Leave a Message After the Tone

March 20, 2009 8:06 AM

I've become intrigued by the idea of these weekend meetings that the companies/government have to decide to rescue, buy, take-over each other. I understand that it's wise not to release the news whilst the stock markets are trading, but so often we hear about the US Fed meeting with banking execs 'over the weekend' and deciding such-and-such. How do they get them together?

Does somebody somewhere maintain a big list of who's who and what their contact numbers are? Do companies of a certain size and type always have access to staff over weekends and the executives whereabouts 24/7 ?

I just would like to hear some details of how the mechanics of getting all these important folk together on the weekend actually works. I mean what if some CEO is fishing in the mountains, or still drunk from last night's swinger's party and has his mobile phone off? Do they lose out the chance to buy ABC bank for $1 ? (or whatever is the subject of the weekend's issues).

Who exactly does the Fed call? (no point calling the main switchboard number of my bank after 8pm on a Friday night!!). Do the company's legal departments or company secretariats organize 24/7 coverage just for emergency goings-on ? Is some poor admin assistant on duty all the time?

Or do those things actually happen Mon-Fri with days and days of warning? And the whole idea that XYZ Corp decided to spend $99 Billion to buy ABC Corp based on a quick chat at 6pm on Sunday night, just a bit of exaggerated drama to feed to the masses ?

Anybody got any real life anecdotes or experience of this?

posted by Xhris to Law & Government (2 answers total)

Blackberries and Cell Phones. Seriously. At that level everyone has met everyone else, and certainly senior people at the Fed and Treasury have direct contact information for the people involved. Also lets be honest - most of the time you know if you might be getting a call Saturday morning requesting your presence at the NY Fed. Most big firms will also have someone staffing the admin role 24/7 for the most senior officers.

There is actually a famous Warren Buffett story about him doing the deal to bailout Solly (or maybe it was LTCM?) while he was on a cruise to Alaska with his family. Turns out he could have gotten better terms if satellite telephones worked better back then. I can't remember it exactly

Also "When Genius Failed" has long descriptions of the meetings that took place over the weekend to figure out a solution to the LTCM failure.

The WSJ also loves to run pieces that focus on the timelines of these meetings and whatnot.
posted by JPD at 8:38 AM on March 20, 2009

Have you seen this CBS video and article that explains the process?

Or do those things actually happen Mon-Fri with days and days of warning?

Yes. The answer to your specific question is that, in this case, a secret auction to sell the bank took place a few days before the weekend.
posted by ssg at 8:53 AM on March 20, 2009