Ron Paul Grills Paulson & "Helicopter" Ben 10 July 08. Hank Paulson is a Blatant Liar.
Ron Paul at Financial Services Hearing 7/10/08 Mish Shedlock calls Hank Paulson a Blatant Liar: Operation "Rescue Fannie" Underway - Paulson a Blatant Liar SUMMARY:
To What Extent Did Paulson Lie?
Now we get to debate the meaning of the following
"Keeping Fannie and Freddie in Current Form"
"There will be no nationalization of Fannie and Freddie"
"A government takeover will not be necessary"
It seems to me that and injection of $15 billion capital into Fannie Mae and Freddie Mac and creating a new class of Government Owned Securities is most emphatically NOT in agreement with the above ideas.
Paulson Is The Great Pretender Hell there is so much pretending going on it's hard to keep track. For starters everyone is pretending Fannie and Freddie are solvent. If they were solvent there would be no need for a $15 billion injection. Secondly, the government directly owning a new class of shares is not keeping Fannie in its current form. The big concern is "Where does it stop?" Opening up a $15 billion dollar window will be the first of 10 such operations. This is likely the start of a U.S. Taxpayer Bailout of China. Disgustingly it is a U.S. Taxpayer bailout of PIMCO as well. Flashback May 23, 2008. Bill Gross Triples Bet On Mortgages The Financial Times reported Pimco's Bill Gross triples bet on mortgages. Bill Gross, whose Pimco Total Return fund (PTTRX) is the world's largest bond mutual fund, has tripled his bet on mortgage debt, which now comprises about 61 percent of the fund's assets, the Financial Times said on Friday. The chief investment officer of Pacific Investment Management Co said his decision to raise exposure in recent months stemmed from the U.S. government's implicit guarantee of debt issued by Fannie Mae (FNM) and Freddie Mac (FRE), the government-sponsored mortgage financiers. "Government policy is moving to sanctify the status of the government-sponsored agencies," Gross said, according to the newspaper. "It became a question of which institutions would be sheltered by the government umbrella.""Operation Rescue Fannie" has now morphed into a taxpayer bailout of Bill Gross, China, and anyone else that levered into buying Fannie Mae garbage. It is a moral hazard to the highest degree, for bondholders to be made whole in this mess. Paulson Is A Blatant Liar It's now time to point blank call Paulson what he is: A blatant liar. Flashback July 10th 2008 Paulson: Financial Institutions Must Be Allowed To Fail. For market discipline to be effective, market participants must not expect that lending from the Fed, or any other government support, is readily available," Paulson said. "For market discipline to effectively constrain risk, financial institutions must be allowed to fail."Even though I called for it, this is extremely disgusting to see. I am hoping that bondholders participate at least partially over this, but I'm not holding my breath. Addendum Several people asked about the "inflationary" aspects of such a bailout. My reply is these bailouts cannot be looked at in isolation. The ongoing destruction of credit will dwarf this proposed bailout. The destruction of credit via defaults and writeoffs dwarfs the stimulus package and will dwarf the next one as well. I have repeatedly said there would be government attempts to contain deflation, just as there were in Japan. Those attempts will do nothing but prolong the agony." Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com" FYI - Videos for the Fool Community $4 GAS & ENERGY & IRAN WAR EXPLAINED BY RON PAUL to CONGRESS July 09, 2008 Ron Paul Lectures Bernanke: U.S. Moving Towards Fascism April 02, 2008 Ron Paul challenges the "Federal" Reserve 2/17/2007 Ron Paul to Bernanke - Moral hazard of currency devaluation September 20, 2007 Ron Paul Grills Ben Bernanke on Rate Cuts Driving Inflation November 08, 2007 Ron Paul is Insane Jim Rogers on CNBC: ABOLISH THE FEDERAL RESERVE and Bernanke Jim Rogers: The Dollar is Doomed and the Fed's Days are Numbered 20 May 08 Useful Idiots Marcy Kaptur Gets Real Confused (Humor)