Comments for "Former Treasury Assistant Secretary writes: "What was going on?""

Nemo says:

Um, the "ill-fated MLEC" is what the Treasury is now implementing.

Nemo Thu Apr 2 12:32:03 2009 CDT #

CRbot says:

This comment thread has been CRC-IZED by yagij (CRbot helped a little).

href="http://realize.org/cr/crcizer/phpCRCo.php?path=%2F1508258219463814958&ord=asc&csslayout=reg&topic=Former+Treasury+Assistant+Secretary+writes%3A+%22What+was+going+on%3F%22

And for the stubborn old-timers... it's also been HALO-IZED by CRbot.

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CRbot Thu Apr 2 12:32:16 2009 CDT #

Cinco-X says:

test :-P

Cinco-X Thu Apr 2 12:34:53 2009 CDT #

Cinco-X says:

Hmmm... maybe JS-Kit is working!?

Parent Post

Cinco-X Thu Apr 2 12:35:24 2009 CDT #

CRbot says:

The Latest from Mish:

Citibank to Investors: We Suggest You Bet Against Us

CRbot Thu Apr 2 12:34:54 2009 CDT #

Nemo says:

From the WSJ summary:

Swagel, responding to critisc, argues that the terms of the capital had to be generous because “there is no authority in the U.S. to force a private institution to accept government capital.”

And therein lies the entire problem. How can an institution facing bankruptcy hold the upper hand in the negotiations for RECEIVING taxpayer money?

But they did, and they do, and once again I am feeling nostalgic for the days of public lynchings.

Nemo Thu Apr 2 12:35:07 2009 CDT #

Cinco-X says:

Maybe we could keep those lynchings "off the balance sheet".

Parent Post

Cinco-X Thu Apr 2 12:37:37 2009 CDT #

Jamie says:

lol +1, pissing myself

Parent Post

Jamie Thu Apr 2 15:25:05 2009 CDT #

Yalt says:

Swagel, responding to critisc, argues that the terms of the capital had to be generous because “there is no authority in the U.S. to force a private institution to accept government capital.”

When I'm negotiating a deal I also have "no authority to force" the other side into accepting my terms, but that doesn't mean I have to lie down and give them whatever they want without negotiating.

There's just no way these guys are that stupid. They can't possibly believe their own public arguments; they're just the best they can come up with to cover up the fact that although they present themselves as agents of the Treasury they are actually working for the other side.

Parent Post

Yalt Thu Apr 2 13:40:16 2009 CDT #

gab says:

The FDIC takes over failed banks all the time. Just not the size of Citi, Wachovia, B of A, etc. Perhaps that's why Paulson thought it might have been a bad idea?

gab Thu Apr 2 12:35:58 2009 CDT #

Tim waiting for 2012 says:

I don't believe for a second that Paulson didn't know what was going down.

He was cleary trying to calm the market down while GS took short postions and hedges against their disaster of a protfolio.

Tim waiting for 2012 Thu Apr 2 12:36:32 2009 CDT #

CRbot says:

The Latest from Jesse:

US Dollar (DX Index) Hourly Chart

CRbot Thu Apr 2 12:36:57 2009 CDT #

ac says:

Paulson was blinded by ideological concerns.

I don't really buy into the attacks on ideology because I don't see behavior on Wall Street that indicates any belief in ideology, law, morals, ethics, etc.

What I see is raw self-serving animal behavior sometimes disguised behind ideological claims, but no genuine ideology or governing beliefs.

Wasn't GS short subprime mortgages?

Doesn't this indicate that Paulson probably knew what was really happening with housing?

IMO this is not reflective of a person with ideologies. This is reflective of an animal that has none.

ac Thu Apr 2 12:38:10 2009 CDT #

Jay D. says:

........ac, the only way oil's going to $200/barrel whilst Obama is in office is either 1)Hyperinflation, or 2)a major geopolitical event such as the bombing of Iran........

.....................plus GoldmanS scam report...........................

Jay D. Thu Apr 2 12:38:44 2009 CDT #

Blackhalo says:

"He changed is mind when markets deteriorated and “he well understood that directly adding capital to the banking system provided much greater leverage.”"

Buying something worth ~0 at face value vs. somthing woth <0. Yeah, I can see how you get more bang for the buck. When is Timmy going to pick up on this?

Blackhalo Thu Apr 2 12:39:33 2009 CDT #

el lurko says:

Paulson knew exatly who he wanted to pass the ball to.

el lurko Thu Apr 2 12:43:04 2009 CDT #

Br\'er Dawg says:

The shortened list:

1) ...didn't understand the problem until very late.
2) ...poor planning and coordination.
3) ...blinded by ideological concerns.

Ummmm. And we've learned what?

Br\'er Dawg Thu Apr 2 12:43:11 2009 CDT #

JS says:

His former boss works across the street from Brookings, what are the chances he makes the lecture?

JS Thu Apr 2 12:44:24 2009 CDT #

debtinator says:

froth = tsunami

debtinator Thu Apr 2 12:45:57 2009 CDT #

nades says:

a tsunami of froth sounds gross where as froth on a tsunami sounds cool!

