Would receive a 10 percent annual dividendgoldman

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would receive a 10 percent annual dividend—Goldman Sachs would pay him an extra $500 million a year above and beyond his investment—plus he had the right to buy $5 billion of additional stock in the firm at a discounted price in the future, through warrants (similar to call options) the firm had granted him. An expensive deal for Goldman, but the stamp of approval of Warren Buffett was like gold. It also gave us momentum quickly to go out and raise an additional $5 billion in capital from our clients, some of the biggest institutional investors in the world. What was more important than the Oracle’s $5 billion investment was the powerful shot of confidence it gave us, and the message it sent to the market: both the money and the gesture had made us more stable. As the group headed down the long row that ran down the middle of the trading floor, Warren looked around, smiling; Lloyd was pointing things out to him. Then they decided to stop—directly by my desk. “Lloyd, let me say a few words,” Buffett said. An associate quickly scrambled and got Buffett connected to the handset at the desk directly next to mine, so he could speak over the Hoot, reaching each and every one of the six hundred traders on the floor.
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The moment Buffett started talking, applause erupted. It was the kind of applause I had heard only one other time in my career: on the one-year anniversary of September 11 when everyone cheered New York’s resilience. Everyone on the floor was now standing, beaming, clapping for what felt like minutes. “I want you to know that I have always admired Goldman Sachs,” Buffett said, holding the speaker of his handset close to his mouth and the receiver to his left ear, “from the time my dad brought me to New York City when I was ten years old and we came to visit Goldman Sachs. I met Sidney Weinberg, and I have admired the firm ever since.” You couldn’t make this stuff up. “Goldman Sachs has the best people, you are the best firm, and I couldn’t be prouder or more happy about my investment.” A roar of applause erupted again. It didn’t stop until Lloyd and Warren had left the trading floor. It was a moment I will always remember. I still have a photo that a colleague snapped on his iPhone: me, in my white shirt and bright blue tie, standing to Buffett’s right, Lloyd to his left, and dozens of my colleagues crowded around the Oracle, every single one of them beaming with pride, and some hope. For a brief moment, all was right with the world. A few days before Buffett’s visit, treasury secretary Hank Paulson famously went to Speaker of the House Nancy Pelosi with a three-page proposal—Paulson had wanted to keep the proposal short, to facilitate its quick passage through Congress—for TARP, the Troubled Asset Relief Program, a $700 billion program to save the banks. People were stunned at Paulson’s audacity: both for requesting an unprecedented amount of money, and for doing so in such a short proposal. TARP was a way for the federal government to purchase toxic, illiquid assets from the banks in the hope that the move—in effect, the biggest bailout in financial history—would revive the catatonic capital markets. There was
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