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But you while you don't believe in forecasting, you do believe in cycles. And the cycle I wanted to start talking about with you if it would be okay was is 2008. And the reason I I I would like to do that is I think it was a very defining moment for Oak Tree and you and your partner Bruce the CIO Bruce Kh stepped into the market in a really dramatic way when everybody was running in the opposite direction.
And I'll end just by giving people that question by giving people a sense of the magnitude. Howard and Bruce in call it the fall and you'll correct me of '08 uh were effectively putting 500 million to work a week in distress debt and then a 650 million total a week over 15 weeks across the whole firm.
So you were a buyer of10 billion of assets when everyone was stampeding for the exits. So given that you say you that predictions don't work, people might look at that and say you predicted the global financial crisis. So if you weren't predicting it, what were you doing? you know um we turned very cautious in uh the end of 04 56 and the main reason I I do not believe in forecast I believe it's much it's hard to predict the future it's not that hard to predict the present in other words it's not that hard to understand what's going on today so I do something I call take the temperature of the market try to figure out whether the market is heated or frigid and because you want to buy when other people are pessimistic and and when the the climate is cold, you don't want to buy when when the market is overheated and everybody's optimistic.
So, the main indicator in '056 was and I I I always say I wore out the carpet between my office and Bruce's because I would walk in there a few times a day and I say and I would say I'd hold up an article from the news. I said, "Look at this piece of crap that got issued yesterday. If a company can raise money on this basis, there's something wrong in the market.
It's as simple as that, you know, and the market, maybe some of you have heard the term bond vigilantes, but the the market is supposed to be like a vigilante. It's supposed to be a disciplinarian. It's supposed to enable good, prudent deals to get done, but not stupid deals. But when anybody can raise money for any purpose or no purpose on any terms, that's a danger signal.
And that's what was going on. And it was just getting worse and worse and worse and worse. And then we got this massive dislocation. Everybody's headed for the exits. Yeah. And you stand up and say bye. Yes. Well, how'd that happen? You know, it it really culminated in the bankruptcy of Lehman Brothers on on uh September 15th of08.
We had lost Mel Lynch and Bear Sterns and Wackovia Bank and Washington and now uh Lehman Brothers and AIG and there was a belief that the whole financial system was going to melt down. And by the way, it did feel that way. It really felt like cascading dominoes. Either the financial system is going to melt down or it's not.
Mhm. If it melts down, it doesn't matter whether we bought or not. Mhm. Because it's, you know, it's game over for everything. But if it doesn't melt down and we didn't buy, then we didn't do our job, right? So, let's buy. That was the analysis. I mean, you couldn't say anything more profound than that.
You first of all, there's really there's really no such thing as analyzing the future because the future is unknown. But we look to the past for analogies. And this was uh you know there was no an analogy to to the Lehman bankruptcy but the past says we have crises and and they end we don't always know how they're going to end in advance but so we bought and uh and worked out and it was it was one of the great buying opportunities of all time and not only could you get good bargains but you could invest huge quantities and we were fortunate that Bruce and I had cooked up this idea of developing a reserve fund.
So in at the beginning of '07 we raised $3.5 billion which was our fund for that period of time but we also raised 11 billion which we put on the shelf because we thought that something was coming. The first closing was March07. Uh we didn't start investing it until June08. We actually had 10 billion to spend. So, we're able to spend it.
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