Armaan Ladak

Ladak 01

Julie Stoyka
S5 English
March 27th, 2015
Fire Sale
Ding! Ding! Ding! Ding! Ding!
The NYSE opened on what seemed like a perfectly normal Tuesday. Harvey and
Walter worked studiously, revising portfolios and asset breakdowns to assess for
risk. It was a cutthroat industry, and the Lehman Brothers had begun cutting throats
in what was seemingly becoming the year of the bear.
Jesus, theyre doing this in front of everyone. Harvey said, staring into the glass
room where one of the Human Resources staff was letting another colleague go.
Its a bloodbath, Walter muttered while shaking his head Ill be lucky if I survive till
4, theres plenty more to come after this.
Harvey and Walter were risk management staff, two of the last left on the floor.
They tried to muster smiles and nods as they saw friends and colleagues walk
through the office for the last time. It was a tough time for everyone, demand was
slowing and that meant less business for the company.
Mr. Blum, would you please come with us? asked Ms. Grenwich, staring at Michael,
the floors head of risk management. She, like everyone else, wanted this process to
be quick and painless.
Walter! Why the hell are they sacking Michael? Harvey sharply whispered, trying to
remain collected. Michael was his boss, and Harvey thought of him as a mentor.
Anyone but me right? Ha.ha. Walter said, immediately swallowed his smile.
Im going to go say goodbye.
Walter walked over to Michael, who was holding his Bankers Box.
Listen, Michael, Im really sorry. You helped me when I
I know. Listen kiddo, take a look at this, I didnt get a chance to finish it. Be careful.
Michael warned, handing him a USB.
The elevator doors closed. Harvey had never been more puzzled.
Ding! Ding! Ding! Ding! Ding!
It was 4 pm. The stock market had just closed. Both Harvey and Walter had
survived, but about half the office had been sacked.

Armaan Ladak

Ladak 02

Julie Stoyka
S5 English
March 27th, 2015
Hey man, you should come out with us and celebrate. Walter said.
Im good. Michael gave me some files he was working on, Im gonna take a look at
those. Harvey responded, eager to begin.
Come on man, you survived World War III.
Im good Walt, Ill join you guys later.
Alright man, see ya!
Harvey sighed, nervous about what he might discover on the file. He cracked his
knuckles, neck, back, and then breathed out all the air in his lungs. He tapped on
the table, and then stuck the USB into the Bloomberg terminal. There was one file:
MBS Accounts Leverage data. He double clicked on the file. A large spreadsheet
filled with numbers and graphs, illegible to the untrained eye. He parsed the data
on the spreadsheet, writing all sorts of equations and drawing all sorts of graphs. He
wrote down the last calculations in his Moleskine, and then came to a realization. He
frantically looked through the data to make sure he hadnt botched any calculations,
and rewrote all the calculations. The exact same results were produced, and the
final graphs didnt look pretty. He lunged for his phone in panic, but missed and hit
the floor. He got up and called Walter, mashing buttons like a madman.
Hey Walt.
Hey man! You coming?
I need you to get down here as fast as possible. Is Miles there?
Whoa, dude, its ten man.
I am well aware of the bloody time, get your ass here as quickly as possible.
Alright man. Ill bring Miles as well.
Peter lay back in his chair, looking at the ceiling tiles, trying to stop thinking about
what was going to happen. He couldnt. His mind was racing around the future, and
he was panicking. The door opened and the silence broke.
Harvey, what brings us here? Miles asked, slightly annoyed.

Armaan Ladak

Ladak 03

Julie Stoyka
S5 English
March 27th, 2015
Well sir, Michael was let go today, and he gave me some files he hadnt finished yet
and asked me to look at them. So I do, and well here, come take a look at these
graphs
What am I looking at?
Here. As you know, weve made MBSs a larger part of our assets in the past few
years, and we usually have to keep these volatile assets on our books longer than
wed like to. Our leverage ratios are so high, that, if these assets lose 10% of their
value, the losses would be twice the size of the companys value.
Jesus. And weve come close to this already. Are you sure this is right?
I went through this twice just to make sure nothing was out of line.
Im gonna call Gregory. Both of you stay here. Christ!
Miles jogged outside the room. Harvey and Walter knew something big was
happening. Bigger than what they originally thought. Nobody spoke with each other.
They all needed time to digest the data. Miles was calling the Chief Risk Assessment
Officer, which meant this was going to be a long night.
Alright mates. Hell be here soon, and hes bringing everyone else. Lets go through
all this data, so everything is sorted for the meeting. Miles said, visibly shaken.
Should we stay? Walter said.
Oh yeah. Its going to be a damn long night.
Gregory checked his phone. It was midnight. The executives were ready to meet.
The 3 men walked down the hall into room full of distressed old faces. They all took
seats.
Welcome gentleman. So which one of you is the reason we are all here tonight?
Gregory asked. Gregory was an old fellow, a tall gentleman, with big blue eyes that
had watched this company grow, and according to the data, fall as well.
This is Harvey, he put the numbers together. Walter is also a risk management
employee. This is the entire risk management department as of today. Miles said.
I believe everybody is on the same page about what is going on here right? Good.
Pamela, do you know if these numbers check out?
I would need a bit of time before I could give you my verdict, but they look solid
now.