.................

OT whats up with silent letters anyway? esp on foreign words... never got that....

Parent Post

nades Thu Apr 2 13:36:49 2009 CDT #

Blackhalo says:

Damn you JS-Kit.

"He changed is mind when markets deteriorated and “he well understood that directly adding capital to the banking system provided much greater leverage.”"

Buying something worth ~0 at face value vs. something worth <0. Yeah, I can see how you get more bang for the buck. When is Timmy going to pick up on this?

Blackhalo Thu Apr 2 12:46:26 2009 CDT #

Mannwich says:

"Ideological Concerns?" You don't say? Shocking, just shocking.

Mannwich Thu Apr 2 12:47:47 2009 CDT #

Blackhalo says:

"This will lead to fewer short ETF shares in the market and drive the price up." Won't they just borrow the shares from the long side of the fund?

Blackhalo Thu Apr 2 12:47:48 2009 CDT #

Angry Saver says:

Paulson is fraud. So was his predecessor Corzine. Both were/are clueless and corrupt.

I watched Corzine years ago publicly state that FNM & FRE were NOT worrisomely large. His reasoning was that $50 billion equity market cap companies were not big by today's standards. Corzine was totally ignorant to the trillions in assets that FNM & FRE were guaranteeing. Unbelievable.

Until we recognize that adding more debt than output to an eCONomy is dilutive rather than accretive, the majority will be worse off. Only finance is being served by the debt growth economic model.

Angry Saver Thu Apr 2 12:49:00 2009 CDT #

charlie says:

I always thought Paulson was the wrong man for the job. As is Geitner. They need someone who is removed from Wall Street. Soneone who is removed from the securities industry. They need to find someone who has effectively managed a bank.

The security industry is a sales industry. Not a financial management industry. It would be like putting a car salesman in charge of cleaning up GM.

charlie Thu Apr 2 12:49:10 2009 CDT #

ac says:

The shortened list:

1) ...didn't understand the problem until very late.
2) ...poor planning and coordination.
3) ...blinded by ideological concerns.

My view on Paulson:

1) Understood the problem long ago and positioned himself to profit.
2) Excellent planning to use the housing and mortgage bubble as a vehicle to scam Americans out of billions of dollars and then orchestrate a power grab during the collapse.
3) Complete lack of morality and ideology.

There's a reason this man made hundreds of millions of dollars.

It's not because he didn't know what was going on or was "blinded by ideology".

People "blinded by ideology" tend not to walk away from a crisis with heaps of money.

ac Thu Apr 2 12:49:55 2009 CDT #

Barley says:

ac

+3

Barley Thu Apr 2 12:54:26 2009 CDT #

Werner says:

...April 20, 2007 : "All the signs I look at" show "the housing market is at or near the bottom," Paulson said....
----------------------
Priceless !

Werner Thu Apr 2 12:58:01 2009 CDT #

Jay D. says:

................Paulson should be responsible for all this global financial mess by intentional BK of Lehman.............he engineered world economy collapses ..........

Jay D. Thu Apr 2 12:58:16 2009 CDT #

Anonymous says:

Obama is embarassing himself

Anonymous Thu Apr 2 12:59:08 2009 CDT #

CRbot says:

The Latest from Denninger:

BOOM!!!! (Fannie/Freddie etc.)

CRbot Thu Apr 2 13:00:02 2009 CDT #

GreaterFool says:

Excellent planning to use the housing and mortgage bubble as a vehicle to scam Americans out of billions of dollars and then orchestrate a power grab during the collapse.

That seems too clever by half. Paulson made all his money before becoming Treasury Secretary, yah? Didn't he liquidate all of his GS before becoming Secretary/

That said, the analysis of WS ideology is spot on.

GreaterFool Thu Apr 2 13:00:13 2009 CDT #

Blackhalo says:

"Didn't he liquidate all of his GS before becoming Secretary/ "

Tax free!

Parent Post

Blackhalo Thu Apr 2 14:13:08 2009 CDT #

Comrade Byzantine_Ruins says:

AC:
My view on Paulson:

1) Understood the problem long ago and positioned himself to profit.
2) Excellent planning to use the housing and mortgage bubble as a vehicle to scam Americans out of billions of dollars and then orchestrate a power grab during the collapse.
3) Complete lack of morality and ideology.

I don't know if it was all a scam or just a conspiracy of shared interests, but there's no question that people understood they could take bigger and bigger suicide bets and Uncle Sam would be on the hook for the result.

Given that this part of the game is obvious and Paulson came from the inside, I think you'd be criminally incurious to wonder if he wasn't conveniently blind.

Comrade Byzantine_Ruins Thu Apr 2 13:00:19 2009 CDT #

1 currency now [yogi] says:

FDIC to let banks retain equity in loans they "sell". Bberg

(Quotation marks mine) So the bank stupid enough to have this toxic paper on its books now gets to sell it to itself, with free leverage from the Treasury and an FDIC guarantee, for which all banks must pay a fee.

Disgusting, but expected.

