Entertainment & Arts

Analysis: ‘Too Big to Fail’ captures the frustration of government officials and the arrogance of Wall Street leaders

Midway through the HBO docudrama “Too Big to Fail,” the head of the Federal Reserve Bank of New York despairs that ordinary Americans “have no idea the whole thing is about to fall down.”

He’s referring not to the stock market, which already was plunging as the global financial crisis struck in late-2008, but to the entire U.S. economy as the conflagration on Wall Street threatened to spread far wider.

I covered Wall Street for The Times during that period, and the movie accurately depicts the panic that gripped the Fed and the Treasury Department — and eventually a slow-to-comprehend Wall Street — as they scrambled to avert another Great Depression.

The movie, based on a book by New York Times columnist Andrew Ross Sorkin, captures the frustration of government officials as each hole they patched was followed by an even bigger leak.


“Too Big to Fail,” which premieres Monday, hews closely to actual events. But like most docu-dramas, it does condense events and conjure dialogue that never took place.

For example, Richard Fuld, the chief executive of Lehman Bros. doesn’t appear to have uttered the sacrilegious “screw Warren Buffett” remark when the famed investor offered to buy a stake in the company at what the CEO considered a fire-sale price. Fuld did, however, reject Buffett’s proposal and, within weeks, Lehman tipped into a record-setting bankruptcy that dwarfed earlier failures such as Enron Corp.

In an industry of aggressive personalities, Fuld was infamous for his drive and intensity — as well as his clenched jaw and the angry scowl that seemed to be permanently soldered onto his face. A mediocre student surrounded by Ivy Leaguers, Fuld was a gritty trader who was determined to push Lehman into Wall Street’s elite.

Another scene that probably was embellished — and was not in Sorkin’s book — was when Treasury Secretary Henry M. Paulson supposedly yelled at then-presidential nominee John McCain. In the movie version, Paulson barks at McCain that if the Arizona senator doesn’t back his plans, the next Great Depression will be his fault.


But several of the more vivid moments, such as the stress-induced vomiting of Paulson, are grafted directly from the book. Also, the film’s take on Christopher Cox, then chairman of the Securities and Exchange Commission, asking — hesitantly and incompetently — for the Lehman bankruptcy closely matches Sorkin’s work too.

Another pair of dramatic scenes — Federal Reserve Chairman Ben S. Bernanke’s exhorting lawmakers to fund a massive Wall Street bailout and Paulson’s summoning Wall Street CEOs for a fateful meeting — occurred largely as shown. “Too Big to Fail” aptly conveys Wall Street’s transformation from boom-era complacency to nail-biting angst.

The Masters of the Universe — as Tom Wolfe dubbed them in “The Bonfire of the Vanities,” his fictionalized 1987 portrayal of Wall Street excess — toggled from greed to fear. They loathed the idea of aiding rivals but became spooked by the deteriorating financial system — not to mention the threat to their sumptuous lifestyles.

The movie deviates from Sorkin’s book by making Paulson — the former head of Goldman Sachs who reluctantly had agreed to become Treasury secretary two years earlier — the spine of the narrative. He engaged in high-stakes brinksmanship to coax banks to fortify themselves through mergers and lawmakers to steady the economy through a $700-billion bailout.

Set several months after the government had rescued Bear Stearns by midwifing its sale to JPMorgan Chase, Paulson prods Lehman, the smallest of the four remaining investment banks, to raise capital to prevent a domino effect on other banks.

He exerted as much pressure as he could on Fuld, whose denial of his company’s mounting crisis led to its destruction. Lehman had survived a near-death experience in the early 1980s, and Fuld was convinced it could again.

Though Lehman sank, the cumulative efforts to revive the financial system and the global economy eventually took hold. The U.S. economy remains soft to this day. But it could have been much worse.

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