Armaan Ladak

Ladak 04

Julie Stoyka
S5 English
March 27th, 2015
How much time do you need? Because we dont have much of it.
45 minutes.
Good, Ill call Winston. We meet back here at 1 am
Everybody got up and left the room in a rush. Walter and Harvey had never been in
such a stressful high up meeting before.
Is Winston the Harvey asked, shocked.
Yes. Youve stumbled upon the largest sack of manure this company has ever seen.
Miles responded. Harvey and Walter both saw the stress under Miles collected face.
All of them inhaled and exhaled sharply. Each minute that passed made them
realize how big this was. It was bigger than the floor, bigger than the bank, bigger
than America.
A man in a grey suit walked down the hall. It was Winston. He, like Gregory, was old,
tall, and very experienced. Winston was the CEO of the bank, and he was there to
work with the other executive to work out a plan to save the bank.
Alright boys, time to go back into the room. Miles said.
The three men walked back into the room. The environment was definitely more
tense. They had to think of a solution before sunrise, before the information hit the
paper. If some young analyst could produce the numbers, there would definitely be
someone else who did the same thing.
Good evening, I hope everyone is feeling well rested, Winston said, now Pamela,
did the numbers check out?
Unfortunately, yes. The kid killed it.
Alright. Now from what I understand, we have these toxic assets on our books, and
because weve borrowed so much, if these assets lose even a little value, the
company loses everything.
Correct. Harvey said.
Miles, how long would it take to clear the assets off our books, completely.
Winston, I hope youre kidding. This will kill the market, for years. Everyone, the
whole country will be hard hit. The Lehman Brothers will never be able to sell
anything again.

Armaan Ladak

Ladak 05

Julie Stoyka
S5 English
March 27th, 2015
Miles, I asked you a question.
At least a week. There is no way we can
I need you to sell all of it by 4 today.
Winston, youre out of your mind. The company will be destroyed.
What other option do we have? Keep it on our books. Our company will be
destroyed regardless. We need to be first.
Winston, if we sell all today, people are going to know somethings up, you cant
hide that.
Im well aware. This is the end Miles. Nothing else. People are going to find out
either way. We need to take the least worst path.
I cant go through with this. Im out.
Miles stormed out of the room. That hit him at his core. Miles understood that
normal people will be destroyed if they make the decision. This fire sale would make
the MBSs worthless. People wouldnt be able to pay their mortgages, banks would
fail because they wont get any income. The economy would tank.
Alright. Mitch, youre taking over for Miles. Youre going to need to give the traders
a massive reward to sell this stuff as quick as possible.
Ding! Ding! Ding! Ding! Ding!
The NYSE opened on the most irregular Wednesday. Traders were given seven figure
incentives if they could sell what the bank wanted to get rid of. 1 hour passed then
2. Traders were getting 60 cents on the dollar by lunch. People knew what was up,
and by 4 they were scraping for pennies on the dollar. They sold assets they knew
were worth nothing to people they knew: friends, family. They knowingly were
ruining their lives.
Ding! Ding! Ding! Ding! Ding!
The next day, Lehman Brothers filed for Chapter 11 bankruptcy, and, like Miles said,
began a chain of collapse. Days later, markets tanked. Fannie Mae, Freddie Mac,
virtually worthless. And so began the financial crisis whose chaos was felt around
the world.
Harvey and Walter knew they were going to get fired. They were left jobless for
years to come, and so were millions of Americans.

Armaan Ladak

Ladak 06

Julie Stoyka
S5 English
March 27th, 2015
Markets were torn apart, but still opened and closed with the same sound. What
happened between stock market bell rings changed the future of America, but still
rang on each day. That dreaded
Ding! Ding! Ding! Ding! Ding!