1 currency now [yogi] Thu Apr 2 13:01:05 2009 CDT #

Ted says:

Hank Paulson's incredible winfall: http://www.youtube.com/watch?v=bJ4J6hxTcgI&feature=channel_page

Ted Thu Apr 2 13:02:48 2009 CDT #

Tim waiting for 2012 says:

Short some SPG and more LOWes. Will go down some time.

Tim waiting for 2012 Thu Apr 2 13:05:08 2009 CDT #

Comrade Byzantine_Ruins says:

we see you yogi. Js kit is puking, oh evil overlord.

Comrade Byzantine_Ruins Thu Apr 2 13:05:16 2009 CDT #

ATM card and $19 in the bank says:

Shorter Paulson: What's good for Goldman Sachs is good for the country.

ATM card and $19 in the bank Thu Apr 2 13:06:36 2009 CDT #

ac says:

I don't know if it was all a scam or just a conspiracy of shared interests, but there's no question that people understood they could take bigger and bigger suicide bets and Uncle Sam would be on the hook for the result.

Given that this part of the game is obvious and Paulson came from the inside, I think you'd be criminally incurious to wonder if he wasn't conveniently blind.

I don't think it started as a deliberate scam.

I think what happened is that a bunch of people on Wall Street realized that they would make a lot more money if they kept quiet and did the wrong thing vs. speaking up and doing the right thing. Technically the "wrong thing" wasn't illegal.

I don't think this was the original "plan". I just think the confluence of selfish motives over the years lead to this outcome.

This is the classic "problem of morality".

As this recent episode illustrates, it is not a problem addressable by education, intelligence, or authority.

These guys that robbed us were the most intelligent and educated people in the world.

The regulators like Greenspan clearly had selfish motives too that lead them to contribute to rather than stop the problem.

ac Thu Apr 2 13:09:05 2009 CDT #

ShortCourage says:

I call "bullshit" on the notion that Paulson didn't understand the problem until late. He did what he needed to do to protect the Wall Street interests, from the get-go.

ShortCourage Thu Apr 2 13:09:28 2009 CDT #

ghostfacedinvestah says:

The Latest from Denninger:

BOOM!!!! (Fannie/Freddie etc.)

Yeah, I posted on this yesterday. This is going to have a HUGE impact on the mortgage market. The link on Housing Wire has a good article as well, check it out.

Which mortgages do you think are going bad at the fastest pace, loans with high LTVs or loans with low LTVs?

And don't think for a second this is limited to traditional agency loans. As the GSEs were buying Alt A loans, they were buying backend coverage for those loans from the MI companies, down to 50% LTV.

Now that we have "mark to model" back, if you were a good auditor, wouldn't you force Fannie/Freddie, or any bank holding whole loans with MI coverage (hello BAC), or any bank holding securities backed by whole loans with MI coverage, take a haircut on that cash flow to compensate for the potential coverage shortfall?

My prediction: the government, possibly through Fannie/Freddie, will pump money into the MIs, just further perpetuating the Ponzi scheme and adding fuel to the stagflation fire that is smoldering.

ghostfacedinvestah Thu Apr 2 13:10:01 2009 CDT #

dice says:

If this hasn't already been posted, here is the full essay I believe.
http://www.econ.yale.edu/seminars/macro/mac08/Swagel-090409.pdf

dice Thu Apr 2 13:10:09 2009 CDT #

Anonymous says:

There is a link to the essay on Greg Mankiw's blog: http://www.econ.yale.edu/seminars/macro/mac08/Swagel-090409.pdf

Anonymous Thu Apr 2 13:11:36 2009 CDT #

aClem says:

ac: People "blinded by ideology" tend not to walk away from a crisis with heaps of money.

Idealogues don't choose their ideology in a vacuum. People's ideologies tend to follow their own narrow perceived self-interest. The Friedmanite religion appeals to the greedy who picture themselves as masters of the universe. Greenspan is a big fan of Ayn Rand. I'm sure he sees himself as Atlas. He's been doing a lot of shrugging lately.

aClem Thu Apr 2 13:12:26 2009 CDT #

Anonymous says:

Democrat Rep. Patrick Kennedy on Thursday said he will introduce a bill to repeal the repeal of Glass Steagall law, which resulted in many financial companies being able to become financial supermarkets.
http://www.iii.co.uk/news/?type=afxnews&articleid=7253896&action=article

Hum

Anonymous Thu Apr 2 13:13:04 2009 CDT #

Broker says:

That's why I love Che Krugman. No "ideological concerns" there, baby!

Broker Thu Apr 2 13:13:14 2009 CDT #

Michael says:

Will BO ever in my lifetime say anything of substance?

Michael Thu Apr 2 13:13:25 2009 CDT #

bcg says:

Will BO ever in my lifetime say anything of substance? - Michael

By your standards, probably not.

Parent Post

bcg Thu Apr 2 14:17:01 2009 CDT #

Br\'er Dawg says:

Pardon the observation. When BHO speaks without a teleprompter I just get uneasy. Does anyone remember the computer program ELIZA? A parrot with a vocabulary.

