我与所罗门同在”是句骄傲的言语，多年以后我们仍然将感激您。 巴菲特买了更多的所罗门股票，使伯克希尔的持股率达到了20％。在巴菲特购买之后，一度升到50美元的股价有了一次猛跌，但仍高于他当董事长时的最高水平。 财政部的市场也有了奥妙的变化，联储恢复了它主要交易商之一的地位，但丑闻后的变化已降低了此地位的重要性。联储的木箱子仍以老方式工作着。 鲍。莫舍承认他对财政部撒了谎。他在不大安全的监狱里呆了4个月，交了110万各种罚款，并被永远禁止从事证券行业。 证券交易委员会对戈弗洛德没能监督莫舍也采取了行动，他被处以10 万美元的罚款并不许经营证券公司。放逐后，他对自以为不公正的捏造罪名和失去社会地位倍感心酸。他与巴菲特的友谊中止了。随后出现了丑陋的一幕，他向所罗门公司索要钱和股票，并称那是公司欠他的离职费，可选择股票和奖金——由于股价上涨，这笔总数也膨胀到了5500万美元。他急于要拿到这笔钱，因此在加州与巴菲特和芒格见了面并发了脾气。调解委员会作出了对戈弗洛德不利的决定：他一个子儿也拿不到。 常人都以为戈弗洛德是个事业上的巨人，但道德上有污点。可笑的是没有一条是正确的。他是个正直的人，但是事业上的弱者，他没给股东带来什么长期价值。他对莫舍的错误行为的延误更是管理上的一大失误。 所罗门的一些市场股票重新规定了红利，并重新组建了职员队伍。它开始在长期徘徊的美国股票和投资银行中赢利。它在债券市场上仍是一个重量级选手。虽然它不再天马行空，但它对顾客的利益关心多了，而他们在交易商是上帝的时代都被冷落了。 丑闻后的两年内，所罗门的利润创了纪录，但在1994年债券市场动荡时它遭受了重大损失。显然部分损失是与丑闻直接相关的。曾是玛丽威舍手下最好的交易商，包括天才的艾里克。罗森菲尔德也开小差跑到他新开的套利小组去了。所罗门的套利小组像遭了瘟似的迅速减员了。工资表稳定执行了几年之后，奖金又涨得失去了控制，逼得巴菲特忍辱含垢，只好再次检查引起新一轮叛逃的报酬制度。总之，巴菲特宁可让莫汉这样毫无特色的人来重新管理公司，也不愿把公司交回到强有力的债券交易商手中。但他还得回答蒂施的问题——还有谁可以代替戈弗洛德坐所罗门“风险承当者”的位置呢？ 当他卸下担子之后，一方面为拯救了公司而自豪，另一方面又为无官一身轻而高兴得像百灵鸟一样。在他卸任后，彼得与他谈过话，觉得父亲听起来都像成了另一个人。不久，巴菲特和妻子飞往布法罗参加《布法罗新闻》报的野餐会，他在那儿可不受欢迎，人们会往他身上扔甜饼的。Publisher Stan.利普希带着这对夫妇出去玩，碰巧天下雨了。巴菲特与苏茜手牵着手，小心翼翼地跳过泥坑。他们走过墓地，巴菲特久久凝视着块块墓碑，然后他们来到奥尔布赖—罗克斯艺术走廊，那里正有支爵士乐队正在演奏。过了一会儿利普希与苏茜去看展品，沃伦则悠闲地站在台阶上听爵士乐。最后他们和利普希的女朋友，还有编辑马利。莱特夫妇去吃牛排——利普希特地从奥马哈订的。 巴菲特因为又回到过去而激动不已。他写道，所罗门闹剧“有意思，也值得一试”，但“一点儿也不好玩”。现在凯威特广场的圣殿又发出了召唤。 巴菲特毫不犹豫地向股东表示：“伯克希尔是我永不消逝的初恋。”