A $50 million margin call? I'll short Wall Street.

Tuesday, March 18, 2008, 8:45 a.m.

Goldman Sachs headquarters, 50th floor, CEO's office.

Lloyd Blankfein stood in front of the floor-to-ceiling window, his hands behind his back, staring intently at the city that had just awakened outside.

He hadn't slept all night.

His eyes were sunken, and a bluish-black stubble had sprouted on his chin. His five-thousand-dollar Brioni suit was wrinkled and clung to his body, and his tie had long since been ripped off and thrown on the sofa.

There were three documents on the desk.

Each one is like a sharp knife, stabbing at Goldman Sachs, this vampire squid that has been entrenched for 139 years, from different angles.

"Bang--"

The office door was pushed open.

Chief Risk Officer Craig Smith, Chief Legal Officer John McLeish, and Chief Financial Officer David Vinyat strode in.

All three of them looked extremely grim.

Lloyd…

Craig's voice was a little strained.

"There's been a problem with the SEC."

Blankfein turned around abruptly.

"What's the problem?"

Craig took a deep breath:

"Yesterday afternoon, Greenberg's personal lawyer—former Deputy Director of the SEC's Enforcement Division, David Rosenthal—went to the SEC's New York office."

He brought with him an 'internal whistleblower report'.

Blankfein's pupils contracted sharply.

What materials?

John took a fax from his briefcase and placed it in front of Blankfein.

It was a copy of an email.

From: Richard (Goldman Sachs)

Recipient: Dr. Edmund Harriman (Massachusetts Municipal Employees Retirement Fund)

Time: March 2008, 3

Subject: Re: Clarification on Bear Stearns' Asset Quality

Blankfein stared at the email, veins bulging on his forehead.

He knew this email all too well.

This is the fake guarantee email that Richard Kleiman sent privately in his capacity as a vice president of Goldman Sachs in an attempt to appease Harriman and prevent him from withdrawing his investment.

"How did they get it?!"

Blankfein's voice was deep and thunderous.

"Harriman offered it voluntarily."

John's voice was extremely bitter.

"He immediately hired a lawyer after withdrawing his investment and preserved the email as 'evidence of fraud.' Now, Greenberg has taken this email directly to the SEC."

Blankfein stared intently at the email, his hands clenched into fists.

"What did the SEC say?"

"They...have officially opened a case."

Craig's voice sounded like it was being squeezed out of his throat.

"The SEC's enforcement division will launch a preliminary investigation this week into Goldman Sachs' structured products division, focusing on whether there was any fraudulent activity involving the misuse of the company's reputation to mislead institutional investors."

Blankfein closed his eyes and took a deep breath.

The SEC's investigation.

This is not a simple fine or settlement.

Once the SEC formally files a case, the entire investigation process will last for months or even years. They will review all of Goldman Sachs' internal emails, transaction records, and risk control reports.

In 2008, when everyone was looking for scapegoats on Wall Street, the SEC would certainly not let Goldman Sachs off easily.

What's more terrible is——

What about the media?

Blankfein opened his eyes and looked toward the position of the chief public relations officer.

But that spot was empty.

John coughed:

"Maria (Chief Communications Officer) is downstairs dealing with reporters. Greg Zickman of The Wall Street Journal was waiting at the building entrance at seven o'clock this morning, specifically asking to interview you."

What does he know?

"He knows...about that email."

John's voice was extremely strained.

"Zickman said someone showed him a copy of the email. He's currently writing an in-depth investigative report, tentatively titled—"

John paused, as if swallowing a bitter pill:

"How Goldman Sachs used false guarantees to trick pension funds into paying for its toxic assets."

"If we don't give him a formal response by 5 p.m. today, he will publish this article on the front page tomorrow."

Blankfein felt a chill run down his spine.

The Wall Street Journal.

front page.

At a time when Bear Stearns had just been sold off for a paltry $2 and Wall Street was in a state of panic, if this article were published—

Goldman Sachs' stock price will plummet.

Institutional clients may panic and withdraw their investments.

Congress will immediately convene a hearing.

Most fatally, this will drive a nail into the hearts of taxpayers across the United States: Goldman Sachs is not only a greedy bloodsucker, but also a fraudster who cheats the elderly and teachers' pensions.

"There's a third one."

CFO David Vinyat finally spoke.

His voice was extremely tired.

"The office of Massachusetts Senator Edward Kennedy called me last night."

Blankfein suddenly looked up.

"Kennedy? What's he up to?"

His chief of staff said the senator was "very concerned" about the losses suffered by the Massachusetts pension fund during the subprime crisis. He is considering inviting Dr. Harriman to testify at next week's Senate Banking Committee hearing.

David paused,

The topic is: How Wall Street investment banks exploit information asymmetry to defraud American working-class pension funds.

A deathly silence fell over the office.

Only the sound of the wind in Manhattan outside the window, filtering through three layers of bulletproof glass, sounded like some distant, indistinct lament.

Blankfein slowly walked back to his desk and slumped into a chair.

He stared at the three documents on the table.

The SEC's notice of filing a case.

The Wall Street Journal's interview request.

The Senate Banking Committee's "informal inquiry".

Three knives.

They attacked Goldman Sachs' heart from three directions simultaneously.

And all of this is because of an old fox named Greenberg.

"Damn it..."

Blankfein cursed under his breath, gripping the table tightly with both hands.

Lloyd.

John hesitated for a moment, then spoke:

"We have to make a decision. We expect to receive a preliminary ruling on our application for a freezing order in the Southern District of Manhattan tomorrow afternoon. But even if the court approves the freezing order…"

He paused for a moment.

"That only temporarily freezes the $700 million in payments. It doesn't resolve the SEC investigation, the Wall Street Journal report, or the congressional hearings."

"And if these three things happen simultaneously..."

John did not continue speaking.

But everyone understood what he meant.

Goldman Sachs is not afraid of lawsuits.

Goldman Sachs is not afraid of losing money.

But what Goldman Sachs feared was being nailed to the pillar of historical shame in 2008, a time when everyone was panicking and looking for scapegoats, and being regarded as the "culprit of the subprime crisis."

That would be a disaster far worse than bankruptcy.