Br\'er Dawg Thu Apr 2 13:14:33 2009 CDT #

Uh-Oh says:

Obama just said it doesn't mean the state micromanages then sneezed twice at the G20... what does it mean? WHAT does it mean???? Should we panic?

Uh-Oh Thu Apr 2 13:16:16 2009 CDT #

Michael says:

My President is a Buffoon. I can here loudly the rest of the world laughing their asses off at us. I am so ashamed of my country. Can someone please make BO stop speaking?

Michael Thu Apr 2 13:17:36 2009 CDT #

traderwalt says:

Michael says:
Today, 1:17:36 PM

<tbody>

“My President is a Buffoon. I can here loudly the rest of the world laughing their asses off at us. I am so ashamed of my country. Can someone please make BO stop speaking?"
No, Michael, I think you're confused or maybe forgetful. George Bush is a baffoon.

</tbody>

Parent Post

traderwalt Thu Apr 2 13:30:04 2009 CDT #

Br\'er Dawg says:

I am so ashamed of my country. Can someone please make BO stop speaking?

Michael, I suggest that we start with you and work our way up.

Br\'er Dawg Thu Apr 2 13:20:15 2009 CDT #

aClem says:

Michael, why don't you go to Free Republic where like minded types might appreciate your great intelligence.

aClem Thu Apr 2 13:20:51 2009 CDT #

Anonymous says:

The U.S. Senate on Thursday approved a provision that would require the Federal Reserve to disclose the names of institutions it has given funding to.
<tt>The Senate passed by a vote of 59 to 39 an amendment to a budget resolution that is still under debate.</tt>
<tt>The resolution was offered by Senators Bernie Sanders, Russ Feingold and Jim Webb.</tt>
<tt>The provision would require the Fed to identify each firm it has given assistance to, how much the assistance was worth, and what the firm is doing with the money.</tt>
<tt>"The American people have a right to know who the Fed is lending taxpayer dollars to, how much they are getting and what the Fed is asking in return for this money," said Sanders</tt>
<tt>http://www.iii.co.uk/news/?type=afxnews&articleid=7253892&action=article</tt>
<tt></tt>
<tt>Here ya go Benanke you little prick.</tt>

Anonymous Thu Apr 2 13:21:21 2009 CDT #

MS says:

Just the latest in the continuing round of apologistic tomes.

"we're so sorry"

Paulson knew what he was doing from day effing one....

Ciao
MS

MS Thu Apr 2 13:22:28 2009 CDT #

FaradaySheildedHeadgearBrigade says:

I mentioned on here before that I wondered who would win in the end: GS or JPM/C... the rats are fleeing out of the sinking ship, JPM/C seems to have brought more firepower to bear in this titanic naval engagement.

http://news.google.com/news?um=1&ned=us&cf=all&ncl=1322946125

FaradaySheildedHeadgearBrigade Thu Apr 2 13:23:17 2009 CDT #

Black Star Ranch says:

......Pssst.......did anyone notice Freddy & Fannie received another $46-billion a few days ago? There was so much more pressing news and all (like G20 seating plans & arguments with power hungry drunk French dipomats) to be able to ascertain the real news being quietly broomed thru the room.

Paulson, being ADD afflicted, had a tough time multi-tasking between running the Country's finances and listening to the orders from his REAL bosses up in New York.

The M2M debate is just another ruse to split the sheeple into further subsets of discussion and displays of pronounced disgust and dismay....

Black Star Ranch Thu Apr 2 13:23:45 2009 CDT #

ac says:

Greenspan is a big fan of Ayn Rand. I'm sure he sees himself as Atlas.

I agree with a lot of Ayn Rand's conclusions even though I think her basic ideology "Objectivism" is dangerous.

Keep in mind that a lot of her beliefs and criticisms came from real experiences in a Marxist society. She wasn't just making stuff up.

If her arguments didn't have merit we wouldn't be talking about the Soviet Union in the past tense.

That said, I think she goes to far with this kind of Religion of Self.

But this is also why I agree with here in many ways:

There's no way to implement true collectivism in practice. In the real world you need a central authority to carry out the collectivist agenda.

The problem is that central authority tends to attract the power hungry and self-serving. Your Stalin and Hitler types.

I believe that attempting to use government authority to institute some kind of moral agenda (I would argue in principle Marxism and Collectivism represent a sort of secular moral framework) is that it simply elevates the problem of self-serving and predatory behavior to a higher more politically powerful level.

The "criminal capitalists" become "criminal bueracrats" with legal authority behind their selfish motives.

At least capitalism provides a diffuse outlet for selfishness and ambition. Communism and Socialism concentrates it in the government.

ac Thu Apr 2 13:25:28 2009 CDT #

Black Star Ranch says:

........the excitement/tension of the impending fall is now palpable - can you feel it?

Black Star Ranch Thu Apr 2 13:25:54 2009 CDT #

Some Investor Guy says:

I think Paulson understood that there were real problems. However, I find it credible that:

1. The magnitude was somewhat greater than he expected.
2. It was difficult to form the right policy response, especially if a major objective was to prevent takeover banks, or compensation reductions for bankers.
3. It was difficult to anticipate second and third order effects, and exactly when and where they would show up. Was it obvious to anyone here that the housing crisis would kill auto leasing? How about munbond yields? What about which healthy banks would be put at risk by being "encouraged" to takeover failing banks?

