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Fall on your sword - damn it!



October 03, 2008 – Comments (9)

Big picture has a post about back room meetings happening back in April, 2004.  Do you think these guys told you any lies since then? 

Barry says it so nicely....

No wonder the bailout package is so poorly crafted: The same genius, Hank Paulson, that helped us to get into this, and has utterly failed to see this coming until it was all but on top of is, is trying to get us out. He is uniquely  unqualified for this task. How this guy hasn't honorably fallen on his own sword yet is beyond me.



9 Comments – Post Your Own

#1) On October 03, 2008 at 10:23 AM, biotechmgr (< 20) wrote:

Because there is no honor among thieves. And the days of chivalry are long gone. Paulson will do all he can for his Wall Street buddies, then land a nice job back there or in some private equity firm.

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#2) On October 03, 2008 at 10:49 AM, hansthered0 (< 20) wrote:

There may have never been "those days." I think we are just now in the age of information so it has become apparent what's going on.

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#3) On October 03, 2008 at 10:51 AM, devoish (78.10) wrote:

The third page of this NY times article has a link to the audio recording of that decision making process.


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#4) On October 03, 2008 at 10:53 AM, kdakota630 (29.15) wrote:

Yes, very well said.

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#5) On October 03, 2008 at 11:04 AM, lquadland10 (< 20) wrote:

From your lips to God's ears.

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#6) On October 03, 2008 at 11:24 AM, Niteski (< 20) wrote:

He, Paulson, hasn't fallen on his sword because his former employer, where he was CEO, didn't participate much in the buying and selling of subprime loans.  This is evident by the very low losses.  One thing we must remember, is that if you push banks, not investment banks, but the kind you see on the city street corners, to make loans to less qualified borrowers you will get more losses in down markets.  If you allow less qualified individuals to buy houses, sometimes many houses, you will get those that abuse that ability.  But none of this can occur unless those in the holy House and Senate  Finance Committee, allow it to happen.  They were bought and sold by Freddie and Fannie, for the benefit of Freddie and Fannie and they sit there today telling us all that they were NOT the ones responsible.  Every attempt to stiffen regulations and bring them up to date with the changes pushed through by Carter and Clinton, was not only rebuffed, but squashed like a small bug underfoot.

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#7) On October 03, 2008 at 2:14 PM, Gemini846 (34.60) wrote:

If they had let every investment bank fail back when bear sterns collapsed we could have gotten back to business as usual. The amount of loans small banks were exposed to would have become evident. This worthless paper could have been marked to market and Credit Default Swaps?? What are those would have been the norm. The SEC could have stepped in and regulated any other products that look like insurance as insurance and there would be no credit crunch.

Regulated Banks with real money (IE Deposits) seem to be doing ok. Wells has $$, Chase has $$, Citi (somehow) has $$. BAC has $$. I really don't see a problem.

Small businesses get loans from comercial banks anyway, so this whole Joe can't buy a copier for his printing business is hogwash anyway. You don't see mom and pop stores writing out commercial paper slips and issuing bonds. They go to the bank where their deposit account is and ask for a loan just like John Q public.

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#8) On October 03, 2008 at 5:12 PM, jester112358 (28.22) wrote:

Actually, the fractional reserves available to depositors aren't much different at the "good" banks than the "bad" ones that failed-they are around 8% of deposits in each case.  The difference is only psychological.  If only 10% of Wells, Chase, Citi etc. customers demanded their full desposits back to buy gold, food, or T bills all these banks would be insolvent too.  If depositors hadn't started a run on WM or WB they wouldn't have been declared insolvent.  There are runs on the Money Market funds and thats why there is a short term commercial paper crisis.  In fairness most of the companies using this short term lending are more likely to pay it back than the government-at least they provide goods and services!  The ability of the government to pay it back depends on taxes from these companies and the individuals they employ.  So, congress really put the cart before the horse in giving money to the government when they should have provided either tax cuts or credits to business to support the tax base.  The bail out bill won't likely change this lack of confidence.  Fractional banking without solid finite assets like gold to back it is a confidence game.

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#9) On October 03, 2008 at 9:51 PM, Tastylunch (28.72) wrote:

what akes you think a man so unqualified would be able recognize that he is such? I think he's unqualified to recognize his own lack of qualifications...

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