Auletta and Cohan Discuss Greed and Geithner

Did you hear from Cayne after the book came out?

Not a word.

When you look at this crisis, broadening it beyond Bear Stearns, what blame do you place on the public?

The book ends with the speech that Alan Schwartz gives about the responsibility here, and he correctly apportioned blame to everyone, and I think he's not wrong about that. As I pointed out in the book, I spent some time in Baltimore at a sort of hospice for people who had trouble paying their mortgages and looked at some documents, and you see fraudulent loan documents, which everybody knows about now. But the point is that the borrowers signed the documents, even though they saw all the information, or had to have seen, was not accurate about them. They wanted the house. They wanted the loan. They got it.

So to absolve them of responsibility is not right. I think for a while there a mortgage became the most desirable product ever made. Everybody who touched it made money for a while. There's regulators to blame. There's Congress to blame. There's the Federal Reserve chairman to blame. There's bankers to blame. There's ordinary citizens to blame. There's public-policy makers to blame.

It all came together and turned out in a perfect storm, but it's not, as many Wall Street CEOs would have you think, a tsunami that came and affected them and there was nothing they could do about it.

Other decisions could have been made. This group of banks, unfortunately, decided to make the decision to go whole hog, all in on mortgage-backed securities and other risky securities that have got us into this mess.

You turned around this book very quickly. There's also a wealth of information in the book. How'd you start to report the book?

Well, literally, the weekend that Bear Stearns imploded and was sold to JP Morgan, I wrote a proposal and sold to Doubleday on the Monday morning, the same day the deal with JP Morgan got announced.

Now, unlike the Lazard book where I knew most of the people who worked at Lazard and figured I could, one way or another, get access to a lot of them, I didn't know hardly anyone at Bear Stearns. I felt like an ambulance chaser, and I felt even worse that there was a death—a major death in this family, and people were shell-shocked, and here I was asking them to do interviews?

It became apparent after sort of the 12 stages of this grief people ran through it that there were people who felt that the mainstream media had not accurately portrayed what had happened, and they felt very deeply that it needed to get out in another forum, and I was the beneficiary of that.