Some Investor Guy Thu Apr 2 13:26:28 2009 CDT #

REBear says:

"Paulson was blinded by ideological concerns. The FDIC effectively takes over failed banks all the time, but somehow Paulson saw this as a "fundamentally bad idea"."

Timmy says four more years of the same.

REBear Thu Apr 2 13:27:53 2009 CDT #

Haha says:

Will BO ever in my lifetime say anything of substance?
-------------------------------------
He actually almost always says things which make sense. But as with most people it's what he eventually Does that's important. Am bitterly dissapointed with the economic team of Summers, Geithner and Bernanke.

Haha Thu Apr 2 13:28:30 2009 CDT #

Michael says:

BO's teleprompter team took 17 teleprompter machines to London for BO to use. Surely BO's handlers can keep at least one teleprompter within eyeshot of BO at all times can't they?

Michael Thu Apr 2 13:29:28 2009 CDT #

debtinator says:

I'm not sure crooks are primarily ideologues. They're more like sociopaths.

debtinator Thu Apr 2 13:29:34 2009 CDT #

Lawyerliz says:

???

Lawyerliz Thu Apr 2 13:30:06 2009 CDT #

Broward Horne says:

"did anyone notice Freddy & Fannie received another $46-billion a few days ago?"
========

No, too busy with trillion $$$ bailouts to pay attention to trivial amounts.

Broward Horne Thu Apr 2 13:32:21 2009 CDT #

Some Investor Guy says:

Can anyone here explain why going back from MTM to the prior accounting system is raising stock prices?

Some Investor Guy Thu Apr 2 13:32:28 2009 CDT #

CRbot says:

The Latest from Ritholz:

CDS/FASB

CRbot Thu Apr 2 13:32:58 2009 CDT #

nades says:

like a basketball player going up in the air to pass without an open teammate in mind

First rule in basketball. Never leave your feet!

Best analogy I've read in some time! :)

nades Thu Apr 2 13:33:04 2009 CDT #

Tim waiting for 2012 says:

Enjoying the standup BHO. I hope they have the TV on at the local "career development assitance" center/

Tim waiting for 2012 Thu Apr 2 13:33:19 2009 CDT #

Michael says:

I see the BO apologists are out in force today.

Michael Thu Apr 2 13:34:12 2009 CDT #

Anonymous says:

Hey, crouton, go swim on a bowl of vegetable soup. See if you can find the letters to spell "tool". Dumbest person on CR by a margin.

Parent Post

Anonymous Thu Apr 2 14:14:50 2009 CDT #

Broker says:

If F.D. Raines (ex Fannie CEO) had been in charge of the Treasury at that time, the subprime debacle would have been solved by now. Bad luck, I guess.

Broker Thu Apr 2 13:34:22 2009 CDT #

Morocco Bama says:

Did they take Obama's dresses to London, as well.

Morocco Bama Thu Apr 2 13:34:23 2009 CDT #

traderwalt says:

No, Michael, George Bush is a baffoon.

traderwalt Thu Apr 2 13:35:19 2009 CDT #

gr8f8 says:

Looks like you are right Michael

Parent Post

gr8f8 Thu Apr 2 14:23:07 2009 CDT #

Angry Saver says:

AC,

Good points. But I would argue that we have two economies. One is productive and creates goods and services. This economy is competitive and arguably is based on free market principles.

The other economy is the FIRE eCONomy. It is a sham. It is non-competive in the sense that it holds the goods producing economy hostage. As time goes on, the sham economy grows exponentially larger than the goods producing economy. Inflation and laws of exponential growth ensure this.

We are at the point where all is beholden to the FIRE eCONomy. The free part of our markets are no longer free.

Something has to give.

Angry Saver Thu Apr 2 13:35:22 2009 CDT #

1 currency now [yogi] says:

But they got preferred shares paying 10% dividend for that 46 billion.

Next month they convert to common, at twice the market price and no dividend. Worked with Citi...

1 currency now [yogi] Thu Apr 2 13:38:00 2009 CDT #

Jay D. says:

Did they take Obama's dresses to London, as well
............yeah , I guess so including his underware..........

Jay D. Thu Apr 2 13:38:16 2009 CDT #

Morocco Bama says:

............yeah , I guess so including his underware..........

_____________________________________________________

If not, I'm pretty sure they have Victoria's Secret in London.

Morocco Bama Thu Apr 2 13:40:39 2009 CDT #

Anonymous says:

What I see is raw self-serving animal behavior sometimes disguised behind ideological claims, but no genuine ideology or governing beliefs.
----------------------------------------------------
Well, there's this branch of "philosophical" (okay) "thought" (not really) see?
It goes by the name of hedonism, see?
It's all about me, see?
Neat basketball analogy can you do one with golf?

