16 November 2005
Two weeks after I was appointed editor.
My first meeting with Tony Blair in Downing Street. I had resolved to keep my distance from the government, but Downing Street called seeking a meeting within days of my appointment. Now I am sitting opposite Blair [who had won three election victories and been in power since 1997] and his PR flak-catcher Dave Hill.
LB: “Thank you for seeing me, Prime Minister.” TB: “Call me Tony.” LB: “That’s OK, Prime Minister.”
TB: (persistent) “Call me Tony... I mean, we do know each other.”
I remind the PM we’ve only met once before, in 1998 at the UK ambassador’s residence in Brussels. Blair looks a tad deflated. I ask about the government’s first Commons defeat, a few days ago, when MPs voted down proposals to allow terrorist suspects to be held for 90 days without charge. Labour holds a 66-seat majority. What went wrong? Blair says that after eight years in power, the Labour Party has become “ungovernable”.
TB: “There are three camps.
The hard-left and disaffected;
New Labour; and the rest who are simply confused.”
LB: “So where would you put Gordon Brown?”
TB: “He’s New Labour, I think. At least, he says he is. You better ask him.”
No worries, Prime Minister, I’ll be sure to do so...
Wall Street – as credit markets tightened and the system creaked.
First stop is Dick Fuld at Lehman Brothers. The Gorilla of Wall Street is wearing a starched white shirt and giving me the Big Stare. (I had the nerve to ask him about his bank’s exposure to mortgage-backed securities and other “counterparties” like hedge funds.) “I’ve got $100bn of collateral,” he says, jabbing his finger towards my face, “we’re whipping hedge funds like dogs.”
In Davos this year, Fuld promised he was going to “take some money off the table”. Rough translation: I’m going to be more responsible. Lehman has been a huge investor in real estate, betting that prices would continue to rise. They were then engaged in bigger, riskier trading games off this real estate base. This is a new version of the Greater Fool Theory, which states that people can make money by buying securities, whether or not
Six months later, on 15 September 2008, Lehman Brothers filed a Chapter 11 petition for bankruptcy protection, a moment regarded as the climax of the subprime mortgage crisis. It remains the largest bankruptcy filing in US history, involving more than $600bn in assets.
Angela Merkel’s manner is
– businesslike, concerned with facts not opinions. US Treasury secretary Tim Geithner once said she was the only leader during the financial crisis who was “numerate”. Her message carries an unmistakable moral authority: it is time to challenge the dominance of “Anglo-Saxon” thinking and the wholesale deregulation of finance. The banks don’t seem to know what product they’re selling or how to value it. Then her political point: “When things go wrong, suddenly the state is back in favour.”
sachlich
“Angela Merkel is impressed, if puzzled, by Barack Obama’s rock-star status. ‘Who is he? What does he stand for?’”
We turn to America. Merkel is impressed, if puzzled, by Barack Obama’s rock-star status. “Who is he? What does he stand for?” She is wary of his Republican opponent, John McCain, who is “worryingly Cold War”. The bigger point, she says, is that Hillary Clinton’s defeat [in the race for the 2008 Democratic nomination] shows that the US political landscape is shifting, profoundly.
A prescient remark which pointed to US voters’ rejection of the establishment candidate. This would be true with Obama’s 2008 victory, but even truer with Donald Trump’s election in 2016.
After 45 minutes, the conversation is over. Merkel agrees, slightly reluctantly, to a photo opportunity with the editor. Then, as the cameras flash, she asks how Gordon Brown is doing.
LB: “He’s struggling because of the economy.”
AM: “Then [David] Cameron’s coming [to power].”
Dann kommt Cameron.