Anonymous Thu Apr 2 13:42:20 2009 CDT #

Morocco Bama says:

I guess Kelly Blue Book just got a whole lot simpler. Look up the value of any car and it will say "whatever the hell you like." This is fun.

Morocco Bama Thu Apr 2 13:43:37 2009 CDT #

Anonymous says:

..but that doesn't mean I have to lie down and give them whatever they want without negotiating.
-------------------------
You haven't negotiated with a banker!

Anonymous Thu Apr 2 13:44:15 2009 CDT #

ghostfacedinvestah says:

This is surely a joke:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aeozoA3z3Tz4&refer=home

Before they went under, the very same regulator was saying "an accounting change should not drive a capital change."

http://abcnews.go.com/Business/wireStory?id=5333028

What a complete and utter joke our economy is becoming. I am betting that there is no way we can keep sweeping this under the rug much longer. I sold completely out of the equity market day after Election Day, but I might just go short now.

ghostfacedinvestah Thu Apr 2 13:44:41 2009 CDT #

Anonymous says:

"Paulson was blinded by ideological concerns.

I got a bridge I'll sell you if you belive thaty crap.

Anonymous Thu Apr 2 13:45:20 2009 CDT #

Anonymous says:

conflict of interest
perslonal bias
disaffection
antiestablishment
Counsel, you sold out.

Anonymous Thu Apr 2 13:48:35 2009 CDT #

dan w says:

missing info...

paulson lied to congress. kashkari "outed" him when he testified that paulson had decided to stray from the TARP plans a couple of weeks before getting the funds. Paulson claims it was days before. CONTEMPT OF CONGRESS! Where's the indictmen???

dan w Thu Apr 2 13:50:54 2009 CDT #

REBear says:

G20 supports IMF plan to raise funds by selling 403 tons of gold

REBear Thu Apr 2 13:52:46 2009 CDT #

Michael says:

To China!

Parent Post

Michael Thu Apr 2 13:55:46 2009 CDT #

Broward Horne says:

"G20 supports IMF plan to raise funds by selling 403 tons of gold"
------------

There's very strong circumstanial proof that Comex is manipulated. Weakness has been revealed and sharks will pour in this month for their share of the corpse.

http://seekingalpha.com/article/129128-did-the-ecb-save-comex-from-gold-default

Broward Horne Thu Apr 2 13:56:15 2009 CDT #

Dead_Monkey_Bounce says:

Why does the IMF have all this gold in the first place? http://www.marketwatch.com/news/story/g20-supports-imf-plan-raise/story.aspx?guid={5ABAE8F2-060D-44BC-9905-EB79665AEACE}&dist=msr_1

Dead_Monkey_Bounce Thu Apr 2 13:57:17 2009 CDT #

Michael says:

We all know how the stock market is manipulated thanks to Cramer and Jon Stewart on the Daily Show.

Jim Cramer and Jon finally face off
http://www.thedailyshow.com/full-episodes/index.jhtml?episodeId=220533

Michael Thu Apr 2 13:57:21 2009 CDT #

EvilHenryPaulson says:

nades, saw your alphaville link. it was me mentioning the marginal employment small businesses in the context of ADP being blind to them

gold bugs, If central banks haven't started selling gold, they will soon. It's standard procedure... which I why I said to sit out the rally in gold until later, we'll see I guess

EvilHenryPaulson Thu Apr 2 14:02:09 2009 CDT #

bearly says:

Does BM stand for Bull Market or Bowel Movement ?

bearly Thu Apr 2 14:03:32 2009 CDT #

Comrade Kristina says:

Re JPM/C beating GS...It's really hard to pick a side here when I want both to go down in flames to the bowels of hell, with any luck they'll arrive with such force as to slay Cerberus as it vigilantly guards the gate. I tend to think they are working more in unis,on than anyone knows.

Comrade Kristina Thu Apr 2 14:05:21 2009 CDT #

Fair Economist says:

and knew he would be criticized when he changed course late last year in the face of a deteriorating economy and deepening banking crisis.

Did Paulson ever notice that almost everybody (apart from the banksters who were presumably hoping to defraud the original TARP) preferred the capital injection approach? Sure, it sucks for the government to buy overpriced preferred stock, but not as much as buying 5 cents on the dollar CDOs for near face price would have.

Fair Economist Thu Apr 2 14:06:54 2009 CDT #

Fair Economist says:

I watched Corzine years ago publicly state that FNM & FRE were NOT worrisomely large.

Corzine was correct. If Fannie, Freddie, and FHA had done all the loans, like they basically do now, the problems would be much milder.

Fair Economist Thu Apr 2 14:09:35 2009 CDT #

popeye says:

Does BM stand for Bull Market or Bowel Movement ?

Friday stands for employment numbers, and I'm not hanging out on the long side for those.
Thank you for today Mr. Market.

popeye Thu Apr 2 14:10:21 2009 CDT #

Dead_Monkey_Bounce says:

Greenburg gets his hate on: http://money.cnn.com/news/newsfeeds/articles/djf500/200904021414DOWJONESDJONLINE000976_FORTUNE5.htm

Dead_Monkey_Bounce Thu Apr 2 14:11:00 2009 CDT #

Bill Jones says:

The Russian oligarchs, aided and abbetted by the politicians they owned looted their country in the mid 90's. The Financial Oligarchs aided and abbetted by the politicians they owned are looting the economies of the West.

Bill Jones Thu Apr 2 14:11:17 2009 CDT #

Comrade Elmer Fudd says:

"We all know how the stock market is manipulated "

don't shatter my illusions

Comrade Elmer Fudd Thu Apr 2 14:12:21 2009 CDT #

Go Villanova says:

Paulson was clueless from day 1.

http://dailybail.com/home/financial-comedy-louis-ck-accentuates-the-positive-conan-obr.html

Louis CK the comedian on the economy. Very wise.

Go Villanova Thu Apr 2 14:13:46 2009 CDT #

1 currency now [yogi] says:

It made sense that the Government bought all that stock with the express intention not to get involved running the companies.

And never mind the preferred dividend, 'we'll convert it to common at twice the going rate'.

1 currency now [yogi] Thu Apr 2 14:14:51 2009 CDT #

Anonymous says:

>Hopefully the entire essay will be available online.

Greg Mankiw's blog has already got a link to it.

Anonymous Thu Apr 2 14:14:53 2009 CDT #

EvilHenryPaulson says:

You people like maps?

http://data.bls.gov/map/servlet/map.servlet.MapToolServlet?datatype=12_month_net&year=2009&period=M02&survey=la&map=state&seasonal=u

http://www.americanprogress.org/issues/2009/03/job_losses.html

EvilHenryPaulson Thu Apr 2 14:15:47 2009 CDT #

bcg says:

Unimployment Stats - by County - from March 3 NYT article (repost)

Parent Post

bcg Thu Apr 2 14:54:30 2009 CDT #

Guest says:

Paulson was never accused of being the sharpest tack in the box and no one at Goldman ever accused him of being a great "intellect".
From day 1 he was in over his head but too naive to recognize that fact. He also probably liked the aura that came with being Treasury Sec.
I know some people who worked with/for him - from what I've heard he's a decent person, just not someone you'd want running Treasury or probably anywhere close to it.

Guest Thu Apr 2 14:17:18 2009 CDT #

Jay D. says:

......After Bernanke finishing his terms , I am quite sure he will write a autobiography .......Paulson's role and intention will be cleared somewhat........

Jay D. Thu Apr 2 14:17:44 2009 CDT #

JS123 says:

And clueless Congress just signed a black check because they assumed Paulson--being a Wall Street genius and all--knew what he was doing. Blind leading the blind, or crooks leading the blind.

JS123 Thu Apr 2 14:18:18 2009 CDT #

bearly says:

BHO promising increased regulation ? Watch what the USA does, not what they say they'll do.

Imagine - If the market rallied this much on accounting rule changes just imagine what the market would do if FASB decided to remove rules altogether ! That is the next proposed move.

bearly Thu Apr 2 14:19:16 2009 CDT #

Go Villanova says:

Bird and Fortune on the financial crisis. From British TV presumably. Top notch humour.

http://dailybail.com/home/british-tv-silly-money-bird-and-fortune-satirizing-the-finan.html

But where are the wolves.

Go Villanova Thu Apr 2 14:19:40 2009 CDT #

Comrade Kristina says:

yogi, hmmm not a bad idea, pump it up, dump it and then short it back into the ground. Kind of a reverse triple lindy...Surely they wouldn't? Or would they? <img src="http://js-kit.com/extra/tiny_mce/plugins/emotions/img/smiley-surprised.gif" title="{#emotions_dlg.surprised}" border="0" alt="{#emotions_dlg.surprised}"/>

Comrade Kristina Thu Apr 2 14:20:18 2009 CDT #

ac says:

We are at the point where all is beholden to the FIRE eCONomy. The free part of our markets are no longer free.

That's the specific sickness we have right now.

Again, it's not something new:

The point of finance is to lubricate the real economy by substituting paper for real wealth. It's easier to work with paper (or digits in a computer) than with the real products of the economy.

The problem always emerges after a while when people get so used to the paper that they begin to believe that the paper is the wealth. Likewise the people in the financial industry begin to think that they are the ones creating the wealth and not just the ones creating documents that record ownership of wealth.

The more clever people in finance will use this growing illusion to substitute the paper they create for real wealth in order to take the products of real labor without doing the work.

The less clever people in finance just think they really are creating the wealth by creating fancy documents and think they deserve all the rewards of the economy.

This is the disease that is killing our country - the inability to distinguish paper from reality.

Inflationary policies promote this illusion of wealth and exacerbate the sickness.

Deficits and excessive expansion of the monetary supply do matter because they arbitrarily redistribute real wealth and they disconnect anybody using financial assets from the real economy.

Inflation makes a society economically blind.

We are seeing the consequences of that now.

ac Thu Apr 2 14:20:38 2009 CDT #

krid says:

Angry Saver... good post and interesting perspective.

krid Thu Apr 2 14:21:32 2009 CDT #

1 currency now [yogi] says:

Bberg
“One option is for the seller to retain an equity interest as a part of the consideration for the sale,” Jim Wigand, the FDIC’s deputy director for resolutions and receiverships, said in an interview.
...
Wigand said letting banks take an equity stake in the vehicles buying the loans wouldn’t violate conflict-of-interest policies designed to ensure banks don’t take unfair positions on both sides of a transaction."

Both sides of what transaction? Selling something to yourself is a sham.
Mr Wigand go back to 3 card monty.

1 currency now [yogi] Thu Apr 2 14:23:39 2009 CDT #

Jesse Liversore says:

Flashback to Swagel being mocked in WaPo last July:

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/03/AR2008070303317.html

Jesse Liversore Thu Apr 2 14:23:42 2009 CDT #

nova says:

A spin job. PR. BS. Rodent spit. What ever you want to call it. CYA

nova Thu Apr 2 14:24:28 2009 CDT #

traderwalt says:

OT, but, hey,
From gold eagle.com:
<li>Actual Central Bank gold sales may well be a buying signal for the Midas metal. The chart shows when Central Bank gold sales culminated, it was a BUY SIGNAL for gold, as it precisely marked the market bottom. Let us view just three of the last gold market rallies: 1968 to 1975, 1979 to 1980 and 1993. (Gold cash price source: Handy & Harmon - London)

</li>

Central Bank gold selling peaked at the beginning of 1968, whence gold rose from about $40 to $180 - having soared approximately 350%
Central Bank gold selling peaked at the beginning of 1979, whence gold rose from about $210 to $675 - having soared approximately 221%
Central Bank gold selling peaked at the beginning of 1993, whence gold rose from about $325 to $405 - having risen approximately 25%

traderwalt Thu Apr 2 14:25:49 2009 CDT #

1 currency now [yogi] says:

Kristina I only wish they really wanted to get the taxpayer's money back, but it just ain't so.

1 currency now [yogi] Thu Apr 2 14:28:23 2009 CDT #

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CRbot Thu Apr 2 14:29:29 2009 CDT #

grumpyoldvet says:

ac @ 1:38

Interesting new book by Kim Phillips-Fein entitled "Invisible Hands". Mainly about the conservative movement but interesting the involvement of Big Business in the whole matter. Ms Phillips-Fein is an Associate Professor of twentieth century American History at New York University Gallatin School.

Interesting about the idealogical wars of the period from 1950 onward. 8-)

grumpyoldvet Thu Apr 2 14:30:02 2009 CDT #

TCA says:

http://www.americanprogress.org/issues/2009/03/job_losses.html

Way cool. Play the timeline on the unemployment rate tab and you can see when Katrina hit the Gulf Coast by watching LA and MS spike.

TCA Thu Apr 2 14:30:04 2009 CDT #

Anonymous says:

Michael,

Just go back and listen to Fox "news"...I'm sure you'll feel better.

Anonymous Thu Apr 2 14:30:44 2009 CDT #

Anonymous says:

SSO +1 at open on less than a mil. shares. Near 100 mil. shares exchanged during the entire day for anothe 0.5 gain... somebody is selling

Anonymous Thu Apr 2 14:31:05 2009 CDT #

Anonymous says:

J.D.

You didn't spell "underwear" correctly...but, then it is a hard word.

Anonymous Thu Apr 2 14:35:37 2009 CDT #

Anonymous says:

one of my first classes at the GSB (now Booth) was with Swagel. (the only teacher there i didn't enjoy by the way -- teaching was not his calling)

econ class. he was on the White House Economic Council at the time I do believe.

his mindset was definitely that the US Treasury is risk free (the model says so!) and we can always print/borrow more money. this has always bugged me so i couldn't help but question him on this.

questioning that logic almost confused him. i tried to bring the topic up once in class...in the fall of '05...looking at all these ominous long term charts of debt levels, etc.

wasn't there a limit i asked? how does it end?

to no avail. the answer was a stumbling something about lowering interest rates and printing more money. a true bernanke disciple. minor corrections were about the only thing that seemed possible to him.

i accepted it, took my B and moved on.

Parent Post

Anonymous Thu Apr 2 15:13:55 2009 CDT #

Anonymous says:

i dont understand how paulson could ve supposedly known so little when his goldman buddies were so well hedged against the crisis. shouldnt the govt be even more risk averse than goldman?

Anonymous Thu Apr 2 14:55:33 2009 CDT #

Teddy says:

My daughter was at a charity event a few weeks ago and by coincidence was seated next to Corzine who tried to make conversation. She looked him in the eye with disdain and said absolutely nothing to anything he had to say. As far as Greenspan and Rand, too bad they didn't practice what they preached.

Teddy Thu Apr 2 15:39:01 2009 CDT #

locust says:

wtf is with the Obama + teleprompter crap? Here's a photo of the so-called great orator Ronald Reagan using a teleprompter.
http://www.historicaldocuments.com/RonaldReagan_Parliament.gif
Presidents have been using this technology for decades.

locust Thu Apr 2 15:46:13 2009 CDT #

briwerk says:

test ban dailybail

briwerk Thu Apr 2 18:26:25 2009 CDT #